WORLD TRADE G/TMB/N/273
22July1997
ORGANIZATION(97-3022)
Original: English Textiles Monitoring Body
AGREEMENT ONTEXTILES AND CLOTHING
Notification under Article 2.17
UNITED STATES
Administrative Arrangements withHungary
TheTextiles Monitoring Body hasreceived anotification fromtheUnited States pursuant to
paragraph 17ofArticle 2.TheTMB iscirculating thisnotification toWTO Members fortheir
information.G/TMB/N/273
Page2
Executive Office ofthePresident
Office oftheUnited States Trade Representative
28February 1997
TheHonourable Ambassador András Szepesi
Chairman
Textiles Monitoring Body
World Trade Organization
RuedeLausanne
1211 Geneva
Dear Ambassador Szepesi,
Attached youwillfindmyGovernment 'snotification ofAdministrative Arrangements for
Brazil, Colombia, Costa Rica, Fiji,Haiti, Hungary1,India, Indonesia, Korea, Macau, Malaysia,
Philippines, Qatar, Romania, SriLanka, Thailand, UAE andUruguay made pursuant toArticle 2.17
oftheAgreement onTextiles andClothing.
Sincerely,
(signed) Ambassador RitaHayes
Chief Textile Negotiator
1This document contains theAdministrative Arrangements concluded with Hungary. Administrative
Arrangements concluded withtheother Members listed above willbecirculated asseparate documents.
Note: Annex Breferred tointhetextcontains thelistofrestrictions notified bytheUnited States pursuant to
Article 2.1andassuch itisnotpartoftheAdministrative Arrangements.G/TMB/N/273
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HUNGARY
Thefollowing provisions aredrawn from theUnited States -Hungary bilateral textile and
apparel agreement of7April and28July1994 andhavebeenagreed tobenecessary fortheproper
implementation ofrestrictions notified totheTextiles Monitoring Body under Article 2.1ofthe
Agreement onTextiles andClothing.
Coverage
2. Textiles andtextile products covered bythisAgreement andtherates ofconversion into
square meters equivalent arethose listed inAnnex A.Tops, yarns, piece goods, made-up articles,
garments andother textile manufactured products (being products which derive their chief
characteristics fromtheirtextile components) ofcotton, wool, man-made fibres, orblend thereof, in
which anyorallofthose fibres incombination represent thechiefweight oftheproduct, aresubject
tothisAgreement. Components ofanarticle which arenotconsidered relevant totheclassification
under thegeneral rules ofinterpretation ofthelegalnotes tosection XIoftheHarmonized System,
arelikewise tobedisregarded here. Thedetermination ofwhether atextile product isofwool, cotton
orman-made fibreshallbemade inaccordance withtheterms ofparagraph 6.
Flexibility Adjustments (Swing)
4.(A) During anyagreement year, aspecific limitsetoutinAnnex Bmaybeexceeded bynotmore
thanseven (7)percentofitssquare meters equivalent limitascalculated onthebasis ofthe
conversion factor setoutinAnnex A,provided thattheamount oftheincrease is
compensated forbyanequivalent decrease inanother specific limit. When requesting useof
theprovisions ofthisparagraph, theGovernment oftheRepublic ofHungary willindicate
thecategory tobedecreased bythecommensurate quantity.
(B) Inaddition, special shiftofupto5percentshallbeavailable tocategory 443provided that
twice thatamount insquare meters equivalent isdeducted from either category 433or
category 434. When requesting thespecial shift, theGovernment oftheRepublic ofHungary
willspecify thecategory from which thespecial shiftforthatagreement yearwillbetaken.
(Carryover andCarry Forward)
5.(A) Inanyagreement year, inaddition toanyadjustment pursuant toparagraph 4,exports may
exceed byamaximum of11percentanylimitsetoutinAnnex Bbyallocating tosuchlimit
forthatagreement yearanunused portion ofthecorresponding limit fortheprevious
agreement year("carryover") oraportion ofthecorresponding limit forthesucceeding
agreement year("carry forward") subject tothefollowing conditions:
(I) Carryover maybeutilized asavailable (subject toparagraph 5(B)) upto11percent
ofthereceiving agreement year'sapplicable limit. Nocarryover shallbeavailable
forapplication during thefirstagreement year. Carryover shallbeavailable forthe
1992 and1993 agreement years.
(II) Carry forward maybeutilized uptosixpercentofthereceiving agreement year's
applicable limit. Carry forward used shall becharged against theimmediately
following agreement year'scorresponding limit. Nocarry forward shallbeavailable
forapplication during thefinalagreement year. Carry forward shallbeavailable for
the1992 agreement year.G/TMB/N/273
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(III) Thecombination ofcarryover andcarry forward shallnotexceed eleven percentof
thereceiving agreement year'sapplicable limitinanyagreement year.
(B) Forpurposes oftheAgreement, ashortfall occurs when exports oftextiles ortextile products
from Hungary totheUnited States ofAmerica during anagreement yeararebelow any
applicable specific limitassetoutinAnnex B.Intheagreement yearfollowing theshortfall,
suchexports from Hungary totheUnited States ofAmerica maybepermitted toexceed the
applicable limits, subject toconditions ofsubparagraph 5(A), bycarryover ofshortfall inthe
following manner.
(I) Thecarryover shallnotexceed theamount ofshortfall inanyapplicable limits; and
(II) Theshortfall shallbeusedinthecategory inwhich theshortfall occurred.
Classification
6. Forthepurposes ofthisAgreement, textile products covered bythisparagraph shall be
classified as:
(I) Cotton textiles iftheproduct isinchief weight ofcotton, orifcotton withwool
and/or man-made fibres intheaggregate equals orexceeds 50percentbyweight of
thecomponent fibres thereof andthecotton component equals orexceeds theweight
ofeachofthetotalwool and/or man-made fibrecomponents, unless:
(a) theproduct isawoven fabric inwhich wool equals orexceeds 36percent
byweight ofallfibres, inwhich casetheproduct willbeawool textile.
(II) Wool textiles, iftheproduct isinchief weight ofwool, or,inthecaseorproducts
which arechief weight ofsilkornon-cotton vegetable fibres, wool exceeds
17percentbyweight ofallfibres.
(III) Man-made fibretextiles, iftheproduct isinchief weight ofman-made fibres, orif
theman-made fibres incombination withcotton and/or wool intheaggregate equal
orexceed 50percentbyweight ofthecomponent fibres thereof andtheman-made
fibre component exceeds theweight ofthetotalwool and/or cotton component,
unless:
(a) theproduct isknitted orcrocheted apparel inwhich wool equals orexceeds
23percentbyweight ofallfibres, inwhich casetheproduct willbeawool
textile;
(b) theproduct isapparel, notknitted orcrocheted, inwhich wool equals or
exceeds 36percentbyweight ofallfibres, inwhich casetheproduct willbe
awool textile;
(c) theproduct iswoven fabric inwhich wool equals orexceeds 36percentby
weight ofallfibres, inwhich casetheproduct willbeawool textile.
Coverage under thisparagraph isintended tobeidentical withtheterms ofArticle 12ofthe
Arrangement Regarding International Trade inTextiles andinconformance withparagraph 24ofthe
31July1987 protocol ofextension.G/TMB/N/273
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Intheevent ofaquestion regarding whether aproduct iscovered bythisAgreement byvirtue
ofbeing inchief weight ofcotton, wool, orman-made fibre, thechief value ofthefibres maybe
considered.
USAssistance inImplementation oftheLimitation Provisions
7.(A) TheGovernment oftheUnited States ofAmerica mayassist theGovernment oftheRepublic
ofHungary inimplementing thelimitation provisions oftheAgreement bycontrolling its
imports ofthetextile products covered bytheAgreement.
(B) Exports fromHungary inexcess ofauthorized limits inanyagreement period maybedenied
entry intotheUnited States. Anysuchshipments denied entry maybepermitted entry into
theUnited States andcharged totheapplicable limitinthesucceeding agreement period.
(C) Exports from Hungary inexcess ofauthorized limits inanyagreement yearwill,ifallowed
entry intotheUnited States during thatagreement period, becharged totheapplicable limit
inthesucceeding agreement period.
Exchange ofdata
8. TheGovernment oftheUnited States ofAmerica shallpromptly supply theGovernment of
theRepublic ofHungary withmonthly dataonimports oftextile products subject tothisAgreement,
andtheGovernment oftheRepublic ofHungary shall promptly supply theGovernment ofthe
United States ofAmerica withquarterly dataonexports ofsuchproducts totheUnited States. Each
Government agrees tosupply promptly anyother pertinent andreadily available statistical data
requested bytheother Government.
Consultation onImplementation Questions
9. TheGovernment oftheUnited States ofAmerica andtheGovernment oftheRepublic of
Hungary agree toconsult onanyquestion arising intheimplementation ofthisAgreement.
Mutually Satisfactory Administrative Arrangements
10. Mutually satisfactory administrative arrangements oradjustments maybemade toresolve
minor problems arising intheimplementation ofthisAgreement, including differences inprocedure
oroperation.
Cooperation inthePrevention ofCircumvention
13.(A) TheGovernment oftheUnited States andtheGovernment ofHungary agree totakemeasures
necessary toaddress, toinvestigate and,where appropriate, totakelegaland/or administrative
action toprevent circumvention ofthisAgreement bytransshipment, rerouting, false
declaration concerning country oforigin, falsification ofofficial documents oranyother
means.
(B) Bothparties agree tocooperate fully, consistent withtheirdomestic lawsandprocedures, in
instances ofcircumvention oralleged circumvention oftheAgreement toaddress problems
arising fromcircumvention andtoestablish therelevant factsintheplaces ofimport, export
and, where applicable, transshipment. Such cooperation, totheextent consistent with
domestic lawsandprocedures, willinclude investigation ofcircumvention practices; exchange
ofdocuments, correspondence, reports andother relevant information totheextent available;G/TMB/N/273
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andfacilitation ofimpromptu, jointplantvisits withtheconsent oftheplantmanagement and
contacts byrepresentatives ofeither party, uponwritten request totheappropriate government
officials andonacase-by-case basis.
(C) Ifeither party believes thatthisAgreement isbeing circumvented, itmay request
consultations toaddress thematter ormatters concerned withaviewtoseeking amutually
satisfactory solution. Tofacilitate effective andfairimplementation oftheAgreement, each
party agrees toholdsuchconsultations promptly, beginning within 30daysofarequest by
aparty andconcluding within 90days, unless extended bymutual agreement. Atthetime
oftherequest, theparty requesting consultations shallprovide theother party information
regarding thealleged circumvention thatarethesubject oftheproposed consultations.
During theconsultations, theparties agree tocooperate fullyinterms oftheelements setout
inparagraph (B)above, including where possible andinaccordance withdomestic lawsand
procedures, theprovision ofdocuments andother materials.
(D) Should theparties beunable toreach asatisfactory solution inthecourse oftheconsultations
called forunder paragraph (C),thentheGovernments ofHungary andtheUnited States agree
thatincases where clear evidence regarding circumvention hasbeen provided, the
United States maydeduct from thequantitative limits forthatagreement yearamounts
equivalent totheamount oftransshipped products ofHungarian origin unless paragraph (E)
applies. Theamounts transshipped shallbetheamounts andthecountry oforigin shallbe
thecountry oforigin sodetermined byUSCustoms. Inaddition, theGovernments of
Hungary andtheUnited States agree thatdeductions from thequantitative limits established
under thisAgreement maybemade inthose instances inwhich: a)theUSpossesses
information showing asubstantial likelihood thatcircumvention hasoccurred; b)theUShas
requested from Hungary cooperation orinformation relevant tothepossible circumvention
thatisofatypethatisavailable toorcould reasonably beobtained bytheGovernment of
Hungary, andc)theGovernment ofHungary hasnotprovided information orcooperation
within theperiod forconsultation outlined inparagraph (C). Anysuch action shall be
notified totheTSBwithfulljustification.
(E) Should theUnited States choose toexercise itsrights under paragraph (D)todeduct an
amount oramounts from thequantitative limits ofacountry where more thantwomajor
instances ofcircumvention have been demonstrated within thecurrent orimmediately
preceding agreement year, thentheUnited States maydeduct from thequantitative limit
amounts uptothree times theamounts transshipped, provided thatsuch deductions are
distributed equally ineachofthethree following years andnotified totheTSBwithfull
justification. Such charges shall only beapplied after consultations andwhere noor
inadequate measures arebeing taken toaddress ortotakeaction against suchcircumvention
bytheGovernment ofHungary.
(F) Where there isclear evidence showing thatgoods originating inanother country havebeen
shipped through Hungary totheUnited States identified asproducts ofHungary, the
Governments ofHungary andtheUnited States agree totakeappropriate action. Anysuch
actions, together withtheirtiming andscope, maybetaken afterconsultation heldwitha
viewofarriving atamutually satisfactory solution andshallbenotified totheTSBwithfull
justification. Such satisfactory solution mayinclude appropriate actions bytheGovernment
ofHungary resulting inthesignificant reduction orelimination ofthecircumvention. To
facilitate theeffective andfairimplementation oftheAgreement, suchconsultations should
beheldpromptly, beginning within 30daysofarequest byaparty andconcluding within 90
days, unless extended bymutual agreement. Appropriate action mayinclude theintroduction
ofrestraints intherelevant category orcategories ordeducting theamount ofgoods soG/TMB/N/273
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shipped from thequantitative limits established forthecurrent agreement yearunder this
Agreement forshipments originating inHungary. Should theparties beunable toreach a
satisfactory solution, thentheGovernment ofHungary andtheUnited States agree thatin
cases where clearinformation regarding circumvention hasbeenprovided, theUnited States
maytakesuchactions setoutabove.
(G) Parties agree thatfalse declaration concerning fibre content, quantities, description or
classifications ofmerchandise alsofrustrates theobjective ofthisAgreement. Where there is
clearevidence thatanysuchfalsedeclaration hasbeenmade forpurposes ofcircumvention,
bothparties agree totakeappropriate measures, consistent withtheir domestic lawsand
procedures, against exporters orimporters involved. Should either party believe thatthis
Agreement isbeing circumvented bysuch false declaration andthatno,orinadequate,
administrative measures arebeing applied toaddress and/or totakeaction against such
circumvention, thatparty should consult promptly withtheparty involved withaview to
seeking amutually satisfactory solution. Such consultations should beheld promptly,
beginning within 30daysofarequest byaparty, andconcluding within 90days, unless
extended bymutual agreement. Should theparties beunable toreach asatisfactory solution,
thentheGovernment ofHungary andtheUnited States agree thatincases where clear
evidence regarding suchfalsedeclarations hasbeen provided, thentheUnited States may
deduct from thequantitative limits established forthecurrent agreement yearanamount
equivalent totheamount ofproduct subject tothefalse declaration orclassification. This
provision isnotintended toprevent parties from making technical adjustments when
inadvertent errors indeclarations havebeenmade.G/TMB/N/273
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ANNEX A
Conversion
Factor to
Square Meter Unitof
Category Description Equivalent Measure
-------- ----------- ---------- -------
410 Woven fabrics
containing 36percent
ormore byweight wool 1.0 M2
433 M&B suit-type coats,
wool 30.1 DOZ
434 Other M&B wool coats 45.1 DOZ
435 W&G wool coats 45.1 DOZ
443 M&B wool suits 3.76 NOS
444 W&G wool suits 3.76 NOS
448 M&B wool trousers,
slacks andshorts 15.0 DOZ
604 Yarn containing 85
percentormore by
weight synthetic
staple fibre 7.6 KG