WORLD TRADE
ORGANIZATIONG/TMB/R/77
25 June 2001
(01-3129)
Textiles Monitoring Body
REPORT OF THE SEVENTY-EIGHTH MEETING
1. The Textiles Monitoring Body held its seventy-eighth meeting on 28 and 29 May 2001.
2. Mr. Bernabe appointed Mrs. Kaewta Booncharoen (Thailand) as his alternate.
3. Present at this meeting were the following members, alternates and observer:
Mr. Bernabe/Mrs. Booncharoen; Messrs. Fox-Drummond Gough/Rosas; Kalu; Karapinar; Kumar;
Lee; Moriya; Moroz; Nayyar; Richards; Tagliani.
4. The TMB adopted the report of its seventy-seventh meeting (G/TMB/R/76).
Notifications under Articles 2.8(b) and 2.11 of the ATC
5. The TMB reviewed, under Article 2.21, the notification made pursuant to Articles 2.8(b) and
2.11 by Canada (G/TMB/N/370 and Corrs. 1 to 6).  It  noted that, in accordance with Article 2.8(b),
the volume of imports to be integrated amounted to  18.16 per cent of the total volume of imports into
Canada in 1990 of the products falling under the coverage of the Agreement.  Products from each of
the four groups, referred to in Article 2.8(b), would be integrated, representing the following
percentages of the volume of imports in 1990 in Canada: tops and yarns (5.51 per cent), fabrics
(1.05 per cent), made-up textile products (7.77 per cent) and clothing (3.83 per cent).  The TMB noted
that Canada would integrate products from 10 Canadian categories, 16 sub-categories, as well as eightproducts not attributed by Canada to a specific category.  The TMB further noted that, out of these,
3 categories and 2 sub-categories, with respect to which Canada maintained restrictions under
Article 2.1 of the ATC, would be integrated in fu ll and that, therefore, restrictions affecting such
categories or sub-categories would be eliminat ed.  In a number of other cases, however, such
categories were part of merged categories and/or sub-categories subject to restraint.  In these cases the
restrictions would only be partially eliminated, affecting overall 20 WTO Members, since the non-
integrated parts of the merged categories and/or sub-categories would remain under restraint.  Inaddition, products from seventeen other categories or sub-categories would be integrated for which
restrictions would be only partially eliminated, affecting overall 27 WTO Members.  With respect to
the HS lines in the notification which correspond to products described in the Annex of the ATC as
"ex" positions of HS 6-digit lines, Canada, having made, after observations made by the TMB in this
regard, an extensive review of the data available and having consequently modified the list of theproducts to be integrated, confirmed that the trade attributed to such HS lines corresponded precisely
to the product description as contained in the Annex to the ATC.  Similarly, with respect to several
other HS lines marked in the integration programme  for the third stage as an "ex" position of the
respective HS 10-digit line, the TMB took note of Canada's statement that it would be only integrating
that portion of the respective lines related to overalls, as indicated, and that the relevant import datahad been estimated to reflect the volume of imports corresponding to the products integrated.  With
respect to the fact that one HS line at the 10-digit level included in the notification for Stage 3 seemed
to have been already included in Canada's integration programme for Stage 1, the TMB took note of
Canada's statement that the products under the relevant tariff line were being integrated by Canada in
two phases (i.e. in Stage 1 and Stage 3), and that only the trade corresponding precisely to the productintegrated in each Stage under the relevant HS 10-digit line had been counted.  As regards a
discrepancy which had been observed by the TMB between the trade data submitted by Canada at theG/TMB/R/77
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time of the negotiation of the WTO Agreement and the data submitted by Canada for the purpose of
integrating products under Articles 2.7 and 2.8 of the ATC, Canada, having made an extensive review
of the data, withdrew from the list products that were covered by the ATC, and from the total volume
of imports in 1990 of those products, several 10-digit tariff lines, and made adjustments to the volume
of trade covered by one additional 10-digit tariff line.  Since these products were part of Canada'ssecond stage of integration, and in order to maintain the level of integration previously achieved for
each of the three stages in volume terms, Canada de cided (i) to transfer products from the first to the
second stage, (ii) to transfer products scheduled to be integrated for the third stage to the second stage
and (iii) to add products not yet integrated to the list of products to be integrated for the third stage on
1 January 2002.  With respect to the transfer of products from the first to the second stage, the TMB
took note of the statement by Canada that this transfer was not strictly required to reach the minimum
threshold of 17 per cent stipulated under the ATC for the second stage and that Canada had chosen totransfer this volume because of its approach of ma intaining the levels of integration that Canada had
notified during each of the three stages (i.e. 16.35 per cent for the first stage, 18.70 per cent for the
second stage and 18.16 per cent for the third stage), as opposed to simply reaching the required
minimum threshold in each stage.  The TMB also took note of the statement by Canada that when a
product or a category that was representing only part of a restrained category, merged category orsubcategory would be integrated, the level for the respective remaining restraints (category, merged
category or subcategory) would not be reduced to reflect the removal of these products from the
restriction.
6. The TMB reviewed, under Article 2.21, the notifications made, pursuant to Articles 2.8(b)
and 2.11 by Peru (G/TMB/N/368 and Adds. 1 and 2).  The TMB noted that, in accordance withArticle 2.8(b) the volume of the products integrated by Peru amounted to 18 per cent of 1990 imports
of the products falling under the coverage of the Agreement.  In this respect, the TMB took note of the
statement by Peru that the total volume of Peru's textile imports in 1990 had been revised downwards
as compared to the level mentioned in Peru's first stage integration programme
1, "because the initial
calculation, effected in 1995, included some tariff headings corresponding to certain primarycommodities which fall outside the scope of the Agreement on Textiles and Clothing", and that "it
was therefore necessary to recalculate the share of each tariff item in the total volume of imports".
The TMB also noted that, in accordance with Article 2.8(b), the products integrated included products
from each of the four groups: tops and yarns, fabrics, made-up textile products and clothing.
7. The TMB started its review, under Article 2.21, of the notifications made pursuant to
Articles 2.8(b) and 2.11 by Cyprus, Mexico and Po land.  It decided to seek clarification from
(i)  Cyprus as to whether the programme notified met the requirements of Article 2.8(b) in terms ofthe percentage of Cyprus' 1990 imports of the products in the Annex to the ATC to be integrated,
(ii)  Mexico as to whether, in respect of products  belonging to HS lines in the Annex to the ATC for
which only part of the respective line falls under the coverage of the Agreement ("ex-HS lines"), the
imports that had been counted corresponded precisel y to the product description contained in the ATC
Annex for the respective line, as well as information on the manner in which Mexico had ensured thatthis was the case, and (iii)  Poland as to whether one of the products included in the integration
programme had already been integrated in Stage 1.
Preparation for the TMB’s 2001 Comprehensive Report Pursuant to Article 8.11 of the ATC
8. The TMB started its consideration of certain portions of its draft comprehensive report
pursuant to Article 8.11.  In that context it reverted to its consideration of the responses received fromseveral Members to the request for notifications and information sent to WTO Members
2 and
considered further the responses provided in reply to questions and comments it had sought from
                                                     
1 See G/TMB/N/85.
2 See G/TMB/24.G/TMB/R/77
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certain Members.  Furthermore, it decided to put additional questions and invited comments from
several Members with respect to some of the elements contained in the responses received.
Observations with Respect to Late Notifications
9. With respect to notifications addressed to the TMB after the relevant deadlines, the TMB
reiterated that its taking note of late notifications was without prejudice to the legal status of suchnotifications.
Dates of the Next TMB meeting
10. The TMB decided to reschedule its next meeting, previously scheduled for 11 to 15 June 2001,
to 18, 19 and 21 June 2001.
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