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 China;

Considerando que es conveniente aplicar dicho Acuerdo, con carácter provisional a partir del 1 de enero de 1989, 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 1989, el Acuerdo entre la Comunidad Económica Europea y la República Popular de China 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.

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 19 de diciembre de 1988.

Por el Consejo

El Presidente

Th. PANGALOS

AGREEMENT

between the European Economic Community and the People's Republic of China on trade in textile products

Initialled at Brussels on 9 December 1988

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

of the one part, and

THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA

of the other part,

DESIRING to promote, with a view to permanent cooperation and in conditions providing every security for trade, the orderly and equitable development of trade in textile products between the European Economic Community (hereinafter referred to as 'the Community') and the People's Republic of China (hereinafter referred to as 'China'),

RESOLVED to take the fullest possible account of the serious economic and social problems at present affecting the textile industry in both importing and exporting countries, and in particular, to eliminate real risks of market disruption on the market of the Community and real risks of disruption to the textile trade of China,

HAVING REGARD to the Arrangement regarding International Trade in Textiles (hereinafter referred to as 'the Geneva Arrangement'), and in particular Article 4 thereof, and to the conditions set out in the Protocol extending the Arrangement,

HAVING REGARD to the Trade and Economic Cooperation Agreement between the Community and China,

HAVE DECIDED to conclude this Agreement and to this end have designated as their Plenipotentiaries:

THE COUNCIL OF THE EUROPEAN COMMUNITIES:

THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA:

WHO HAVE AGREED AS FOLLOWS:

I. General provisions

Article 1

The Parties recognize and confirm that without prejudice to the rights and obligations under the Trade and Economic Cooperation Agreement between the Community and China the conduct of their mutual trade in textile products shall be governed by the provisions of this Agreement.

Article 2

1. Trade in textile products listed in Annex I and originating within the Contracting Parties shall be liberalized

for the duration of this Agreement under the conditions set out therein.

2. Trade in textile products listed in Annex II and originating within the Contracting Parties shall be covered by this Agreement solely for the purposes of application of the provisions making explicit reference to that Annex.

3. Subject to the provisions of this Agreement, the Community undertakes, in respect of the products listed in Annex I, to suspend the application of quantitative import restrictions currently in force and not to introduce new quantitative restrictions under Article 3 of the Geneva Arrangement.

4. Measures having equivalent effect to quantitative restrictions on the importation into the Community of the products listes in Annex I shall be prohibited.

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II. Arrangements for exports to the Community

Article 3

1. China agrees to establish and maintain for each calendar year quantitative limits on its exports to the Community in accordance with Annex III. Such exports shall be subject to a double-checking system specified in Protocol A.

2. In administering the quantitative limits referred to in paragraph 1, China shall ensure that the Community textile industry shall benefit from utilization of the said limits.

More particularly, as regards categories 2, 3 and 37 China undertakes to reserve, as a priority, 50 % of the quantitative limits concerned for industry users during one hundred and fifteen days beginning on 1 January of each year. For this purpose, contracts made with the industry during the period in question shall be taken into consideration.

3. To facilitate the implementation of these provisions the Community shall provide the competent Chinese authorities, before the end of each year, with a list of interested manufacturers and processors and, if possible, of the quantity of products requested for each firm. To this end, the firms concerned are invited to make direct contact with the relevant Chinese bodies by 15 February of the following year, in order to make their purchasing intentions known.

Article 4

1. Imports into the Community of textile products covered by this Agreement shall not be subject to the quantitative limits established in Annex III, 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 licence issued by the Chinese authorities, and to proof of origin in accordance with the provisions of Protocol A.

2. Where the Community authorities ascertain 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 Chinese 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.

3. Exports of cottage industry fabrics woven on hand- or foot-operated looms, garments or other made-up articles obtained manually from such fabrics and of traditional folklore handicraft products shall not be subject to quantitative limits, provided that these products meet the conditions laid down in Protocol B.

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

Provided that they are effected in accordance with the regulations on economic outward processing in force in the Community, these re-imports are

not subject to the quantitative limits set out in Annex III when they are subject to the specific arrangements laid down in Protocol E.

Article 5

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. Carry-over 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 China in the event of recourse to the provisions of paragraphs 1, 2 and 3 above.

Article 6

1. Exports of textile products not listed in Annex III to this Agreement may be made subject to quantitative limits by China 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 III originating in China exceeds, in relation to the preceding years total imports into the Community from all sources of products in that category, the following rates:

- 5 % for categories of products in Group II,

- 10 % 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 China before the date on which the request for consultations was submitted.

3. Pending a mutually satisfactory solution, China 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, paragraph 2, 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 paragraph 4 may in no case be lower than the level of imports of products in that category originating in China in 1988.

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

7. The annual growth rate for the quantitative limits introduced under this Article shall be determined in accordance with the provisions of Protocol D.

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

9. In the event of the provisions of paragraphs 2, 3 or 4 being applied, China 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.

10. Up to the date of communication of the statistics referred to in Article 15 paragraph 6, the provisions of paragraph 2 of this Article shall apply on the basis of the annual statistics previously communicated by the Community.

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

Article 7

1. China and the Community agree to cooperate fully in preventing the circumvention of this Agreement by transhipment, re-routing or whatever other means.

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 Chinese origin subject to quantitative limits established under this Agreement have been transhipped, re-routed 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, with a view to reaching agreement on an equivalent adjustment of the corresponding quantitative limits established under this Agreements.

3. Pending the result of the consultations referred to in paragraph 2, China 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 paragraph 2, 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 Chinese origin.

Article 8

1. China shall endeavour to ensure that exports of textile products covered by this Agreement are spaced out as evenly as possible over the year, due account being taken in particular of seasonal factors.

2. Should there be an excessive concentration of imports of any products belonging to a category subject to quantitative limits under this Agreement, the Community may request consultations in accordance with the procedure specified in Article 16 with a view to remedying this situation.

Article 9

In the event of denunciation of this Agreement as provided for in Article 20 paragraph 3, the quantitative limits established in Annex III shall be reduced on a pro rata basis.

Article 10

1. Portions of the quantitative limits established in Annex III not used in one region of the Community may be reallocated to another region in accordance with the procedures in force in the Community.

The Community undertakes to examine with care and reply within four weeks to any request made for reallocation by China. In the event of agreement on such reallocation, the flexibility provisions set out in Article 5 shall continue to be applicable to the levels of the original allocation.

2. After 1 June of each year of application of the Agreement, China 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 III, 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:

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

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

- 16 % in the third year of application of the Agreement.

The percentage in the fourth year of 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 2 are inadequate to cover those requirements, authorize the importation of amounts greater than those stipulated in Annex III.

Article 11

1. China undertakes to take such measures as are required to make possible the export of the minimum annual quantities laid down in Annex IV of the products listed in that Annex. The Parties will examine each year the possibilities of increasing these quantities in the light of the needs of Community industry and China's export possibilities.

2. In administering exports of the products referred to in paragraph 1, China undertakes to give favourable consideration, taking into account its export possibilities, to request from the Community textile industry with a view to meeting its needs.

For this purpose, the Community may submit to the Chinese authorities before the end of each year a list of interested manufacturers and processors and, if possible, the quantities of products requested by each of the firms in question.

3. The Contracting Parties are agreed that transactions in the products listed in Annex IV shall be carried out in accordance with Articles 8 and 9 of the Trade and Economic Cooperation Agreement taking account of market practice and normal trade flows.

III. Imports into China

Article 12

1. In return for the increased opportunities for the export of Chinese textile products to the Community, China shall encourage and facilitate the importation on its market of textile products originating in the Community listed in annexes I and II. To this end China will take such measures as are necessary to avoid exacerbating and if possible to reduce, during the period of application of the Agreement, the disequilibrium in its textile trade balance with the Community.

2. Where a need for additional supplies arises, and in particular a need leading to the diversification of imports of textile products into China, preference will be given to imports of products originating in the Community referred to in paragraph 1 and offered on terms meeting the conditions set out in Articles 8 and 9 of the Trade and Economic Cooperation Agreement.

Article 13

1. The two Parties agree to examine the trend of trade in textile products and garments each year, in the framework of the consultations provided for in Article 16 and on the basis of the statistics referred to in Article 15.

2. If the Community finds that the provisions of Article 12 paragraph 2 of this Agreement place it in an unfavourable position as compared with a third country, it may request

consultations with China in accordance with the procedure specified in Article 16 with a view to taking appropriate action consistent with the rights and obligations under the Trade and Economic Cooperation Agreement.

IV. Common provisions

Article 14

1. The classification of the products covered by this Agreement is based on the tariff and statistical nomenclature and on the Common Customs Tariff of the Community (hereinafter called the 'combined nomenclature', or in abbreviated form 'CN').

Any amendment to the combined nomenclature (CN) made in accordance with the procedures in force in the Community, concerning categories of products covered by this Agreement or any decision relating to the classification of goods shall not have the effect of reducing any quantitative limit introduced pursuant to this Agreement.

2. 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 by China and shall not have the effect of reducing any quantitative limit established in Annex III.

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

Article 15

1. China shall supply the Community with precise statistical information on all export licences issued for categories of textile products subject to the quantitative limits set out in Annex III, expressed in quantities and in terms of value and broken down by Member State of the Community, as well as on all certificates issued by the Chinese authorities for products referred to in Article 4 paragraph 3 and subject to the provisions of Protocol B.

2. The Community shall likewise transmit to the Chinese authorities precise statistical information on import authorizations or documents issued by the Community authorities and import statistics for products covered by the system referred to in Article 6 paragraph 2.

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

4. Upon request by the Community, China shall supply import statistics for all products covered by Annexes I

and II.

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 of this Agreement.

6. For the purpose of applying the provisions of Article 6, the Community undertakes to provide the Chinese 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.

Article 16

1. A Textile Committee (hereinafter referred to as the 'Committee') made up of representatives of the Contracting Parties shall be set up, its members being appointed by the Joint Committee provided for in Article 15 of the Trade and Economic Cooperation Agreement.

The Committee shall deal with matters raised for consultation under the terms of this Agreement, in accordance with the procedure set out in paragraph 2 below, and with any problem arising from the application of the Agreement.

2. The 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 on a mutually acceptable conclusion within one further month at the latest.

3. The Community may request consultations in accordance with paragraph 2 when it ascertains that during a particular year of application of the Agreement 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 III.

Article 17

The two Contracting Parties undertake to promote the exchange of visits by persons, groups and delegations from business, trade and industry, to facilitate contracts in the industrial, commercial and technical fields connected with trade in textile products and garments and to assist in the organization of fairs and exhibitions of mutual interest.

Article 18

Pending the entry into force in China of national legislation on intellectual property, the two Parties, at the request of either of them, shall hold consultations in accordance with the procedure laid down in Article 16 for the purpose of finding an equitable solution in any dispute relating to the protection of marks, designs or models of articles of apparel and textile products.

V. Final provisions

Article 19

As regards the Community, this Agreement shall apply to the territories in which the Treaty establishing the European Economic Community is applied under the conditions laid down in that Treaty.

Article 20

1. This Agreement shall enter into force on the first day of the month following the date of its signature. It shall be applicable until 31 December 1992.

2. This Agreement shall apply with effect from 1 January 1989.

3. Either Party may at any time propose modifications to this Agreement or denounce it, provided that at least six months' notice is given. In that event, the Agreement shall come to an end on the expiry of the period of notice.

4. The Annexes and Protocols to this Agreement and the Agreed Minutes and letters joined thereto, shall form an integral part thereof.

Article 21

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

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ANNEX I

LIST OF PRODUCTS REFERRED TO IN ARTICLE 1 (1)

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 hair, of cotton or of man-made fibres.

2. Garments which are not recognizable as being garments for men or boys or as being 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.

GROUP I A

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GROUP I B

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GROUP II A

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GROUP II B

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GROUP III A

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GROUP III B

ANNEX II

referred to in Article 2 (2)

GROUP IV

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GROUP V

ANNEX III

COMMUNITY AND REGIONAL QUANTITATIVE LIMITS

The allocation of Community limits among regions of the Community will be

communicated to China in accordance with the rules in force in the Community.

The product descriptions together with the relevant CN codes are reproduced in Annex I.

Each quantitative limit established for Germany in this Annex, with the exception of Categories 18, 23, 26, 67, 73, 76 and 83, contains a sub-ceiling amounting to 19 % of the quantitative limit in question for use exclusively at the Berlin Fair.

Community limits

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Regional Limits

ANNEX IV

referred to in Article 11 ASSURED PROVISION BY CHINA OF TEXTILE RAW MATERIALS

Minimum quantities which China undertakes to reserve for the Community each year:

Silk

Raw silk (CN code 5002 00 00):

3 000 tonnes

Waste silk (CN codes 5003 10 00 and 5003 90 00):

(1)

Fine animal hair

Angora (CN code 5102 10 10):

700 tonnes

Cashmere (CN code ex 5102 10 50):

500 tonnes

(1) China will accord favorable consideration to Community economic operators, within the limits of availability.

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