WORLD TRADE
ORGANIZATIONG/TMB/R/41
29 April 1998
(98-1727)
Textiles Monitoring Body
REPORT OF THE FORTY-SECOND MEETING
1. The Textiles Monitoring Body held its forty-second meeting on 11 to 13 March 1998.
2. Present at this meeting were the following members and alternates:  Messrs. Babajide;
Da Costa/Miss Gervasi;  Messrs. Khalil/Mukerji;  Kobayashi;  Malik/Miss Morais;  Messrs. Moroz;
Rey;  Tadpitakkul;  Tagliani; Tong/Kim.
3. The TMB adopted the report of its forty-first meeting (G/TMB/R/40).
Notification under Articles 2.6 and 2.7(a), 2.8(a)  and 2.11 of the ATC: Communication Received in
Response to the Recommendation of the TMB
4. On 16 and 21 May 1997 the TMB had, following an Article 2.21 notification by Colombia,
also on behalf of a number of other WTO Members that are also members of the International Textiles
and Clothing Bureau1, reviewed certain aspects of the first stage integration programme of the
European Community.  The comments and findings, as well as TMB’s recommendation, arecontained in G/TMB/R/29.
5. The European Community, stating that it accepted the TMB’s findings, notified its revision
(G/TMB/N/1/Corr.2 and Corr.2/Suppl.1, and G/TMB/N/207/Corr.1) to the TMB, which resulted in
changes to both its first and second stage integration programmes.  In a detailed product-by-product
examination, the TMB considered this communication, in light of the comments and findingscontained in G/TMB/R/29.
Chapter 39
6. Regarding the three HS numbers under Chapter 39 (ex 3921 12, ex 3921 13 and ex 3921 90:
woven, knitted or non-woven fabrics coated, covered or laminated with plastics), the TMB had
observed, inter alia , that it "could not agree with the contention of Colombia that the totality of the
import volume of each of the three HS numbers under Chapter 39 did not qualify for the purpose of
calculating the volume of imports of the products integrated for the first stage of the ATC.  Thiswould have been tantamount to saying that these products could not, under the circumstances, be
integrated by the European Community during the lifetime of the ATC.  On the other hand, the TMB
could not accept the arguments presented by the European Community that it could include the
volume corresponding to the totality of imports  into the European Community of the full HS
numbers".  Furthermore, "it was clear from the pr oduct specification and description of the Annex to
the ATC that not all the products falling under HS lines 3921.12, 3921.13 and 3921.90 were covered
by the ATC, and that, therefore, the import volume of non-covered items should not have been
included in the EC's notification.  In the absence of appropriately detailed statistical data the TMB
was not in a position to determine the precise volume of imports that should be counted for the
                                                     
1These Members are, hereafter, referred to as Colombia .G/TMB/R/41
Page 2
purpose of calculating the volume of imports of the products integrated for the first stage of the ATC.
In this respect the TMB noted that the representative of the European Community had estimated that
at least 90 per cent of the products concerned were a combination of plastics with textile materials". 2
7. In its communication, the European Community st ated that during the re-examination of its
first stage integration programme in light of the TMB's comments and findings, it had again checked
the information available to it concerning the nature and quantity of imports under the HS lines inquestion.  The Notes of the Harmonized System for Chapters 56 and 59 expressly excluded certain
textiles combined with plastics, particularly wher e the textile element is present for reinforcement.
All such products fell under Chapter 39 and were important imports as raw materials, in particular for
luggage, shoes and technical products.  As such, they formed the bulk of products imported under the
HS lines in question.  The European Community had verified this position with the competent
Community authorities.  In addition, the Community  had reviewed all the rulings on binding tariff
information given by the relevant Community authorities in respect of these HS numbers and whichrulings are representative of actual trade in the lines in question.  Of 83 given, 77 related to
combinations of textiles with plastics.  In these circumstances the EC had revised the amounts for
imports in respect of these lines to correspond with its assessment that at least 90 per cent of the
6-digit HS lines related to textiles combined with plastics and so fell within the definition of the ATC
Annex.
8. The TMB observed that the re-assessment made by the European Community, which resulted
in a reduction by ten per cent of the trade covered under the relevant "ex HS lines", was in line with
the assessment that had been made by the representative of the European Community at the TMB
meeting on 16 and 21 May 1997.  The TMB noted that the revision made by the European
Community resulted from an estimate which amounted to 90 per cent of the trade of the three six-digit"ex HS lines" notified under Chapter 39 being included, and that in support of this estimate the
explanations provided by the European Community were those contained in paragraph 7 above. The
TMB observed, however, that it was not in a position to verify estimates provided by Members.
Chapter 42
9. Regarding the four HS numbers under Chapter 42 (ex 4202 12, ex 4202 22, ex 4202 32 and
ex 4202 92:  luggage, handbags and flat goods with an outer surface predominantly of textile
materials), the TMB had observed, inter alia , "that all the products classified under HS lines 4202.12,
4202.22, 4202.32 and 4202.99 were grouped into two sub-categories, depending on the material of the
outer surface of the product.  Colombia accepted that products with an outer-surface of textile
materials were eligible for integration under the ATC, but Colombia and the European Communitydisagreed as to whether or not products with an outer surface of plastic sheeting or of moulded plastic
fell under the product coverage of the ATC.  In the view of Colombia they did not, whereas the
European Community argued that plastic sheeting or moulded plastic could be combinations of plastic
with textile materials and, therefore, could be classified under Chapter 39.  The TMB observed,
however, that the European Community had not stated that all the products with an outer surface of
plastic sheeting or of moulded plastic contained textile materials.  Furthermore, in reply to questions
put by the TMB, the European Community had stated that probably 95 per cent of the productsconcerned were not made of plastics alone.  On the basis of the arguments and explanations provided,
the TMB could not agree with Colombia that the totality of positions 4202.12.11, 4202.12.19,
4202.12.50, 4202.22.10, 4202.32.10, 4202.92.11 4202.92.15 and 4202.92.19 should be disregarded
for the purpose of integration under the ATC, nor did it agree with the EC's argument that they should
be fully included.  With respect to the EC's position, while it could be admitted that the tariff positionsenumerated above did include luggage of plastic sheeting that was produced by combining plastics
                                                     
2G/TMB/R/29, paragraphs 19 and 20.G/TMB/R/41
Page 3
with textile materials, it had not been demonstrat ed that all these products were produced in this
manner.  Therefore, the integration programme adopted by the European Community could also have
included imports which did not fall under the coverage of the ATC.  The TMB was not, however, in a
position to assess the magnitude of this discrepancy;  it reiterated the view that this information could
best be provided by the importing Member itself".3
10. In its communication, the European Community stated that, in view of the recommendation
made by the TMB, it had effected a further review of information available to the competent
authorities of the European Community, including rulings in respect of binding tariff information.
The products included in sub-chapter 4202 were intended to be durable.  Thus plastic bags per se,
(e.g. supermarket bags) were excluded by the HS Notes for Chapter 42 (and fell under Chapter 39).
Given the nature (and, by definition of the HS Note s, durability) of the products in question, textiles
formed an important component of the products in question.  This was borne out by the rulings on
Binding Tariff Information given by the competent Community authorities which (where they did notrelate to products made entirely from textiles) related almost in their totality to products made of
textiles combined with plastics under sub-chapter 3921, which products themselves fell within the
ATC.  The Community had, on the basis of a highly conservative assessment, revised those HS 8-digit
positions in question (i.e. 4202.12.11, 4202.12.19, 4202.12.50, 4202.22.10, 4202.32.10, 4202.92.11
4202.92.15 and 4202.92.19) to include in the products counted for the purpose of integration45 per cent of imports.
11. In considering the review made by the European Community, the TMB observed that the
European Community had, based on estimates resulting in a 55 per cent reduction for eight out of the
15 eight-digit HS lines in question (as listed in paragraph 10 above), reduced by about 15 per cent the
volume of imports covered by the ATC under the "ex HS lines" of Chapter 42 contained in theoriginal notification of its first stage of integrat ion. The TMB observed, however, that it was not in a
position to verify estimates provided by Members.
Chapter 64
12. With respect to the HS line ex 6406 10 (Foo twear of which 50 per cent or more of the
external surface area is textile material), the TMB, comparing the respective product descriptions andtaking into account the arguments presented, had been "of the view that, though there could be
products under HS number 6406.10 which contained a mixture or combination of leather with textile
materials, most of the products classified under CCT positions 6406.10.11 and 6406.10.19 were
presumably uppers or parts of uppers made of leather, which were not part of the Annex to the ATC.
Imports of leather uppers could not qualify for integration under the ATC". 
4
13. In its communication, the European Community stated that in re-examining its first stage
integration programme it had followed the findings of the TMB, confirming the submission by
Colombia, in respect of positions 6406 10 11 and 6406 10 19, and had therefore excluded the totality
of imports under these lines from its corrected and revised first stage of integration, leaving position
6406 10 90 (in full) as corresponding with the description in the ATC Annex.
14. As regards HS line ex 6406 99 (legwarmers and gaiters of textile material), the TMB had
"understood that gaiters were included in the product description of CCT line 6406.99.10, while legwarmers, the only other product included in the Annex to the ATC, could presumably fall under
                                                     
3G/TMB/R/29, paragraphs 24 and 25.
4G/TMB/R/29, paragraph 28.G/TMB/R/41
Page 4
sub-headings 6406.99.10 or 6406.99.90.  Products defined in 6406.99.30 and 6406.99.50 did not seem
to correspond to the product description of the ATC".5
15. In its communication, the European Community stated that, as a result of its re-examination,it had excluded imports in respect of products under positions 6406 99 30 and 6406 99 50 which the
TMB, confirming the submission by Colombia, considered not to correspond to the product
description of the ATC.  The EC considered that legwarmers fell within position 6406 99 90.However, since the position was defined by reference to "other" the EC had revised the amount of
imports to 50 per cent to ensure that the amount was attributable to the factual description of the ATC
Annex.
16. The TMB noted that, as a result of its re-examination, the European Community had reduced
by about 87 per cent the volume of imports covered by the ATC under the "ex HS lines" of
Chapter 64 contained in the original notification of its first stage of integration, since the volume of
imports of four out of the seven 8-digit HS lines in question had been discounted.  With respect toimports of leg warmers, the TMB reiterated its observation that it was not in a position to verify
estimates provided by Members.
Chapter 70
17. With respect to HS ex 7019.10 (yarns of fibre glass), the TMB had agreed with the
European Community and Colombia "that HS line 7019.10.59 contained yarns and should be countedfor the purpose of calculating the volume of imports to integrate.  Similarly, the TMB was of the view
that sub-position 7019.10.99 could also include yarns, since the structure of heading 7019.10 as well
as the explanatory notes in the CCT made it sufficiently clear that yarn could be produced of both
filaments and staple fibres. On the other hand,  the TMB was unable to reach a definitive conclusionas to whether the products under sub-headings 7019.10.10 and 7019.10. 51 could correspond to thedefinition in the Annex of the ATC for ex 7019.10 (i.e. yarns of fibre glass)".
6
18. In its communication, the European Community stated that, following re-examination, it hadrevised its first stage integration by excluding imports under position 7019 10 10, (chopped strands) in
agreement with Colombia, and despite the TMB’s failure to reach a conclusion, on the basis that these
products did not fall under the ATC Annex.  The EC had continued to include imports in respect ofproducts covered by position 7019 10 51 (rovings) within its first stage of integration for the reasons
already given to the TMB.
7  In addition, the EC had examined notifications made by other Members
in respect of ex 7019 10 and had noted that, while some Members utilized different nomenclature with
different sub-headings, the general result would have appeared to be that continuous fibres were
included while discontinuous fibres were omitted.
19. The TMB observed that, as a result of the re-examination by the European Community, the
volume of imports covered by the ATC under the "ex HS lines" of Chapter 70 contained in the
original notification of its first stage of integration had overall been reduced by 9.7 per cent
(considering also imports under HS line 7019 20, which were not challenged by Colombia), since it
had discounted the volume of imports of one out of the four 8-digit HS lines falling under HS line
ex 701910.  The TMB also noted that, regarding two 8-digit HS lines, the European Community had
come to the same conclusion as Colombia.
                                                     
5G/TMB/R/29, paragraph 29.
6G/TMB/R/29, paragraph 33.
7G/TMB/R/29, paragraph 31.G/TMB/R/41
Page 5
Chapter 96
20. Regarding the products falling under HS 9612.10, the TMB had considered it unlikely that, in
practical terms, the products falling under HS 9612.10.10 would include textile products.  Therefore,
it appeared to the TMB that only imports under sub-position 9612.10.90 could qualify for integration
under the ATC.8
21. In its communication, the European Community stated that in its re-examination of the
volume of trade covered by the ATC under the two "ex HS lines" of Chapter 96 included in its first
stage integration programme, it had followed the findings of the TMB, confirming the submission of
Colombia, and excluded imports of products under position 9612 10 10, counting only the volume of
imports under position 9612 10 90.
22. The TMB observed that as a result of the re-examination by the European Community, the
volume of imports covered by the ATC under the "ex HS lines" of Chapter 96 contained in the
original notification of its first stage of integration had been reduced by 68 per cent , since the volumeof imports of one of the two 8-digit HS lines in question had been discounted.  The TMB also noted
that for both 8-digit HS lines, the European Community had come to the same conclusion as
Colombia.
Summary Observations
23. In summarizing the outcome of the re-examination by the European Community of its first
stage integration programme in light of the TMB's comments and findings, the TMB noted that:
- the totality of the volume of trade covered by six 8-digit HS lines had been
discounted, in agreement with the assessment made by Colombia;
- the totality of the trade covered by eleven 8-digit HS lines had been counted, also in
agreement with the assessment made by Colombia;
- the volume of trade covered by twelve 8-digit HS lines had been reduced, albeit not
as much as claimed by Colombia;
- the totality of the volume of trade covered by two 8-digit HS lines had been
maintained. The TMB had found 9  in the case of one line that the sub-position could
also include ATC products; in the case of the other it had not been able to reach adefinitive conclusion as to whether the sub-position could correspond to the definition
in the ATC .
24. As a result of the re-examination by the European Community of its first stage integration
programme in response to TMB's recommendation, and in order to compensate for the shortfall which
had resulted from the fact that part of the volume of 1990 imports falling under the relevant"ex HS lines" had been discounted, the European Community had transferred four 6-digit HS lines
from its Stage 2 integration programme to the Stage 1 programme.  As a result, the revision made by
the European Community showed that the volume of the products integrated for Stage 1 amounted, as
revised, to 16.20 per cent of 1990 imports into the European Community, and the revised volume of
the products integrated for Stage 2 to 17.11 per cent.  The TMB took note of these modifications, and
                                                     
8G/TMB/R/29, paragraph 37.
9G/TMB/R/29, paragraph 33.G/TMB/R/41
Page 6
of the fact that the integration programmes, as revised, met the requirements defined in Articles 2.6
and 2.8(a), respectively (G/TMB/N/1/Corr.2 a nd Corr.2/Suppl.1, and G/TMB/N/207/Corr.1).
25. The TMB took note of the communication received from the European Community in
response to the recommendation made by the TMB at its meeting of 16 and 21 May 1997. In doing so,
the TMB observed that, whilst the approach chosen by the European Community was inherent in the
TMB’s own conclusions of May 199710 , the revisions implemented by the Community had been
based on estimates with respect to a number of ex HS positions.  The TMB reiterated that it was not in
a position to verify estimates provided by Members.
26. The TMB also recalled that, as requested by the European Community, the Body had decided
to verify with respect to a number of other WTO Members whether the volume of imports notified in
their respective integration programmes for "ex HS lines" (and, consequently, the data for the total
imports) related precisely to the products described in the Annex to the ATC.  The TMB observed that
a number of such Members, in their respective responses, had opted for solutions which consisted,inter alia , in adding products to their first stage integration programme, so that the volume of products
integrated for Stage 1 would be above the requirement defined in Article 2.6 of the ATC even if the
volume of imports of the "ex HS lines" with statistical difficulties were to be deducted in its entirety.
Notification under Articles 2.8(a) and 2.11 of the ATC: Communication Received in Response to
Questions Put by the TMB
27. The TMB took note of a communication by Li echtenstein (G/TMB/N/219/Add.1), in which it
responded to questions put by the TMB with a view  to verifying whether the statistical information
provided regarding integration referred, where appropriate, to those portions of the HS lines covered
by the ATC and not to the entire respective HS 6-digit lines (G/TMB/R/29, paragraphs 43 to 45).  In
this communication, related to the notification of its second stage of integration, Liechtenstein statedthat the answers provided by Switzerland to the questions put by the TMB with respect to
Switzerland’s notification made under the provisions of Articles 2.8(a) and 2.11
11 were also
applicable to the notification of Liechtenstein.
Notifications under Articles 2.8(a) and 2.11 of the ATC
28. The TMB reviewed, pursuant to Article 2.21, the notification made under Articles 2.8(a)
and 2.11 by Bangladesh (G/TMB/N/320).  During this review, the TMB noted that the products
integrated amounted to 17.04 per cent of the value of  imports in 1990 of the products falling under the
coverage of the Agreement.  The TMB also noted that, in accordance with Article 2.8(a), the products
integrated included products from each of the four groups:  tops and yarns, fabrics, made-up textile
products and clothing.  With regard to the fact that the calculation of the share of the productsintegrated had been made on the basis of value, the TMB ensured that no better data were available
and that Bangladesh had followed the same approach as that of the notification it had made pursuant
to Articles 2.6 and 2.7(b).
29. The TMB reviewed, pursuant to Article 2.21, the notification made under Articles 2.8(a)
and 2.11 by Guatemala (G/TMB/N/304/Rev.1).  Du ring this review, the TMB noted that, in
accordance with Article 2.8(a), the volume of the products integrated amounted to 17.50 per cent of
the volume of imports in 1990 of the products falling under the coverage of the Agreement.  The
                                                     
10G/TMB/R/29, paragraph 41.
11See G/TMB/N/206/Adds.1 to 3 and G/TMB/R/37, paragraph 7.G/TMB/R/41
Page 7
TMB also noted that, in accordance with Article 2.8(a), the products integrated included products
from each of the four groups:  tops and yarns, fabrics, made-up textile products and clothing.
30. The TMB reviewed under Article 2.21 the notification made, pursuant to Articles 2.8(a)
and 2.11, by Liechtenstein (G/TMB/N/219 and Add.1).12   During this review, the TMB noted that, in
accordance with Article 2.8(a), the volume of the products integrated amounted to 17.001 per cent 13
of the volume of imports in 1990 of the products falling under the coverage of the Agreement.  The
TMB also noted that, in accordance with Article 2.8(a), the products integrated included products
from each of the four groups:  tops and yarns, fabrics, made-up textile products and clothing.
Notification under Article 2.18 of the ATC
31. The TMB considered the notification made pursuant to Article 2.18 by the European
Community on improvements in access for exports of Members subject to restrictions on the day
before the entry into force of the WTO Agreement and whose restrictions represented 1.2 per cent or
less of the total volume of the restrictions applied by an importing Member as of 31 December 1991and notified under Article 2 of the ATC.  The Members concerned were Peru and Sri Lanka.  With
regard to Peru, the two restrictions as notified under Article 2  had growth rates of 5 per cent and
7 per cent, which would become 9.21 per cent and 12.89 per cent, respectively, for the second stage of
integration.  The four restrictions concerning Sri Lanka, as notified under Article 2, had growth rates
of 7 per cent (for three) and 8 per cent (for the remaining restriction), which would become12.89 per cent and 14.73 per cent, respectively, for the second stage of integration.  These growth
rates resulted from the application of the increase in growth rate normally applicable for the third
stage (27 per cent) to the growth rates used for these countries during the second stage (where the
European Community took the growth rates notified under article 2 increased by 16  per cent and then
further by 25 per cent) (G/TMB/N/319).
Notifications under Articles 2.17 and 5 of the ATC
32. The TMB reverted to its consideration of the notifications made pursuant Article 2.17 by
Pakistan and under Article 5 by the United States of a mutually satisfactory understanding reached,
following consultations, between the two Members 14, and decided to revert further to its review at a
subsequent meeting.
Notifications under Articles 6.9 of the ATC
33. The TMB resumed its review15 , pursuant to Article 6.9, of the restraint measure agreed
between the United States and Thailand on imports of artificial staple fibre yarn for sale (US
category 603) and decided to revert to its review at its subsequent meeting.
                                                     
12See also paragraph 27.
13The data provided refer to imports by Switzerland and Liechtenstein as separate data for
Liechtenstein are not collected.
14See G/TMB/R/11, paragraph 12, G/TMB/R/35, paragraph 16, and G/TMB/R/39, paragraph 11.
15See G/TMB/R/39, paragraph 15.G/TMB/R/41
Page 8
Observations with Respect to Late Notifications
34. With respect to notifications addressed to the TMB after the respective deadlines foreseen in
the ATC, the TMB reiterated that its taking note of late notifications was without prejudice to the
legal status of such notifications.
Oral Report by Chairpersons of Subsidiary Bodies to the General Council
35. In the context of the report of General Council to the 1998 Ministerial Conference and in
view of the proposal made by the Chairman of the General Council at its meeting on
10 December 1997 that "the report of the General Council to the 1998 Ministerial Conference consist
of the 1997 Annual reports of the General Council and its subsidiary bodies together with a brief
update report of the General Council concerning developments in the first months of 1998, and that
Chairpersons of subsidiary bodies be invited to report orally to the General Council on work done
since December 1997" (WT/GC/M/25), the TMB authorized its Chairman to prepare a contribution to
the oral report of the Chairman of the Council for Trade in Goods on the work accomplished by theTMB since December 1997.
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