Textile-specific safeguard rules announced

KARACHI (May 31 2003) : The Committee for the Implementation of Textile Agreements (CITA) has announced the final rules for employing the textile specific safeguard provision contained in China's World Trade Organisation (WTO) accession protocol.

The China accession protocol allows the US and other WTO member countries, which believe that the imports of Chinese textile and apparel products are disrupting the market, to request consultations with China and, if necessary, to impose quotas.

The final rules differ only slightly from the draft that was circulated in April.

The rules for imposing textile-specific safeguards envisage that after receiving a petition, the CITA has 15 days to decide whether the request meets minimum requirements. The receipt of a petition will not be made public.

The rules provide that a petition must contain a full product description, extensive import data for the last five full calendar years and quarterly data for the most recent year.

For a petition, to be accepted by the CITA, these data should demonstrate that the imports of Chinese origin textile and apparel products are increasing rapidly in absolute terms.

The petition also needs to contain data on the US domestic production of like or directly competitive products, including annual data for the last five full calendar years and quarterly data for the most recent year.

The CITA will protect any information in the petition that is market “business confidential” from disclosure to the full extent permitted by law.

However, if the confidential information is provided as part of the safeguard request, the petitioner must also provide a non-confidential version.

In this version, the confidential information is summarised or, if necessary, deleted. This non-confidential version will be made available to the public.

The rules provide that should the CITA accept the petition, it will publish a Federal Register notice to that effect, and request for public comment.

The CITA may also initiate a safeguard action on its own, but this would also be announced in the Federal Register with a request for public comments.

Comments would have to be received within 30 calendar days after the publication of the Federal Register notice, more than the 15-day period proposed in the original draft.

This extension was added primarily because the major US apparel importers and retailers felt that the 15-day comment period would have been insufficient to counter the arguments advanced by the petitioners.

Subsequently, the CITA has up to 60 calendar days to decide whether to request consultations with China. Should the CITA decide to request consultation, it will announce its decision in the Federal Register.

The new quota will come into force on the publication date of this Federal Register notice.

The rules provides that consultation with China will be held within 30 days of the receipt of the request for consultations and could be extended to 90 days for receipt of the request for consultations.

China would immediately have to hold its shipments in the categories at issue to a level of 7.5 percent above the imports entered over the past 12-month period, ending two months before the consultation request was made.

In the case of wool products, the quota is six percent above that recent import level.

The rules provides that should the US and China fail to resolve the issue in these consultations, the quota would become “permanent”.

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