WORLD TRADE G/TMB/10
17January 1997
ORGANIZATION(97-0160)
Textiles Monitoring Body
TWENTY-FOURTH MEETING OFTHE TMB
Note bytheChairman
1. TheTextiles Monitoring Body meton13to15January 1997.
2. TheTMB authorized itsChairman toprovide WTO Members withthefollowing information.
Korea/Ecuador: notification under Article 8.6oftheAgreement onTextiles andClothing (ATC)
3. TheTMB considered anotification, dated 22November 1996, received fromKorea requesting
theTMB toconduct, pursuant toparagraph 6ofArticle 8oftheATC, anexamination oftransitional
safeguard measures introduced byEcuador, referring totheprovisions oftheATC, onimports ofseveral
textiles andclothing products from Korea andHong Kong. Thenotification hadbeenreceived by
theTMB afterthenotice convening thetwenty-second TMB meeting (25to26November 1996) had
beenissued. TheTMB decided, therefore, toconduct theexamination atitstwenty-third meeting on
17to19December 1996, andtoinvite representatives ofEcuador andthetwoWTO Members affected
bythemeasures tothisexamination.
4. Inacommunication of27November 1996 addressed totheTMB, Ecuador stated that“a
temporary safeguard measure wasadopted bytheprevious Government onthelastdayofits
administration, thatis,on9August 1996. Thepresent Government, which took office on
10August 1996, could decide, ifnecessary, toimplement theprovisions oftheAgreement inconnection
withtheadoption ofmeasures forthissector ”.Theofficial document attached tothecommunication
referred totheATC which “establishes thatanyMember Country mayapply atransitional safeguard
when aproduct isbeing imported intoitsterritory insuchincreased quantities astocause serious
damage, oractual threat thereof, tothedomestic industry ”.Italsomade reference totheprioropinion
oftheCustoms Technical Committee “infavour oftheadoption oftransitional safeguard measures
asprovided forinArticle 6oftheATC”andtothereport ofanInter-ministerial Commission
recommending “theestablishment ofasafeguard inaccordance withparagraph 11ofArticle 6ofthe
ATC”.
5. Inasubsequent notification, dated 10December 1996, Korea requested theTMB thatthe
examination ofitsnotification bepostponed untilFebruary 1997, reflecting theviewwhich hadbeen
expressed byEcuador thatmore timewasnecessary foranadequate examination ofthecase. Both
Ecuador andHong Kong were informed ofthisrequest.
6. TheTMB atitstwenty-third meeting discussed these developments. Itwasconcerned that,
contrary totherequirements ofparagraph 11ofArticle 6,itwasnotinaposition toreview thisissue
despite thefactthatthemeasures hadbeeninplace foralmost fivemonths. Ittherefore decided to
invite representatives ofEcuador, Korea andHong Kong toitsnextmeeting (13to15January 1997),
when itintended toconsider thismatter.
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Page2
7. Atthismeeting, therepresentative ofKorea stated thatthetransitional safeguard measures
introduced byEcuador violated many oftheprovisions oftheATC. IntheviewofKorea, thishad
been acknowledged byEcuador inbilateral consultations which hadtaken place between thetwo
Members, during which Ecuador hadcommitted itselftowithdraw themeasures on9February 1997.
8. Therepresentative ofHong Kong referred toastatement made byHong Kong atthemeeting
oftheCouncil forTrade inGoods on29November 1996, andtoalettersentbyHong Kong toEcuador
requesting information onthenature andscope ofthemeasures, including theWTO provisions on
thebasis ofwhich theyhadbeentaken.
9. TherepresentativeofEcuadorstatedthatthesemeasures,introducedon9August1996,consisted
ofadditional tariffduties tobeapplied against imports ofcertain textile andclothing products imported
from, interalia,twoWTO Members. IntheviewofEcuador, since Article 6oftheATC provided
fortheintroduction oftransitional safeguard measures intheform ofquantitative restrictions, the
measures introduced byEcuador could not,andhadnot,beentaken under theprovisions oftheATC,
butunder other WTO provisions. Furthermore, themeasures would lapse on9February 1997.
10. Intaking noteofthesestatements, andoftheinformation provided byEcuador, theTMB noted
thattheaction taken wasnotconsistent withtheprovisions ofArticle 6oftheATC, bothbecause of
theprice-based nature ofthemeasures themselves, andbecause theprocedural andsubstantive
requirements contained inArticle 6oftheATC were notmet. TheTMB observed thatArticle 6
provides,interalia,thatthoughaMembercanintroducequantitativerestrictions“theMemberproposing
totakesafeguard action shallseekconsultations withtheMember orMembers which would beaffected
bysuchaction”,andthat,in“highlyunusualandcriticalcircumstances,wheredelaywouldcausedamage
which would bedifficult torepair, action […]maybetaken provisionally onthecondition thatthe
request forconsultations andnotification totheTMB shallbeeffected within nomorethanfiveworking
daysaftertaking theaction ”.
11. TheTMB registered itsconcern that:
(a) Ecuador hadadopted thisaction on9August 1996 invoking Article 6oftheATC,
buthadnotinformed theTMB ortheaffected Members ofthisaction until
27November 1996;
(b) Consultations hadnottaken place untilKorea, having noticed thatthemeasures were
being applied, raised theissue intheCouncil forTrade inGoods andtheTMB;
(c) Ecuador didnotinform theTMB that,initsview, themeasures didnotconstitute
measures taken pursuant toArticle 6oftheATC untilthismeeting.
12. TheTMB, while bearing inmind thestatement byEcuador thatthese measures hadnotbeen
taken under theprovisions oftheATC, noted thatsuchmeasures hadbeeninforceforsome fivemonths
andwould remain applicable until9February 1997withpossible effects ontradebetween theMembers
concerned, andexpected thatEcuador would takethenecessary stepstodisinvoke Article 6oftheATC
withrespect tothesemeasures, andcomply withthelegalandprocedural requirements under theWTO.
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13. Thetwenty-fifth meeting oftheTMB isscheduled for3and4February 1997.
14. Thefullreport ofthetwenty-fourth meeting willbecirculated atalaterstage.