WORLD TRADE
ORGANIZATIONG/C/W/405
26 July 2002
02-4139)
Council for Trade in Goods Original:  English
DOHA MINISTERIAL DECISION ON IMPLEMENTATION-RELATED ISSUES
AND CONCERNS:  CTG EXAMINATION OF PROPOSALS CONTAINED
IN PARAGRAPHS 4.4 AND 4.5 RELATING TO THE
AGREEMENT ON TEXTILES AND CLOTHING
Communication from Pakistan
The text of the statement made by the representative of Pakistan at the meeting of the Council
for Trade in Goods on 23 July 2002 is being circulated to Members, as requested.G/C/W/405
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Council for Trade in Goods, 23 July 2002
Agenda Item 4:  Paras 4.4 and 4.5 of the Doha Implementation Decisions
Statement made by Pakistan
1. We would like to recall the detailed statement made by the United States on 13 June 2002 on
the proposals relating to the Agreement on Textiles and Clothing referred to this Council by the Doha
Ministerial Conference.  We were pleased to note that for the first time the United States made a
detailed presentation of its views on these implementation proposals.
2. Without going into all details, Mr. Chairman, I would like to touch upon a few key elements
in the US statement.  The United States made the following main observations:
• The two proposals required an explicit change in the ATC and that the Agreements should not be
re-opened through these proposals in final years of the implementation period.
• The ATC allowed imports to grow rapidly and therefore the implementation of the ATC was on
track and working well.
• The adoption of the two proposals would upset the carefully negotiated balance of the Agreement.
3. Mr. Chairman, in the CTG meeting held on 13 June 2002, the US representative stated that
"both proposals would require doing something that is not mandated by the ATC as now written, and
therefore would require an explicit change in the agreement."
4. Although the US representative made this assertion during the statement as read out in the
meeting of 13 June 2002, it does not appear in th e document circulated subsequently (G/C/W/387).
Nevertheless, paragraph 25 does contain the US view  that the ATC "should not be re-opened by the
tiret proposals in its final years".  The statement by the US delegation does not provide any reason orjustification as to why the two proposals involve re-opening of the ATC.  No specific points have
been put forward to support this contention.
5. The ITCB Members through their submission contained in G/C/W/368 have repeatedly
pointed out that the proposals fall within the existing provisions of the ATC and their adoption wouldnot require any modification in the Agreement or domestic legislation of the restraining Members.
We would like to submit the following points for consideration of the Council:
6. It is clear from a plain reading of the proposal under Tiret 4.4 that "in case of small suppliers",
the restraining Members are only required to apply the most favourable methodology available under
the growth on growth provisions and extend the same treatment to least developed countries.
7. What we are saying, here Mr. Chairman, is that the two restraining Members, the
United States and Canada apply the same methodology as done by the EU while implementing the
ATC provisions.  Mr. Chairman, we are sure that the EU would not have applied such a methodology
if it was not permitted under the ATC or would have involved a re-opening of the Agreement.
Furthermore, if such methodology was inconsistent with or not allowed by the provisions of the ATC,the TMB would definitely have pronounced itself on it.
8. Secondly, the ATC provided for minimum thresholds for increase in quota levels from the
beginning of the three integration phases.  It did not prescribe any limits or ceilings or prohibit any
increases above the minimum thresholds.  If any restraining Member enacted its legislation as thoughthe percentage increases were the maximum permissi ble, that Member would be in violation of itsG/C/W/405
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obligation under Article XVI, paragraph 4, of the WTO Agreement which provides that "each
Member shall ensure  the conformity of its laws, regulations and administrative procedures, with its
obligations as provided in the annexed Agreements."
9. The two proposals under consideration are in effect designed to provide increases in quota
access.  This is a matter of record that all thr ee restraining Members did provide increases in quota
levels during the course of the ATC without any change in the Agreement:
• With effect from 1 January 1998, Canada provided quota increases for a restrained category.
Their notification to the TMB contained in document G/TMB/N/316 of 16 January 1998 refers.
• The United States also provided quota increases for a restrained Member on two occasions, the
US Federal Register Notices of 6 September 1993 and 21 May 1998 contained information on
these increases.
• Similarly, the European Union has also provided increases in quota access for certain Members.
10. It is, therefore, apparent that no changes were required to be made in the Agreement on
Textiles and Clothing, nor did it involve any re-opening of the Agreement to enable these Members to
implement these increases.  As such, Mr. Chairman, no change in fact is required to the ATC to adoptthese proposals.
11. Finally, Mr. Chairman, EC accepts that the proposals do not imply amendment to the ATC.
In this connection it would be recalled that in the CTG meeting of 2 May 2002, the EC representative
had stated that "he accepted that the advanced impl ementation of the growth on growth provisions did
not imply the amendment of the ATC" (paragraph 1.18 of the minutes of the CTG meeting, document
G/C/M/60 can be seen).
12. On the issue of rapid growth of imports in  the restraining markets, Mr. Chairman, this
delegation would like to confine itself to stating that the purported increases in imports is neitherrelevant to assessing the fulfilment of obligations under the Agreement, nor can they provide a
justification for violating any of those obligations.  In the CTG meeting of 26 October  2001, devoted
to the second major review of the ATC implementation, the US representative has stated "it was clear
that imports had increased in the US market, this would never be a pretext for failing to fulfil legal
obligations" (paragraph 5 of the minutes of the CTG meeting G/C/M/56).
13. Secondly, it is also a fact that no commercially meaningful products have so far been
integrated.  It is, therefore, obvious that increases in imports cannot have been the result of ATC
implementation.
14. It is also a fact that growth of imports into the US market from restrained suppliers have been
suppressed at 6.8% per year as compared to 16.6% for unrestrained suppliers.
15. I would very briefly touch upon the US statem ent that "adoption of the two proposals would
subvert the carefully negotiated balance of the Agreement."
16. As explained by the ITCB in the submission contained in document G/C/W/368, contrary to
the claim that the "acceptance of these proposals would subvert the balance of the Agreement", the
adoption of the proposals would in fact go some way in rectifying the imbalance created by the
restraining Members which unfortunately the statement fails to mention.  It is a fact Mr. Chairman
that:
• Despite the passage of seven years, we have seen very few quotas being removed or phased out.G/C/W/405
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• The United States invoked a number of safeguard actions for new restrictions which impacted
more than $1 billion of exports from affected exporting Members.  Virtually, all of these actions
were subsequently found to be violative of US obligations under the ATC, either by the TMB or
by the dispute panels and the Appellate Body.
• Another restraining Member initiated and/or imposed anti-dumping measures on products which
were already restrained by quotas.
• This action was also subsequently found to be unjustified by a Dispute Panel and Appellate Body
which faulted the EU methodology for dumping determinations on several grounds.
• The EU removed quota restrictions on non-WTO Members while it retains them on WTO
Members, in violation of the MFN principle and, thereby Article 1.6 of the ATC.
• The US changed its Rules of Origin relating to textiles and clothing for trade policy purposes and
to raise unjustified protection against imports.
• The ATC objective of facilitating the integration process and progressive phase-out of quota
restrictions has been nullified by deferring integration of the restrained products until the end of
the transition period.
17. These actions by the restraining Members have impaired balance of the Agreement and the
adoption of the two proposals could go some way towards restoring this balance.
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