RESTRICTEDWORLD TRADE
ORGANIZATIONG/TMB/R/94
29 January 2003
(03-0598)
Textiles Monitoring Body
REPORT OF THE NINETY-FIFTH MEETING
1. The Textiles Monitoring Body held its ninety-fifth meeting on 12 December 2002.
2. Present at this meeting were the following members and/or alternates:  Messrs. Alvarado/
Gough; Bernabe; Farahat/Dalela; Lee;  Seppey;  Sorensen;  Tagliani;  Yoshikawa;  Ms Zhang.
3. The TMB adopted the report of its ninety-fourth meeting (G/TMB/R/93).
4. The TMB had a discussion on whether to continue to list in the draft agenda for subsequent
meetings those notifications which had remained on the draft agenda of its meetings for severalmonths, since the Body was not in a position to take further action regarding them unless the
clarifications it had sought from the respective Members were provided. The TMB decided to take
these notifications off the draft agenda of subsequent meetings until clarifications were provided by
the Member(s) concerned, at which point the matter(s) in question would be reinstated in the draft
agenda of the subsequent meeting.
1
Notifications under Article 2.1 of the Agreement on Textiles and Clothing (ATC)
5. The TMB reverted to its examination of a notification received pursuant to Article 2.1 from
Turkey following the accession of China to the WTO2, in particular on the basis of additional
information received pursuant to Article 2.2 fro m China (G/TMB/N/447/Add.4 ) in response to the
TMB's request to both China and Turkey to provide any official documentation, relevant observationsor comments that would help in clarifying and be tter understanding the growth rates which had been
applied by Turkey on 10 December 2001
3, i.e. on the day prior to the date of China's accession to the
WTO.  The TMB decided to draw the attention of Turkey to this notification, observing that the
methodology suggested by China, as applied on the basis of the official documents provided in the
same notification, resulted in growth rates that we re not identical to the growth rates indicated by
Turkey in its last relevant notification (G/TMB/N /422/Add.3).  The TMB also observed that, in the
absence of a further communication from Turkey which could question the relevance of thedocumentation provided by China and/or the appropriateness of the quota levels contained therein, the
Body would have to consider that the growth rates applied on 10 December 2001 to the quantitative
restrictions maintained by Turkey on imports from China of the products covered by the ATC, should
be those resulting from calculations based on the documents provided by China in
G/TMB/N/447/Add.4.
                                                     
1 In view of this decision, the following notifications will be removed from the draft agenda of the
TMB meetings until clarifications requested are provided : Articles 2.6 and 2.7(b), 2.8(a) and 2.11 notifications
by Chinese Taipei, Articles 2.8(b) and 2.11 notifications by Bolivia, Chinese Taipei, Mexico and Nicaragua.
2 See G/TMB /R/86, paragraph 4;  G/TMB/R/88, paragraph 4;  G/TMB/R/90, paragraph 49;
G/TMB/R/91, paragraphs 15 to 17, G/TMB/R/93, paragraphs 12 to 14.  See also G/TMB/R/88, paragraph 8.
3 See G/TMB/R/93, paragraph 14.G/TMB/R/94
Page 2
6. The TMB reverted to its examination of a notification received pursuant to Article 2.1 from
the United States following the accession of China to the WTO4, also on the basis of an additional
communication received from the United States (G/TMB/N/63/Add.12/Suppl.5), in response to the
TMB's invitation to the United States to reconsider its position with respect to the implementation of
the appropriate increase to the annual growth ra tes of the quotas maintained on imports from China
and to implement the necessary adjustments to its respective methodology applied.5 In this additional
communication, the United States stated that it "ha[d] carefully examined the TMB's report analyzing
the application of the growth-on-growth provisio ns of the ATC and concluded that the methodology
used by the United States as reported in G/TMB/N/63/Add.12/Suppl.1 is in line with the obligations
of the United States as provided for in the Working Party Report of the Accession of China to the
WTO.  The US reasoning on this matter, as expressed in G/TMB/N/ 63/Add.12/Suppl. 1 and 3,
remains unchanged.  In light of this conclusion, the US  is of the view that it would not be appropriate
to make any adjustment to the methodology applied".
7. In starting to review the additional communication received from the United States, the TMB
recalled that it had devoted a detailed examination to the manner in which the growth-on-growth
provisions provided for in Articles 2.13 and 2.14 of the ATC had to be implemented by the Members
maintaining restrictions falling under Article 2 on imports from China.6  In its in-depth examination,
the TMB had considered the relevant notifications received under Article 2.1 from the Members
concerned (Canada, the European Communities, Turk ey and the United States), as well as the
respective observations made by China with reference to Article 2.2.  In order to discharge its
responsibilities in this regard, the TMB had had to address also provisions of the respective legal
instruments of accession in addition to the ATC.  Though the TMB had found that the relevantprovisions of the legal instruments of China's accession had not provided an unambiguous guidance
regarding some of the aspects involved, the TMB had been able to reach a conclusion on those
minimum requirements which, in its view, had to be  implemented by the Members concerned.  Since
the United States had reported an implementati on which did not meet these minimum requirements,
the TMB "decided to invite it to reconsider its respective position in light of the TMB's comments,observations and conclusion and to implement the necessary adjustments in its respective
methodology applied".
7
8. The TMB noted with concern that it had taken almost three months before the follow-up
information was provided by the United States in response to the invitation to the United States to
reconsider its position in light of the conclusions reached by the TMB.  It was also observed that the
United States had not provided specific arguments as to why its reasoning on the matter remained
unchanged and that, therefore, it had not found it appropriate to make any adjustments to itsmethodology applied.
9. In view, in particular, of the fact that the communication by the United States had been
received just prior to the start of the meeting, the TMB decided to revert to this matter at its
subsequent meeting.
Notification under Article 2.17 of the ATC
10. The TMB concluded the review, pursuant to Article 2.21, of the notification made by Canada
of administrative arrangements agreed between Canada and the Separate Customs Territory of
Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei) (G/TMB/N/456), taking also into account the
                                                     
4 See G/TMB/R/86, paragraph 5;  G/TMB/R/88, paragraph 5;  G/TMB/R/90, paragraph 50;
G/TMB/R/91, paragraphs 7 to 14 and G/TMB/R/93, paragraphs 15 and 16.
5 See G/TMB/R/90, paragraph 33.
6 See G/TMB/R/90, paragraphs 5 to 34.
7 See G/TMB/R/90, paragraph 33.G/TMB/R/94
Page 3
replies provided in response to the TMB's request for additional information from both Canada
(G/TMB/N/456/Add.1) and Chines e Taipei  (G/TMB/N/457).
11. The TMB observed that the administrative arrangements contained detailed provisions
regarding the operation by Chinese Taipei of an export control system, the implementation of the
flexibility provisions notified by Canada pursuant to Article 2.1, exchange of statistics, the treatmentof re-exports and consultations with respect to any matter arising from the implementation or
operation of the ATC or of the administrative arrangements or any matter germane thereto.
12. Recalling that according to Article 2.17 "[a]dmin istrative arrangements, as deemed necessary
in relation to the implementation of any provision of [Article 2], shall be a matter for agreement
between the Members concerned", the TMB noted that most of the provisions of administrative
arrangements agreed between Canada and Chinese Taipei were designed to ensure the implementation
of measures notified by Canada under Article 2.  It was also noted that the arrangements notified byCanada had been bilaterally agreed between the two Members concerned.
13. The TMB sought, inter alia , clarifications from both Members on how, in their view, the
provision of statistics relating to the export or import of products not contained in the Article 2.1
notification of Canada's quantitative restrictions  on imports from Chinese Taipei were deemed
necessary in relation to the implementation of any provision of Article 2 of the ATC.  Canada statedthat "[p]aragraph 13 of the Administrative Arrangements, which reserves the right of both parties to
seek additional statistics from the other, including statistics for non-restrained products, is common to
all of Canada’s administrative arrangements pertaining to apparel and textile restraints.  It is intended,
inter alia , to address issues concerning circumvention and transshipment.  In this context, we note that
Article 5.1 of the ATC explicitly acknowledges the importance of this issue, indicates that 'Membersshould establish the necessary legal provisions and/or administrative procedures to address and take
action against such circumvention', and calls on all Members to cooperate fully to address these
problems."  Chinese Taipei stated that "[p]aragraph 13 is derived from the bilateral arrangement prior
to [Chinese Taipei's] accession to the WTO.  For the purpose of facilitating textiles trade between
both parties, we have agreed to keep this paragraph in the Arrangement and for this reason weconsider it appropriate not to modify the Arrangem ent in this regard".  As to the TMB's question
concerning the provision of the administrative arrangements which states that "Canada will, so far as
possible, inform Chinese Taipei when imports into Canada of restrained textile products are
subsequently re-exported from Canada", so that Chinese Taipei could credit back the quantity
involved to the appropriate quantitative limits, Canada replied that "[s]uch situations occur regularly,
for example when the Chinese Taipei cancels an export license for a shipment which is subsequently
not exported to Canada.  In this case, Chinese Taipei would inform Canada through our electronicverification system that the relevant export license had been cancelled and then would re-credit
automatically its quota so that it may re-allocate the amount to another shipment. However, no credit
would be authorized in a situation where Chinese Taipei were seeking to cancel an export license
against which a shipment had already been entered into Canada.  This is exceedingly rare in the case
of Chinese Taipei given the aforementioned electronic verification system".
14. On that basis, the TMB took note of the administrative arrangements agreed between Canada
and Chinese Taipei.
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