GENERAL AGREEMENT ON c m m L

TEX.SB/1326* TARIFFS AND TRADE 30 APm 1987

Textiles Surveillance Body

ARRANGEMENT REGARDING INTERNATIONAL TRADE IN TEXTILES

Notification under Article 3:8 and paragraph 8 of the 1986 Protocol of Extension

Action by the United States with respect to imports from Pakistan

Note by the Chairman

Attached is a notification received from the United States of its intention to invoke paragraph 8 of the 1986 Protocol of Extension with* respect to imports of Category 613-C (lightweight, plainweave polyester/ cotton fabric) from Pakistan. The extension of the measure for a one-year period took effect on 27 April 1987.

The unilateral measure taken under Article 3:5 and contained in TEX.SB/1237 was not reviewed by the TSB as Pakistan had not at that time accepted the 1986 Protocol of Extension.

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87-0616

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yx ANSWERED

Î W W EC 8TATE8 TRADE REPRESEI TATlVk f

J—\ 1-3 AVENUE DE LA PAIX 'V"" ..".~ 1202 GENEVA, SWITZERLAND ( i i / h ^ i i

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1 Apri l 23 , 1987

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The Honorable Ambassador Marcelo Raffaelli Chairman, Textiles Surveillance Body GATT Rue De Lausanne 154 1211 Geneva

Dear Ambassador Raffaelli:

The Government Textiles Surve the Government of the existin polyester/cott paragraph 8 of the United Sta Textiles Surve 8 of the 1986 this product, this decision D.C.

of the United States has the honor to inform the illance Body of the absence of agreement between s of the United States and Pakistan on extension g restraint level for lightweight, plainweave on fabric (Category 613-C) in accordance with Article 3 of the Arrangement. The Government of

tes, therefore, has the honor to inform the illance Body of its intention to invoke paragraph Protocol of Extension with respect to imports of The Government of Pakistan is being notified of through the Embassy of Pakistan in Washington,

In a letter dated April 3, 1987, in accordance with paragraph 8 of Article 3 of the Arrangement, the Government of the United States proposed extending the existing restraint level for Category 613-C for an additional year, with six percent growth, i.e. at a level of 14,892,869 square yards. At that time, the Government of the United States also informed the Government of Pakistan that the United States would be pleased to hold additional consultations on this matter at mutually convenient time. On April 20, 1987 the Embassy of Pakistan in Washington, D.C. informed the Government of the United States that the Government of Pakistan had not yet taken a decision on extension of the existing restraint level. In the absence of agreement on extension of the restraint level the Government of the United States is notifying the Government of Pakistan of its intent to invoke paragraph 8 of the 1986 Protocol. The Government of the United States also reaffirms its willingness

The Honorable Ambassador Marcelo Raffaelli April 23, 1987 Page Two

to hold additional consultations on this matter, with a view to reaching a negotiated solution.

Sincerely,

RiUxsf s. sfopkuifajf Robert E. Shepherd Minister-Counsellor

Attachment

(COMPLIMENTARY OPENING)

I EAVE TES HONOR TO REFER TO THE ARRANGEANT REGARDING INTERNATIONAL TRADE IN TEXTILES, DONE AT GENEVA ON DECIMEES 7.1, 1973 AND EXTENDED BY PROTOCOLS DONE AT ' GENEVA ON ÎECEM3ER 14, 1977, DECEMBER 22, 1931 AND JULY 31, 1966, HEREINAFTER REFERRED TO AS TEE ARRANGEMENT. I ALSO HAVE THE HONOR TO REFEP TO CONSULTATIONS HELD ON FEBRUARY 25. 1987 IN WASHINGTON D.C. BETVSSN REPRESENTATIVES Of THE GOVERNMENTS CF PAKISTAN AND TFS UNITEr STATES.

I ALSO HAVE THE HONOR TO REFER TO TEE LETTER DATED APRIL 3, 1937, IN WHICH THE GOVERNMENT OF ""HE UNITED SPATES INFOEMEE THE GOVERNMENT OF PAKISTAN CF ITS DESIRE TO EXTEND THE EXISTING RESTRAINT LEVEL FOP LIOFT^SIGHT, PLAINWEAVE POLYESTER/COTTON FABRIC (CATEGORY 513-C) 70° AN ADDITIONAL YEAR AT A LEVEL CF 14,692,559 SQUARE YAFD3, WHICH REPRESENTS SIT PERCENT GRCVTH CVEP TEE PREVIOUS RESTRAINT. AT TEAT TI^E, THE GOVERNMENT 0? THE UNITEr STATES NCTED TEA* IT «AS MAKING THIS PROPOSAL IN ORDER TO ENSURE THE STEADY AMD ORDERLY DEVELOPMENT OF T^ADE A^D TC AVOID THE DISRUPTIVE EFFECTS OF A SUDDEN INCREASE IN

IMPCETS. IN ACCORDANCE rflTF. PARAGRAPH 6 OT ARTICLE 3 CF THE ARRANGEMENT, TEE GGVE-N'MENT CF T'r'E "KITED STATES REC'ESTED CONFIRMATION THAT EXTENSION OF T?iS RESTRAINT tAS ACCEPTABLE TO TEE GOVERNMENT OF PAilSTAN.

ON AFRIL 22. "927 TEE EMBASSY OF PAKISTAN IN YASnl'-'C-TON, D.C. INFORMED TF* DEPARTMENT CF STATE THAT TE* GOVERNMENT OF PAKISTAN FAS NOT TET DFCIDFD V'HETDEE OF NOT TO AGREE TO TE~ UNITED STATES' PROPOSAL TO EXTVND THIS RESTRAINT. INASMUCH AS TEE EXISTING RESTRAINT L~VEL V'lLL ErpiRE ON APRIL 26, 19=7 AND TEE GOVERNMENT CF PAKISTAN FAS NOT TAKEN A DECISION TC AGREE TC AN EXTENSION OF TRIS RESTRAINT, TEE GCVERNMFNT OF TEE UMTEP STATES FAS THL' ECNCF TC INFORM THE GCV~RNMFNT OF PAKISTAN OF ITS INTENT TO INVOKE PARAGRAPH ê OF *̂ HE 19c5 F~OTOCOL OF EXTENSION OF THE ARRANGEMENT. THIS ACTION IS BEING TAKEN TO ENSURE TEF STEADY AND 0RDER1Y DEVELOPMENT OF TRADE AND TO AVOID THE EXACEPBAT1CN OF MAFK~T DISRUPTION V'HICE WOULD OCCUF AS A RESULT CF AN IMMINENT ANT MEASURABLE INCREASE IN IMPORTS CF THIS PRODUCT FRO* PAKISTAN UPON EXPIRATION CF TEE EXISTING RESTRAINT. APPROXIMATELY 22 MILLION SyUAFE YAFDS OF THIS PRODUCT IRC PAKISTAN ARE CHRFENTLY IN EMBARGO IN THE UNITED STATES. AS A RESULT, IE THE UNITED STATES VERS TO RELY ON THE PROCEDURES OF ANNEX B CI TEE ARRANGEMENT, TEF RESULTING LEVEL OF FESTRAINT WOULD EF AFPEO*IMATELv Zl*. PERCENT ABOVE THE EXISTING RESTRAINT

LEVEL. THIS SUDDEN INCREASE IN IMPORTS VCULD CERTAINLY FURTHER EXACERBATE THE SITUATION OF MARKET DISRUPTION • VF I CE EXISTS IN THE UNITED STAGES' MARKET FOR THIS PRODUCT.

f

IN ACCORDANCE, TFEREFCRE, WIT? TEE PROVISIONS OF PARAGRAPH 6 OF THE 1996 PFOTOCCL, TES RESTRAINT FOE CATEGORY 613-C WILL 3E ETTENEEE FO* AK AEDITIO^AL ^EAR VITE SIX FERCENT GORV'TP. THE EXTENSION OF THE FESTRAINT VILL TAKE EFFECT ON APRIL 27, 1987 AND WILL BE AT A LEVEL CF 14,892,969 SOUAPZ YARDS. BECAUSE OF THE AMOUNT OF TKI3 PBCEUCT CURRENTLY IN EMBARGO AWAITING ENTRY INTO TEE COMMERCE CF TKS UNITEE STATES, THE GOVERNMENT CF THE' UNITED STATES HAS EEC IEEE TO STAGE ENTPT OF THF EMBARGOED GCCES OVER A PERIOD CF FIVF MONTHS.

A EETAILEE FACTUAL STATEMENT OF THE REASONS ANE JUSTIFICATIONS FOE THIS ACTION, WITH CURRENT SUPPORTING LATA, IS APPENDED AS AMNST A, WHICH IS TO 3? REGARDE! AS AN INTEGRAL PART CF THIS NOTE.

AS TEE GOVERNMENT 01 TEE UNITED STATES INFORMED TE2 GOVERNMENT OF PAKISTAN IN ITS LETTER 0? APRIL 3, 1937,

TES GOVERNMENT OF THE UNITEE STATES WOULD BR PLEASED TC HOLE AEEITIONAL CONSULTATIONS ON THIS MATTER, WITH A VIT-.' i'OWARB REACHING A NEGOTIATES SOLUTION, AT A TIME WHICH MUTUALLY CONVENIENT. (COMPLIMENTARY CLOSE)

PAS I STAN LIGHTWEIGHT, PLAIWEAVE

POLYESTER/COTTON FA3RIC

SUMMARY AND CONCLUSIONS

U.S. GEMSPAL IMPORTS CF CATEGORY 613 PT. — LIGHTWEIGHT, PLAINWEAVE POLYESTER/COTTON FAERIC — FROM PAKISTAN WERE 93.4 MILLICN SQUARE TARES IN 1935, A 10 F^LE INCREASE OVER THE 9.4 MILLION SCUARE YARDS IMPORTED A YEAR EARLIER. IMPORTS OF THES? FA3PICS FP^M PAKISTAN DUPING TEE YEAR ENDING FEBRUARY 1967 'sERE 8 4.5 MILLION SO'JAPS YARDS, A 4 FOLD INCREASE OVER TEE 19 MILLION StUARE YARDS EMPORTEE LURING THE SAME PERICE A YEAP EARLIER. PAKISTAN :IS TEE LARGEST SUPPLIER OF TEESE FABRICS, ACCOUNTING FOI

42 PERCENT OF THE TOTAL IMPORTS.

THE SUESTANTIAL AMOUNT OF IMPORTS FROM PAKISTAN WAITING TO ENTER THE COMMERCE OF THE U.S. WOULD EXACEREATS THE DISRUPTION WHICH EXISTS IN THE U.S. MARKET FCR THESE TVPS FA3RICS. CF THIS AMOUNT, APPROXIMATELY 21.5 MILLICN SOUARE YAPES OF THESE FABRICS A»? CURRENTLY IN EMBARGO ANE HAVE NCT YET ENTFRTD THE COMMERCE 07 THE UMITEE STATES. UPON EXPIPATION OF THE EXISTING RESTRAINT THIS AMOUNT 'rfOUIE CAUSE AN IMMINENT ANE *EASUR.A3LE INCREASE IN IMPORTS ENTERED INTO THE COMMERCE CF TEE UNITED STATES.

U.S. MARKET

THE U . S . LIGHTWEIGHT, PLAINVCiVE POLYESTER/COTTON FAERIC MARKET IS ADVERSELY AFFECTED 3Y IMPORTS. THE U . S . PRODUCER'S SHARE 0? THE MARKET FCR DOMESTICALLY PPOEVCSD AND IMPORTED CATEGORY 613PT. IN 19SÔ VAS 22 PERCENT COMPAREE WI"H 34 PERCENT IN 1^95 AND tzn PE^CE^'T ! " 1 9 9 A .

MAFKST STATEMENT CATEGORY 613 PT. -APRIL 1987

i

U.S. PRODUCTION

U.S. PRCtUCTION OF LIGHTWEIGHT, PLAIM<*EA*2 POLYESTER/COTTON FABRIC DECLINED FRCM £6.8 MILLION SCU#RE Y*BES IN 1984 TO 57.2 MILLION IN 1936, \ DECREASE OF 35. PERCFNT. THESE PRODUCTION TATA ARE AVAILA3LS CNL^ CM A BUSINESS CONFIDENTIAL BASIS.

U.S. IMPORTS AND IMPORT PENZTRATICH

TOTAL U.S. IMPORTS OF TEES7 FABRICS MO*i! THAN DAU3LEZ, INCREASING FROM 68.5 MILLION SOTTASE TABDS IN 1564 TO 204.5 MILLION IN 1956 (THESF IMPORTS INCLUDE THE AMOUNT FRCM PAKISTAN CURRENTLY IN SMR^GO). TOTAL I^PO'TS FOR THE YEAF FNDING FS5RUAFY 136? INCREASED 42 PERCENT FRCM

TEE LEVEL CF IMPORTS REACFEr IN THE CCV?ARA3LE PERIOD A YEAR EARLIER. TEE PATIO OF IMPORTS TC DOMESTIC

( POIUCTICN INCREASED FROM 122 PERCENT IN 1994 TO 35= PERCENT IN 1965.

IMPOPT VALUES VS DOMESTIC F'ODUCKF'S PRICE

t??RCXIMATELY F7 PERCENT CF CATEGORY 533 PT. — LIC-^TVEIGHT, PLAIN'-FA.VE FOLvESTE'/COîTCN FA3PIC ~ FFCM PAKISTAN ENTER UNDER TSUSA NO. 3^8.5246, FOÎ YE STiR/C CTTTN

PFINTCLCTE NOT OVER 5 07. PER SQUARE VA*D. THESE IMPORTS ENTER AT DUTY-PAID LANDED VAL:TÏS 3ELCV T^T U.S. PRODUCEFS' PRICES FOR COMPARABLE FAERIC.

TABLE I

IMPORTS AND IMPORT/PRODUCTION PANICS LIGETïEIC-HT, FLAINXEM'S POLYESTFR/CCTTCN

FABRIC ( 1 , 2 2 ? SOUAPE YARDS )

PRODUCTION I / P PATIO

1964 e e . 5 7 8 6 6 , 7 7 1 . 9 9 . e

1965 115 ,807 5 3 , 7 4 6 1 9 7 . 1

1985 2 ? 4 , 4 7 5 5 7 , 1 7 2 3 5 7 . 6

INCLUDES TSUSA NUMBERS 3 3 6 , 5 2 3 9 , 3 3 S . 5 2 4 2 , 3 * 6 . 5 2 4 3 , 3 3 5 . 5 0 4 7 , 3 3 8 . 5 2 4 8 , 3 3 6 . 5 2 5 3 , ? 3 5 . 5 0 5 4 , 3 3 9 . 5 2 5 8 , 3 3 8 . 5 2 5 9 .

U . S . PRODUCTION, CATEGORY 613 PT.

FERICD IMPORTS

WNtfas&^gfer---.-. i-. •

TABLE II

•v-" U.S. LIGPTYEIGHT. PLAINVVJTE POLYESTER/COTTON — FABRIC MARÏFT

(1,33? SOTTAPE YAPPS) ^

TOTAL APPAFENT PERCENT U.S. 613 PT. DOMESTIC U.S. MARKET

PSRIOE PRODUCTION IMPORTS 1/ MARiET 2/ SHARE

1964

i9es

i9es

ee,77i

59,746

57,172

ee,57e

115,8*7

2*4,313

177,349

174,553

251,495

53.3

33.7

21.9

1/ INCLUDES TSUSA NUMBERS 339,5339, 333.5342, 339.5343, 338.5347, 339.5348, 336.5353, 339.5354, 33e.525c, -"36.5059.

2/ MARKET FOR DOMESTICALLY PRODUCED ».ND IMPORTED SI3 PT. FABRIC.

TABLE III

IMPORTS FROM PAKISTAN AND TOTAL 1 / CATEGORY 513 PT. - LIGHTV^IGHT, PLAINWEA7E

PCLYESTSF/CCTTON FA3RIC ( 1 , 3 3 3 SCÎIARE YARES)

PERIOD PAKISTAN' • OTHER TC'AL

1964 73 63,539 - £3,579

'1965 9.415 136,392 11*.327

9=6 93,439 114,235 234,475 4 YEAR ENLIN5 FSBPUARY

1965 19,235 112 ,234 1 3 1 , 2 ? 9

1937 33 ,453 135 ,939 136 ,439

1 / INCLUDES TSUSA \ ,T:v:E^5 3 3 5 , 5 * 5 9 , 3 3 3 . 5 3 4 2 , 3 3 5 . 5 3 4 3 , 333.5-247, 333 .5F4S , 3 3 ? . 5 3 5 3 , 3 ^ 3 . 5 2 5 * , 3 3 3 . 5 * 5 5 . 3 3 3 . 5 3 5 9 .

— TA3LE IV EUTY-PAID 7ALUE3 AN! U . S . PRODUCER PP.ICE

CATEGORY 513PT. - LIGKT*EIGFT. PLAIMWEAVE POLVESTiR/CCTTON FA3PIC

TSUSA NC. AND SOURCE VALUE/PRICE

336 .5246

PAKISTAN .25 U . S . PRCrUCE? PPÎCE . 4 * - .4?