. /.WORLD TRADE
ORGANIZATIONG/TMB/N/60/Add.5/Suppl.2
18 July 2002
(02-3984)
Textiles Monitoring Body Original:  English
AGREEMENT ON TEXTILES AND CLOTHING
Notification under Article 2.1
EUROPEAN COMMUNITY
Supplement
The Textiles Monitoring Body has received a second supplement to the notification made by
the European Community pursuant to Article 2.1.
The TMB, in accordance with Article 2.2, is circulating this notification to WTO Members
for their information.G/TMB/N/60/ Add.5/Suppl.2
Page 2
European Commission
Permanent Delegation
to the International Organizations in Geneva
Head of Delegation
Geneva, 16 July 2002
Subject:  China – TMB
Dear Mr. Szepesi,
This is to clarify questions raised in your letter no. 703130 dated 19 April by which you have
forwarded some specific observations concerning  notably growth rates applied by the European
Community to exports from the People's Republic of China.
Firstly let me point out that quotas which on an ad hoc  basis are granted annually to China for
participation in European fairs are to be considered as additional export facilities above the level of
the already available quotas.  They are consequently equivalent to additional facilities of exports
above the level of the underlying restrictions alread y agreed and to which the agreed growth rate and
pertinent provisions of Article 14 a) and b) do apply.  No growth rate is foreseen for the additionalannual amount or quantity for participation in fairs.  This is also logical, since the additional amounts
for fairs are granted for specific annual events and it would be a contradiction in terms, under these
circumstances, to talk about annual growth.
Concerning the second question on growth-o n-growth I can only point out that the
Community's application of the provisions of paragraph 241 of the report of the Working Party on
China's accession implies that China is benefitting from the full 25 per cent increase inherent in the
second stage of integration in spite of the fact that China became a Member of the WTO only at the
very end of that period.  This was of course followed by the 27 per cent applicable for the third stage.
The Community is therefore well within the boundaries of application of the pertinent criteria "as
appropriate" stipulated in this paragraph.  Needless to point out that these provisions may be
interpreted more or less generously to the exporting country.
Sincerely yours,
(Signed)
Carlo Trojan
Ambassador
Mr. András Szepesi
Chairman
Textiles Monitoring Body
World Trade Organization
Centre William Rappard
Rue de Lausanne 1541211 Geneva 21
_____________