The Agreement on Textiles and Clothing

For most of the period after World War II, a special regime has existed for trade in textiles, outside the normal multilateral trade rules. During the Uruguay Round negotiations, however, the GATT contracting parties agreed to integrate textile products into the GATT/WTO system. The means by which this integration would occur was the Agreement on Textiles and Clothing (“ATC”), which provides for the gradual integration of these products into normal GATT/WTO rules, to be completed by January 1, 2005.

Simon Lester is the President of WorldTradeLaw.net LLC, which runs an on-line subscription service on WTO disputes (http://www.worldtradelaw.net). Mr. Lester previously worked as a Legal Affairs Officer in the WTO’s Appellate Body Secretariat.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Subscribe and save

Springer+ Basic €32.70 /Month

Buy Now

Price includes VAT (France)

eBook EUR 416.23 Price includes VAT (France)

Hardcover Book EUR 527.49 Price includes VAT (France)

Tax calculation will be finalised at checkout

Purchases are for personal use only

Preview

Similar content being viewed by others

Exploring the Trade in Textiles and Clothing Between India and Pakistan

Chapter © 2017

Rivalry for Textiles: A Global Market

Chapter © 2015

Weaving a Global Trade Pattern: The Portuguese Role in the Globalisation on Asian Textiles, 1500–1800

Chapter © 2021

References

  1. For example, the key vote in the U.S. House of Representatives in late 2001 in favor of the bill granting the President Trade Promotion Authority was cast by a Congressman from South Carolina in exchange for important concessions on textiles. See, e.g., Joseph Kahn, Price of Bush’s Trade Powers? Protectionism, New York Times, December 8, 2001. The textile industry in the United States tends to be concentrated in certain regions, and consequently has a great deal of influence over politicians in these regions. According to the American Textile Manufacturers Institute, in 2001 there were over 300,000 textile employees in the states of North Carolina, South Carolina, Georgia and Alabama out of 443,000 employees in the U.S. overall. See Quick Facts about U.S. Textiles, available at , visited April 12, 2002.
  2. A number of Contracting Parties refused to apply the GATT to Japan even after it had joined the GATT, based on the non-application provision, Article XXXV. John H. Jackson , World Trade and the Law of Gatt 101–102 (1969). This refusal was based in large part on their concern about competition from Japanese textiles. Google Scholar
  3. Arrangement Regarding International Trade in Cotton Textiles, July 21, 1961, 12 U.S.T. 1675, T.I.A.S. No. 4884. Google Scholar
  4. Long-Term Arrangement Regarding International Trade in Cotton Textiles, February 9, 1962, 13 U.S.T. 2673, T.I.A.S. No. 5240. Google Scholar
  5. See Henry R. Zheng, Defining Relationships and Resolving Conflicts Between Interrelated Multinational Trade Agreements: The Experience of the MFA and the GATT, 25 Stan. J. Int’l Law 45, 55–56 (1988). Google Scholar
  6. Arrangement Regarding International Trade in Textiles, TEX.NG/1, BISD, 21st Supp. 3 (1975). Google Scholar
  7. Brenda Jacobs, Renewal and Expansion of the Multifiber Arrangement, 19 L. Pol. Int’l Bus. 9 (1987); see also, The Gatt Uruguay Round: A Negotiating History (1986–1992) 261–277 (Terence P. Stewart ed. 1993). Google Scholar
  8. Draft Protocol Extending the Arrangement Regarding International Trade in Textiles, GATT Doc. No. COM.TEX/W/47 (Dec. 14, 1977); Protocol Extending the Arrangement Regarding International Trade in Textiles, GATT Doc. No. L/5726 (Dec. 23, 1981); Protocol Extending the Arrangement Regarding International Trade in Textiles, GATT Doc. No. L/6030 (Aug. 7, 1986). See Jacobs, supra note 10, at 9. Google Scholar
  9. Presumably, the “derogations” were from GATT Article XI, which provides for the general elimination of quantitative restrictions, and GATT Article XIX, which governs the use of safeguard measures. See Jacobs, supra, Brenda Jacobs, Renewal and Expansion of the Multifiber Arrangement, 19 L. Pol. Int’l Bus. (1987) note 10, at 9; Stewart, supra note 10, at 265; Zheng, supra note 7, at 69. It is important to note, however, that not all members of the MFA were GATT Contracting Parties, and not all GATT Contracting Parties had signed on to the MFA. China, for example, was a member of the MFA but was not a GATT contracting party after the 1950 withdrawal by the Nationalist Government. Google Scholar
  10. See Stewart, supra note 10, at 260. Google Scholar
  11. Id., at 268. Japan and Switzerland were not relying on the MFA to impose restrictions. However, these two countries imposed restrictions on imports through other measures. Id., at 274. In addition, textile and clothing exports have been subject to a number of restrictions, outside the context of the MFA, by developing countries. Id., at 275–277. Google Scholar
  12. See Marcelo Raffaelli and Tripti Jenkins, the Drafting History of the Agreement on Textiles And Clothing (1995); Stewart, supra note 10, at 259–380. Google Scholar
  13. Ministerial Declaration on the Uruguay Round, MIN.DEC, September 20, 1986. Google Scholar
  14. See Raffaelli and Jenkins , supra note 18, at 19; see also Communication from Pakistan, MTN.GNG/NG4/W/10 (February 15, 1988). Google Scholar
  15. Raffaeli and Jenkins , supra note 18, at 57. Google Scholar
  16. Id. at 62–65. Google Scholar
  17. Id. at 37–39, 73–74. Google Scholar
  18. Id. at 65–66. Google Scholar
  19. Id. at 57, 66–68, 108–109. Google Scholar
  20. Id. at 39. Google Scholar
  21. Id. at 67–68. Google Scholar
  22. Communication from the European Community, MTN.GNG/NG4/W/47 (May 14, 1990). Google Scholar
  23. Raffaeli and Jenkins , supra note 18, at 70. Google Scholar
  24. Communication from the European Community, MTN.GNG/NG4/W/12 (May 24, 1988); see also Communication from the European Community, MTN.GNG/NG4/W/24 (July 20, 1989). Google Scholar
  25. Comprehensive Report of the Textiles Monitoring Body to the Council for Trade in Goods on the Implementation of the Agreement on Textiles and Clothing During the First Stage of the Integration Process, G/L/179, 31 July 1997 (“1997 Report”). Google Scholar
  26. Id., ¶¶ 183–189. Google Scholar
  27. The meaning of Article 2.4 was elaborated by the panel in Turkey—Textiles. There, the panel interpreted Article 2.4 to mean that, in addition to a prohibition on restrictions that are entirely new, existing restrictions that have been notifiedmay not be “increased.” The panel then noted thatTurkey did not have any restrictions in place at the time of the entry into force of theATC. Accordingly, it said, any restrictions on textiles and clothing applied by Turkey would be “new,” as defined in Article 2.4. Report of the WTO Panel, Turkey—Restrictions on Imports of Textile and Clothing Products, WT/DS34/R (1999) (“Turkey—Textiles”) ¶¶ 9.70–9.81. Google Scholar
  28. 1997 Report, ¶228. Google Scholar
  29. See 1997 Report, ¶¶ 14, 28; Comprehensive Report of the Textiles Monitoring Body to the Council for Trade in Goods on the Implementation of the Agreement on Textiles and Clothing During the Second Stage of the Integration Process, G/L/459, 31 July 2001 (“2001 Report”) ¶¶ 47–56, 79–91. Not all of the Phase 3 integration plans had been notified. Id. at ¶ 86. Google Scholar
  30. The 1997 Report noted that 55 Members had notified that they wished to retain the right to use the provisions of Article 6, whereas nine Members notified that they did not wish to retain the right to use the provisions of Article 6. The 1997 Report also observed that a significant number of Members had not submitted a notification under this provision, despite the requirement in Article 6.1 to do so. Subsequent to the issuance of the 1997 Report, two additional Members notified that they did not wish to retain the right to use Article 6, and three notified that they did wish to retain this right. In January of 2002, China, which became a WTO Member in December of 2001, reserved its right to take transitional safeguard actions. See China to Reserve ‘Transitional Safeguard’ Right on Textiles, Xinhua News Service, January 22, 2002. Google Scholar
  31. 1997 Report, ¶ 85; 2001 Report, ¶ 119, 123. Google Scholar
  32. Report of the WTO Panel, United States—Restrictions on Imports of Cotton and Man-made Fibre Underwear, WT/DS24/R (1996) (“U.S.—Underwear, panel”) and Report of the Appellate Body, United States—Restrictions on Imports of Cotton and Man-made Fibre Underwear, WT/DS24/AB/R (1997) (“U.S.—Underwear, Appellate Body”); Report of the WTO Panel, United States—Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/R (1997) (“U.S.—Shirts and Blouses, panel”) and Report of the Appellate Body, United States—Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R (1997) (“U.S.—Shirts and Blouses, Appellate Body”); Report of the WTO Panel, United States—Transitional Safeguard Measure on Combed Cotton Yarn from Pakistan, WT/DS192/R (2001) (“U.S.—Cotton Yarn, panel”) and Report of the Appellate Body, United States—Transitional Safeguard Measure on Combed Cotton Yarn from Pakistan, WT/DS192/AB/R (2001) (“U.S.—Cotton Yarn, Appellate Body”). These cases are discussed in Subsections 2 and 3 below and in Part V of this chapter. In a fourth case, the United States decided to remove the restraint, and the complainant requested the termination of the panel proceedings. United States—Measures Affecting Imports of Women’s and Girl’s Wool Coats, Complaint by India, WT/DS32. Google Scholar
  33. 1997 Report, ¶ 172. Google Scholar
  34. 2001 Report, ¶¶ 238–239. Google Scholar
  35. U.S.—Underwear, Appellate Body, supra note 41, page 14. Google Scholar
  36. U.S.—Underwear, panel, supra note 41, ¶ 7.45. Google Scholar
  37. U.S.—Shirts and Blouses, panel, supra note 41, ¶ 7.51–7.52. Google Scholar
  38. U.S.—Cotton Yarn, panel, supra note 41, ¶ 7.121. Google Scholar
  39. Id., ¶¶ 7.137–141. Google Scholar
  40. U.S.—Underwear, panel, supra note 41, ¶ 7.46. Google Scholar
  41. U.S.—Shirts and Blouses, panel, supra note 41, ¶ 7.49–7.50. Google Scholar
  42. U.S.—Underwear, panel, supra note 41, ¶ 7.48–7.51. Google Scholar
  43. U.S.—Cotton Yarn, panel, supra note 41, ¶. 7.123. Google Scholar
  44. U.S.—Cotton Yarn, Appellate Body, supra note 41, ¶¶ 121–124. Google Scholar
  45. Id., ¶¶ 125–126. Google Scholar
  46. U.S.—Underwear, panel, supra note 41, ¶¶ 7.73–7.74. Google Scholar
  47. U.S.—Shirts and Blouses, panel, supra note 41, ¶ 7.57. Google Scholar
  48. Statement Circulated by the International Textiles and Clothing Bureau, WT/MIN(01)/ST/27, November 10, 2001. This would not have been possible had the Agreement required immediate integration of all products not under MFA restraint. See Part III above. Google Scholar
  49. U.S.—Underwear, panel, supra note 41, ¶¶ 7.9–7.12. Google Scholar
  50. Id., 7.13 (emphasis added). This standard of review has been confirmed and elaborated in the context of the Safeguards Agreement, e.g., in U.S.—Lamb Safeguards. See Report of the Appellate Body, United States-Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177,178/AB/R (2001). Google Scholar
  51. U.S.—Shirts and Blouses, panel, supra note 41, ¶ 7.16. Google Scholar
  52. U.S.—Shirts and Blouses, panel, supra note 41, ¶ 7.12. Google Scholar
  53. U.S.—Shirts and Blouses, Appellate Body, supra note 41, pp. 15–16. This ruling rejected the reasoning of the panel in U.S.—Underwear, which considered Article 6 to constitute an exception to the broad prohibition in Article 2.4, so that the burden of proof was on the country invoking the exception (i.e., in that case, the United States). U.S.—Underwear, panel, supra note 41, ¶ 7.15–7.16. Google Scholar
  54. U.S.—Underwear, panel, supra note 41, ¶ 7.26–7.27. Google Scholar
  55. U.S.—Shirts and Blouses, panel, supra note 41, ¶ 7.21. Google Scholar
  56. U.S.—Cotton Yarn, panel, supra note 41, ¶¶ 7.28–7.32. Google Scholar
  57. U.S.—Cotton Yarn, Appellate Body, supra note 41, ¶¶ 62–80. Google Scholar
  58. U.S.—Shirts and Blouses, panel, supra note 41, ¶¶ 7.18–7.20. Google Scholar
  59. Turkey-Textiles, panel, supra note 34, ¶¶ 9.14–9.16. Google Scholar
  60. Report of the Appellate Body, Guatemala–Antidumping Investigation Regarding Portland Cement from Mexico, WT/DS60/AB/R (1998). Google Scholar
  61. Turkey—Textiles, panel, supra note 41, ¶¶ 9.82–9.83. Google Scholar
  62. ITCB, Agreement on Textiles and Clothing: Evaluation of Implementation, August 3, 1999 (available at , visited February 21, 2002).
  63. Agency for International Trade Information and Cooperation, The World Trade Organization Agreement on Textiles and Clothing (ATC), June 1999. Google Scholar
  64. Statement Circulated by the International Textiles and Clothing Bureau, WT/MIN(01)/ST/27, November 10, 2001. Google Scholar
  65. See John Whalley, Note on Textiles and Apparel in the Next Trade Round, Conference on Developing Countries in the Next WTO Trade Round, held at Harvard University, November 5/6, 1999. Google Scholar
  66. Section 334, Uruguay Round Agreements Act, Pub. L. 103–465, 108 Stat. 4809 (1994); 19 CFR §102.21. Google Scholar
  67. 19 CFR §102.21; see Agreement on Textiles and Clothing: Evaluation of Implementation, supra note 75. Google Scholar
  68. Id. Google Scholar
  69. See Request for Consultations, United States—Measures Affecting Textiles and Apparel Products, WT/DS85/1, G/RO/D/1, G/TBT/D/13 (June 3, 1997); Request for Consultations, United States—Measures Affecting Textiles and Apparel Products (II), WT/DS151, G/TMB/N/341, G/RO/D/3, G/TBT/D/19, G/L/279 (November 25, 1998); see also Franklin Dehousse, Katelyne Ghemar, Philippe Vincent, The EU-US Dispute Concerning the New American Rules of Origin for Textile Products, 36 J. WORLD TRADE 67 (2002). Google Scholar
  70. Request for Consultations, United States—Rules of Origin for Textiles and Apparel Products, WT/DS243/1, G/L/507, G/RO/D/4 (January 22, 2002). Google Scholar
  71. Id. Google Scholar
  72. Id. Google Scholar
  73. Report of the Panel (not appealed), United States—Rules of Origin for Textiles and Apparel Products, WT/DS243/R (2003). Google Scholar
  74. See Textiles Remain Tough Issue at WTO, Pakistan Takes Hardline, Inside U.S. Trade , November 12, 2001. Google Scholar
  75. See Decision on Implementation-Related Issues and Concerns, Point 4, WT/MIN(01)/W/10, 14 November 2001; see also, BRIDGES Monthly Review , Vol. 5, No. 9, November/December 2001, p. 8. Google Scholar
  76. See ITCB Urges Adoption of Doha Proposals on Textiles, at http://www.itcb.org/Documents/ITCBMI31.pdf (visited September 9, 2002).
  77. Trade Policy Review for the United States, Report by the Secretariat, WT/TPR/S/99, August 15, 2001, p. 87. Google Scholar
  78. An EC anti-dumping duty on cotton-type bed linen was successfully challenged in a WTO dispute. See Report of the Appellate Body, European Communities—Anti-Dumping Duties on Imports Of Cotton-Type Bed Linen from India, WT/DS141/AB/R (2001). Google Scholar
  79. Note, however, that the full effects of the impact of Chinese textile exports might not be felt until several years after the ATC expires. As part of China’s WTO accession, a special system of safeguards was established for Chinese textile exports, with effect until December 31, 2008. See Report of the Working Party on the Accession of China, WT/ACC/CHN/49 (1 October 2001), ¶¶ 241–242. In September, 2002, the American Textile Manufacturers Institute filed a petition with the U.S. government asking for new quotas on knit fabric, bras, gloves, nightwear and textile luggage to be imposed under this special system. In response, China warned the U.S. against imposing new restrictions on textile imports when the present quotas end in 2005, saying such measures would undermine Beijing’s co-operation in the new round of global trade talks. See Richard McGregor, China Warns US Over Quotas on Textiles, Financial Times , November 23, 2002. Google Scholar
  1. Simon Lester