EL CONSEJO DE LAS COMUNIDADES EUROPEAS,

Visto el Tratado constitutivo de la Comunidad Económica Europea y, en particular, su artículo 113,

Vista la propuesta de la Comisión,

Considerando que la Comisión ha negociado en nombre de la Comunidad un acuerdo sobre el comercio de los productos textiles con India;

Considerando que es conveniente aplicar dicho acuerdo, con carácter provisional a partir del 1 de enero de 1987, en espera de que se cumplan los procedimientos necesarios para su celebración, sin perjuicio de que se aplique con carácter provisional y recíproco por parte del país asociado,

DECIDE:

Artículo 1

Se aplicará con carácter provisional a partir del 1 de enero de 1987, el acuerdo entre la Comunidad Económica Europea y

la República de la India sobre el comercio de los productos textiles, en espera de su celebración formal, sin perjuicio de que se aplique con carácter provisional y recíproco por parte del país asociado.

El texto del acuerdo se adjunta a la presente Decisión (1).

Artículo 2

Se invita a la Comisión a que ponga la presente Decisión en conocimiento del país asociado y recabe su consentimiento, que comunicará al Consejo.

Hecho en Bruselas, el 11 de diciembre de 1986.

Por el Consejo

El Presidente

K. CLARKE

(1) Por razones de orden material el presente Acuerdo se publica en el Diario Oficial de las Comunidades Europeas en la lengua en que ha sido negociado.

AGREEMENT

between the European Economic Community and the Republic of India on Trade in textile products

Done at Brussels on 31 October 1986

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

of the one part, and

THE GOVERNMENT OF THE REPUBLIC OF INDIA,

of the other part,

DESIRING to ensure the orderly and equitable development of trade in textile products between the European Economic Community (hereinafter referred to as 'the Community') and India.

ON THE BASIS of the Arrangement regarding international trade in textiles (hereinafter referred to as 'the Geneva Arrangement'), and in particular Article 4 thereof, as renewed under the Protocol and the conclusions adopted by the Textiles Committee on 31 July 1986,

HAVE DECIDED in a spirit of mutual cooperation to conclude this Agreement and to this end have designated as their Plenipotentiaries:

THE COUNCIL OF THE EUROPEAN COMMUNITIES:

THE GOVERNMENT OF THE REPUBLIC OF INDIA:

WHO HAVE AGREED AS FOLLOWS:

SECTION I

Trade arrangements

Article 1

1. The Parties recognize and confirm that, subject to the provisions of this Agreement and without prejudice to their rights and obligations under the General Agreement on Tariffs and Trade, the conduct of their mutual trade in textile products shall be governed by the provisions of the Geneva Arrangement and the Protocol of Extension dated 31 July 1986.

2. In respect of the products covered by this Agreement, the Community undertakes not to introduce quantitative restrictions under Article XIX of the General Agreement

on Tariffs and Trade or Article 3 of the Geneva Arrangement.

3. Measures having equivalent effect to quantitative restrictions on the importation into the Community of the products covered by this Agreement shall be prohibited.

Article 2

1. This Agreement shall apply to trade in textile products of cotton, wool and man-made fibres originating in India which are listed in Annex I.

2. The classification of the products covered by this Agreement is based on the nomenclature of the Common Customs Tariff and on the nomenclature of goods for the external trade statistics of the Community and statistics of trade between Member States (NIMEXE).

From the entry into force of the International Convention

on the Harmonized Commodity Description and Coding

System (HS) this classification will be based on the

Harmonized System and on the Community nomenclatures derived from that system.

3. The origin of the products covered by this Agreement shall be determined in accordance with the rules in force in the Community.

Any amendment to these rules of origin shall be communicated to India and shall not have the effect of reducing any quantitative limit established in Annex II.

The procedures for control of the origin of the products referred to above are laid down in Protocol A.

Article 3

India agrees for each Agreement year to restrain its exports to the Community of the products described in Annex II to the limits set out therein.

Exports of textile products set out in Annex II shall be subject to a double-checking system specified in Protocol A.

Article 4

India and the Community recognize the special and differential character of re-imports of textile products into the Community after processing in India.

Such re-imports may be agreed outside the quantitative limits established under this Agreement provided that they are effected in accordance with the regulations on economic outward processing in force in the Community.

Article 5

With reference to Article 12 (3) of the Geneva Arrangement, the limitations set out in this Agreement will not apply to handloom fabrics of the cottage industry, hand-made cottage industry products made of such handloom fabrics and traditional folklore handicraft textile products provided

that these products meet the conditions laid down in

Protocol B.

Article 6

1. Imports into the Community of textile products covered by this Agreement shall not be subject to the quantitative limits established in Annex II, provided that they are declared to be for re-export outside the Community in the same state or after processing, within the framework of the administrative system of control which exists within the Community.

However, the release for home use of products imported under the conditions referred to above shall be subject to the production of an export certificate issued by the Indian authorities, and to proof of origin in accordance with the provisions of Protocol A.

2. Where the Community authorities have evidence that imports of textile products have been set off against a

quantitative limit established under this Agreement, but that the products have subsequently been re-exported outside the Community, the authorities concerned shall inform the Indian authorities within four weeks of the quantities involved and authorize imports of identical quantities of the same products, which shall not be set off against the quantitative limit established under this Agreement for the current or the following year.

Article 7

1. In any Agreement year advance use of a portion of the quantitative limit

established for the following Agreement year is authorized for each category of products up to 5 % of the quantitative limit for the current Agreement year.

Amounts delivered in advance shall be deducted from the corresponding quantitative limits established for the following Agreement year.

2. Carryover to the corresponding quantitative limit for the following Agreement year of the amounts not used during any Agreement year is authorized for each category of products up to 7 % of the quantitative limit for the current Agreement year.

3. Transfers in respect of categories in Group I shall not be made from any category except as follows:

- transfers between categories 2 and 3 and from category 1 to categories 2 and 3 may be made up to 7 % of the quantitative limits for the category to which the transfer is made,

- transfers between categories 4, 5, 6, 7 and 8 may be made up to 7 % of the quantitative limit for the category to which the transfer is made.

Transfers into any category in Groups II and III may be made from any category or categories in Groups I, II and III up to 7 % of the quantitative limit for the category to which the transfer is made.

4. The table of equivalence applicable to the transfers referred to above is given in Annex I to this Agreement.

5. The increase in any category of products resulting from the cumulative application of the provisions in paragraphs 1, 2 and 3, above during an Agreement year shall not exceed 17 %.

6. Prior notification shall be given by the authorities of India in the event of recourse to the provisions of paragraphs 1, 2 and 3 above.

Article 8

1. Exports of textile products not listed in Annex II to this Agreement may be made subject to quantitative limits by India on the conditions laid down in the following paragraphs.

2. Where the Community finds, under the system of administrative control set up, that the level of imports of

products in a given category not listed in Annex II originating in India exceeds, in relation to the preceding year's total imports into the Community from all sources of products in that category, the following rates:

- 1,0 % for categories of products in Group I,

- 5,0 % for categories of products in Group II,

- 10,0 % for categories of products in Group III,

it may request the opening of consultations in accordance with the procedure described in Article 16 of this Agreement, with a view to reaching agreement on an appropriate restraint level for the products in such category.

The Community shall authorize the importation of products of the said category shipped from India before the date on which the request for consultations was submitted.

3. Pending a mutually satisfactory solution, India undertakes to limit exports of the products in the category concerned to the Community or to the regions of the Community market specified by the Community for a provisional

period of three months from the date on which the request for consultations is made. Such provisional limit shall be established at 25 % of the level of imports reached during the calendar year preceding that in which imports exceeded the level resulting from the application of the formula set out in paragraph 2, and gave rise to the request for consultation or 25 % of the level resulting from the application of the formula set out in paragraph 2, whichever is the higher.

4. Should the Parties be unable in the course of consultations to reach a satisfactory solution within the period specified in Article 16 of the Agreement, the Community shall have the right to introduce a definitive quantitative limit at an annual level not lower than the level resulting from the application of the formula set out in paragraph 2, or 106 % of the level of imports reached during the calendar year preceding that in which imports exceeded the level resulting from the application of the formula set out in paragraph 2 and gave rise to the request for consultations, whichever is the higher.

The annual level so fixed shall be revised upwards after consultations in accordance with the procedure referred to in Article 16, with a view to fulfilling the conditions set out in paragraph 2, should the trend of total imports into the Community of the product in question make this necessary.

5. The limits introduced under paragraph 2 or 4 may in no case be lower than the level of imports of products in that category originating in India in 1986.

6. Quantitative limits may also be established by the Community on a regional basis in accordance with the provisions of Protocol C.

7. The provisions of this Article shall not apply where the percentages specified in paragraph 2 have been reached as a result of fall in total imports into the Community, and not as a result of an increase in exports of products originating in India.

8. In the event of the provisions of paragraph 2, 3 or 4 being applied, India undertakes to issue export certificates for products covered by contracts concluded before the introduction of the quantitative limit, up to the volume of the quantitative limit fixed.

9. Up to the date of communication of the statistics referred to in Article 9 (6), the provisions of paragraph 2 of this Article shall apply on the basis of the annual statistics previously communicated by the Community.

10. The provisions of this Agreement which concern exports of products subject to the quantitative limits established in Annex II shall also apply to products for which quantitative limits are introduced under this Article.

Article 9

1. India shall supply the Community with precise statistical information on all export certificates issued by the Indian authorities for all categories of textile products subject to the quantitative limits established under this Agreement as well as on all certificates issued by the Indian authorities for all products referred to in Article 5 and subject to the provisions of Protocol B.

The Community shall likewise transmit to the Indian authorities precise statistical information on import authorizations or documents issued by the

Community authorities in respect of export certificates issued by India.

2. The information referred to in paragraph 1 shall, for all categories of products, be transmitted before the end of the second month following the quarter to which the statistics relate.

3. The Community shall supply to the Indian authorities import statistics for all products covered by the system of administrative control referred to in Article 8 (2) and for products covered by Article 6 (1).

4. The information referred to in paragraph 3 shall, for all categories of products, be forwarded before the end of the third month following the quarter to which the statistics relate.

5. Should it be found on analysis of the information exchanged that there are significant discrepancies between the returns for exports and those for imports, consultations may be initiated in accordance with the procedure specified in Article 16.

6. For the purpose of applying the provisions of Article 8, the Community undertakes to provide the Indian authorities before 15 April of each year with the preceding year's statistics on imports of all textile products covered by this Agreement, broken down by supplying country and Community Member State.

7. India and the Community will exchange to the extent possible available statistical information on trade in textile products.

Article 10

1. Should there be divergent opinions between India and the competent Community authorities at the point of entry into the Community on the classification of products covered by the present Agreement, classification shall provisionally be based on indications provided by the Community, pending consultations in accordance with Article 16 with a view to reaching agreement on definitive classification of the product concerned.

2. If the above provisional classification results in provisional debit against a quantitative limit for a category of products other than the category indicated on the export documents issued by the competent Indian authorities, the Community shall inform India of such provisional debit within 30 days.

3. The authorities of India shall be informed of any amendment to the tariff and statistical nomenclatures in force in the Community or any decision, made in accordance with the procedures in force in the Community, relating to the classification of products covered by this Agreement.

Any amendment to the tariff and statistical nomenclatures in force in the Community or any decision which results in a modification of the classification of products covered by this Agreement shall not have the effect of reducing any quantitative limit established in Annex II.

The procedures for the application of this paragraph are set out in Protocol A.

Article 11

1. India and the Community agree to cooperate fully in preventing the circumvention of the present Agreement.

2. Where information available to the Community as a result of the investigations carried out in accordance with the procedures set out in

Protocol A constitutes evidence that products of Indian origin subject to quantitative limits established under this Agreement have been transhipped, rerouted or otherwise imported into the Community in circumvention of this Agreement, the Community may request the opening of consultations in accordance with the procedures described in Article 16 of this Agreement, with a view to reaching agreement on an equivalent adjustment of the corresponding quantitative limits established under the Agreement.

3. Pending the result of the consultations referred to in paragraph 2, India shall as a precautionary measure, if so requested by the Community, make the necessary arrangements to ensure that adjustments of quantitative limits liable to be agreed following the consultations referred to in paragraph 2, may be carried out for the quota year in which the request to open consultations in accordance with paragraph 2 was made, or for the following year if the quota for the current year is exhausted, where clear evidence of circumvention is provided.

4. Should the Parties be unable in the course of consultations to reach a satisfactory solution within the

period specified in Article 16 of the Agreement, the Community shall have the right, where clear evidence of circumvention has been provided, to deduct from the quantitative limits established under this Agreement amounts equivalent to the products of Indian origin.

Article 12

India shall endeavour to ensure that exports of textile products subject to quantitative limits are spaced out as evenly as possible over an Agreement year, due account being taken, in particular, of seasonal factors.

Article 13

Should recourse be had to the denunciation provisions of Article 18 (4), the quantitative limits established in Annex II shall be adapted on a pro rata basis.

Article 14

1. Portions of the quantitative limits established in

Annex II not used in one Member State of the Community

may be reallocated to another Member State.

The Community undertakes to examine with care and shall reply within four weeks to any request made for reallocation by India. In the event of agreement on such reallocation, the flexibility provisions set out in Article 7 shall continue to be applicable to the levels of the original allocation.

If, in the course of the application of this Agreement, India finds that the break-down of a limit established in Annex II causes particular difficulties, it may request the opening of consultations in accordance with Article 16 with a view to reaching a mutually satisfactory solution.

2. After 1 June of each year of application of the Agreement, India may transfer, subject to prior notification to the Community, the unused quantities of the regional quota-shares of a Community quantitative limit, set out in Annex II, to the quota-shares of the same limit of other regions of the Community provided that the regional quota-share from which the transfer is made is utilized by less than 80 %, and up to the amount of the

following percentages of the quota-share to which the transfer is made:

- 2 % in the first year of the application of the Agreement,

- 4 % in the second year of the application of the Agreement,

- 8 % in the third year of the application of the Agreement,

- 12 % in the fourth year of the application of the Agreement.

The percentage in the fifth year of the application of the agreement shall be determined following consultations between the Parties.

3. Should it appear in any given region of the Community that additional supplies are required, the Community may, where measures taken pursuant to paragraph 1 are inadequate to cover those requirements, authorize the importations of amounts greater than those stipulated in Annex II.

Article 15

India and the Community undertake to refrain from discrimination in the allocation of export certificates and import authorizations or documents referred to in Protocols A and B.

Article 16

1. The special consultation procedures referred to in this Agreement shall be governed by the following rules:

- any request for consultations shall be notified in writing to the other Party,

- the request for consultations shall be followed within a reasonable period and in any case not later than 15 days following the notification by a statement setting out the reasons and circumstances which, in the opinion of the requesting Party, justify the submission of such a request,

- the Parties shall enter into consultations within one month at the latest of notification of the request, with a view to reaching agreement or a mutually acceptable conclusion within one further month at the latest.

2. The Community may request consultations in accordance with paragraph 1 of this Article and of paragraph 11 of the Protocol of Extension of the Geneva Arrangement when it ascertains that during a particular year of application of the Agreement, real difficulties arise in the Community or one of its regions from a sharp and substantial increase, by comparison to the preceding year, in imports of a given category of Group I subject to the quantitative limits set out in Annex II.

3. If necessary, at the request of either of the Parties and in conformity with the provisions of the Geneva Arrangement, consultations shall be held on any problems arising from

the application of this Agreement. Any consultations held

under this Article shall be approached by both Parties in a

spirit of cooperation and with a desire to reconcile the difference between them.

Article 17

This Agreement shall apply, on the one hand, to the territories in which the Treaty establishing the European Economic Community is applied and under the conditions laid down in that Treaty and, on the other hand, to the territory of India.

SECTION II

Transitional and final provisions

Article 18

1. This Agreement shall enter into force on the first day of the month following the date on which the Contracting Parties notify each other of the completion of the procedures necessary for this purpose. It shall be applicable until 31 December 1991, except that, for the period 1 August to 31 December 1991, this Agreement is subject to both Parties being free to request, at any time, consultations with a view to proposing revisions in the light of any successor arrangement to the Geneva Arrangement.

2. This Agreement shall apply with effect from 1 January 1987.

3. Either Party may at any time propose modifications to the Agreement.

4. Either Party may at any time donounce this Agreement provided that at least 60 days' notice is given. In that event, the Agreement shall come to an end on the expiry of the period of notice.

5. The Annexes, Protocols and Agreed Minutes to this Agreement shall form an integral part thereof.

Article 19

This Agreement shall be drawn up in two copies in the Danish, Dutch, English, French, German, Greek, Italian, Portuguese, Spanish and Hindi languages, each of these texts being equally authentic.

ANNEX I

LIST OF PRODUCTS

1. When the constitutive material of the products of categories 1 to 114 is not specifically mentioned these products are to be taken to be made exclusively of wool or of fine animal hair, of cotton or of man-made fibres.

2. Garments which are not recognizable as being garments for men or boys or as garments for women or girls are classified with the latter.

3. Where the expression 'babies' garments' is used, this is meant also to cover girls' garments up to and including commercial size 86.

ANNEX II

For practical reasons the product descriptions used in Annex I are given in the present Annex in abbreviated form