AGREEMENT between the European Economic Community and the People's Republic of China on trade in textile productsInitialled at Brussels on 9 December 1988THE COUNCIL OF THE EUROPEAN COMMUNITIES,of the one part, andTHE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINAof the other part,DESIRING to promote, with a view to permanent cooperation and in conditions providing every security for trade, the orderly and equitable development of trade in textile products between the European Economic Community (hereinafter referred to as 'the Community') and the People's Republic of China (hereinafter referred to as 'China'),RESOLVED to take the fullest possible account of the serious economic and social problems at present affecting the textile industry in both importing and exporting countries, and in particular, to eliminate real risks of market disruption on the market of the Community and real risks of disruption to the textile trade of China,HAVING REGARD to the Arrangement regarding International Trade in Textiles (hereinafter referred to as 'the Geneva Arrangement'), and in particular Article 4 thereof, and to the conditions set out in the Protocol extending the Arrangement,HAVING REGARD to the Trade and Economic Cooperation Agreement between the Community and China,HAVE DECIDED to conclude this Agreement and to this end have designated as their Plenipotentiaries:THE COUNCIL OF THE EUROPEAN COMMUNITIES:THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA:WHO HAVE AGREED AS FOLLOWS:I. General provisionsArticle 1The Parties recognize and confirm that without prejudice to the rights and obligations under the Trade and Economic Cooperation Agreement between the Community and China the conduct of their mutual trade in textile products shall be governed by the provisions of this Agreement.Article 21. Trade in textile products listed in Annex I and originating within the Contracting Parties shall be liberalizedfor the duration of this Agreement under the conditions set out therein.2. Trade in textile products listed in Annex II and originating within the Contracting Parties shall be covered by this Agreement solely for the purposes of application of the provisions making explicit reference to that Annex.3. Subject to the provisions of this Agreement, the Community undertakes, in respect of the products listed in Annex I, to suspend the application of quantitative import restrictions currently in force and not to introduce new quantitative restrictions under Article 3 of the Geneva Arrangement.4. Measures having equivalent effect to quantitative restrictions on the importation into the Community of the products listes in Annex I shall be prohibited.II. Arrangements for exports to the CommunityArticle 31. China agrees to establish and maintain for each calendar year quantitative limits on its exports to the Community in accordance with Annex III. Such exports shall be subject to a double-checking system specified in Protocol A.2. In administering the quantitative limits referred to in paragraph 1, China shall ensure that the Community textile industry shall benefit from utilization of the said limits.More particularly, as regards categories 2, 3 and 37 China undertakes to reserve, as a priority, 50 % of the quantitative limits concerned for industry users during one hundred and fifteen days beginning on 1 January of each year. For this purpose, contracts made with the industry during the period in question shall be taken into consideration.3. To facilitate the implementation of these provisions the Community shall provide the competent Chinese authorities, before the end of each year, with a list of interested manufacturers and processors and, if possible, of the quantity of products requested for each firm. To this end, the firms concerned are invited to make direct contact with the relevant Chinese bodies by 15 February of the following year, in order to make their purchasing intentions known.Article 41. Imports into the Community of textile products covered by this Agreement shall not be subject to the quantitative limits established in Annex III, provided that they are declared to be for re-export outside the Community in the same state or after processing, within the framework of the administrative system of control which exists within the Community.However, the release for home use of products imported under the conditions referred to above shall be subject to the production of an export licence issued by the Chinese authorities, and to proof of origin in accordance with the provisions of Protocol A.2. Where the Community authorities ascertain that imports of textile products have been set off against a quantitative limit established under this Agreement, but that the products have subsequently been re-exported outside the Community, the authorities concerned shall inform the Chinese authorities within four weeks of the quantities involved and authorize imports of identical quantities of the same products, which shall not be set off against the quantitative limit established under this Agreement for the current or the following year.3. Exports of cottage industry fabrics woven on hand- or foot-operated looms, garments or other made-up articles obtained manually from such fabrics and of traditional folklore handicraft products shall not be subject to quantitative limits, provided that these products meet the conditions laid