Ref. : CR EIC 230/2/1/1/1 13 September 2005
Dear Sirs,
Commercial Information Circular No. 372/2005
Notice to Exporters: Series 2 (EU) No. 19/2005
European Union (EU)1 : Establishment of Transitional Flexibility Measures on the EU/Mainland Memorandum of Understanding (MOU)
The EU and the Mainland have reached an agreement to unblock the textiles imports from the Mainland sitting on the EU ports due to rapid exhaustion of quotas previously agreed by the EU/Mainland in June 2005. This circular informs traders of the agreed arrangements.
Details
The problem of stranded textiles shipments has surfaced shortly after signing of the EU/Mainland Memorandum of Understanding (MOU) on 10 June 2005 to limit the export of certain Chinese textiles and clothing (T&C) products into the EU. This is because quotas for most of the 10 categories of restrained items have been filled or exceeded the agreed quota limits2 . To resolve the blockage problem, the two sides reached an agreement on 5 September 2005, which has subsequently been endorsed by the EU Member States. Accordingly, import licences will be issued to release the blocked goods as soon as the EU Regulation comes into force on 14 September 2005.
The European Commission (EC) has issued a notice with the following implementation arrangements as agreed with the Mainland on 5 September.
Each party will be responsible for the quantities of goods that have beenlicensed by that party. The EU will release the goods in accordance with the licences issued by both parties.
The EU will be responsible for all the quantities of textiles goods shipped between 11 June and 12 July 2005 for which it has issued import licences to enter the EU without limitations.
For goods shipped between 13 July and 19 July 2005 that have exceeded the agreed quota levels, the Mainland will bear half of excess quantities through (i) carrying forward 2006 quotas3 and (ii) transferring yardage from category 24 . The EU will be responsible for the other half through unilateral increase of the agreed import levels.
2,073 tons out of the total yardage transferred from category 2 will be reserved for EU to transfer into other categories where necessary.
The deadline for application of import licences for goods shipped from the Mainland before 20 July has been extended till 20 September 2005. No further export licences will be issued by the Mainland for product categories for which the agreed quota levels have been exceeded2 as of the date of the Agreed Minutes on 5 September 2005.
The EU will issue import licence for goods shipped from 20 July 2005 onwards upon presentation of valid export licence issued by the Mainland.
Where total imports from the Mainland by 31 December 2005 is lower than the 2005 adjusted quota levels, the remaining quantities can be carried cover and added to the quota levels in 2006, on top of other general flexibility provisions in (h) below.
During the validity of the MOU, subject to the EC? confirmation, the Mainland can exercise the flexibility provisions allowing 5% of advance use, 7% of carry over, and transfer between garment categories up to 4% and between textile categories by the same extent5.
Outward Processing Trade (OPT) arrangement will be introduced to provide special treatment for goods sent out from the EU to Mainland for processing in accordance with the existing EC rules.
The EU/Mainland Agreed Minutes of 5 September 2005 and the notice published by the EC on 12 September 2005 are respectively accessible from the EU website as follows:
http://trade-info.cec.eu.int/doclib/html/124580.htm and
http://trade-info.cec.eu.int/doclib/html/124646.htm
Enquiries
For enquiries concerning the content of this circular, please contact the undersigned at 2398 5427.
Yours faithfully,
pp (Miss Jenny TSANG)
for Director-General of Trade and Industry
1. The EU includes Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden and the United Kingdom.
2. As at 5 September, the quota levels for 7 of the 10 categories have already been exceeded, viz., Cat. 4 (T-shirts), 5 (pullovers), 6 (men's trousers), 7 (blouses), 26 (dresses), 31 (brassieres), and 115 (flax or ramie yarn).
3. For categories 6 (men's trousers) and 31 (brassieres), 9,149,000 pieces and 5,810,000 pieces respectively will be carried forward from 2006 agreed levels into 2005 to clear all pending textiles shipments. For category 5 (pullovers), up to 5% of 2006 agreed levels (i.e. 9,985,000 pieces) will be transferred into 2005 to clear part of the pending goods.
