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Cablegate: Wto Demarche Request - U.S./Ec Textiles, Apparel,

VZCZCXYZ0042
RR RUEHWEB

DE RUEHC #7603 0771526
ZNR UUUUU ZZH
R 171521Z MAR 08
FM SECSTATE WASHDC
TO AMEMBASSY PRETORIA 0000

UNCLAS STATE 027603

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ETRD WTRO ECON SF
SUBJECT: WTO DEMARCHE REQUEST - U.S./EC TEXTILES, APPAREL,
FOOTWEAR, AND TRAVEL GOODS PROPOSAL

REF: A. SCHEIBE-NEULING EMAIL 3/13

B. 07 STATE 57995 AND PREVIOUS

1. This is an action request. See paragraph 2.

2. Action Request: In coordination with European Commission
representation, Post is requested to approach host government
at the Econ Counselor or other appropriate level and seek
co-sponsorship of a joint U.S./ European Communities (EC)
proposal on non-tariff barriers (NTBs) to textiles, apparel,
footwear, and travel goods (TAFT) at the WTO. If practical
problems arise in organizing this demarche with Commission
representation in a timely manner, Posts may deliver it
separately. In this case, Posts should ask the Commission
for reporting from any meetings they have with host
governments. Washington has jointly drafted and cleared this
demarche with Brussels. We therefore expect that the
Commission will be delivering the same message to host
governments.

3. The full text of the joint U.S./EC TAFT proposal has been
emailed to Post and may be left with host government
officials. Background on specific provisions within the
joint text for Post's use as needed may be found in paragraph
6 below.

4. In discussions with host governments, Posts should draw
on the following key points:

USG/EC Objectives:

-- The United States and EC are seeking formal, public
co-sponsorship of the negotiating text.

-- As action addressee government's Geneva WTO delegation has
expressed much interest in the U.S./EC proposal (and previous
separate U.S. and EC proposals on the same issue) over the
last two years, the United States and EC would like to invite
these governments to join as co-sponsors.

-- Co-sponsoring this text will enable the facilitation of
trade in textiles with a simple and streamlined process,
including certain parameters and recommendations of what can
and cannot be required on labels, while preserving Members'
ability to achieve certain legitimate objectives as outlined
in Article 2 of the WTO Agreement on Technical Barriers to
Trade.

-- This proposal would also fulfill a mandate in the Doha
Declaration asking WTO Members to address non-tariff barriers
that are of interest to developing countries.

-- The textile and clothing sector is particularly important
for developing countries. For many, it is the most important
industrial sector, in terms of exports (and therefore as
source of foreign income) and in terms of employment.

-- Should host governments indicate they are unable to
co-sponsor, Washington agencies are interested in learning of
any problems or concerns host governments may have with the
negotiating text.

What the negotiating text does:

-- The text covers textiles, apparel (or clothing), and
footwear, as well as travel goods, which U.S. industry had
asked for specifically.

-- The text would streamline labeling requirements on a
global scale, provide flexibility for exporters if labeling
requirements are changed mid-shipment, and lower costs for
suppliers while passing savings onto consumers.

-- The text does not propose establishing new labeling
requirements per se, but seeks to simplify labeling and
facilitate trade by setting parameters and recommendations on
what information Members can and cannot require on labels.

USG/EC Efforts to Advance the Text:

-- U.S. and EC delegations held a number of meetings with WTO
Members in 2006 and 2007 in Geneva, and learned there is
interest among a number of countries, developed and
developing, to continue exploring an agreement in this area.

-- As these products are heavily traded by developing
countries, developing countries have shown increasing
interest in the U.S. and EC proposal, and have increasingly
intervened on the subject.

End points.

Background on the TAFT Proposal

5. On October 26, 2007, the United States and the European
Communities (EC) jointly tabled in the WTO Negotiating Group
on Market Access a negotiating text on reducing non-tariff
barriers to trade related to labeling of textiles, apparel,
footwear, and travel goods. The United States first
indicated its interest in negotiating NTBs affecting
textiles, apparel, footwear, and travel goods at the WTO in
November 2004, and formally submitted its negotiating text on
Textiles, Apparel, Footwear and Travel Goods Labeling
Requirements in May 2006. Intensive negotiations continued
thereafter on the U.S. proposal, along with an EC negotiating
proposal submitted in April 2006. In April 2007, the EC
submitted a legal draft negotiating text, which was followed
by WTO Members' comments and calls for a merged U.S./EC
negotiating text. The United States and EC have had numerous
discussions with trading partners at the WTO and meetings
with capital-based officials concerning this issue.
Textiles, apparel, footwear, and travel goods are products of
importance to a range of countries, both developed and
developing. In this regard, a significant number of WTO
Members have an economic stake in the U.S./EC proposal. We
are now seeking formal, public co-sponsorship of the joint
U.S./EC negotiating text from action addressee host
governments. The full text of this proposal has been emailed
to Post.

6. Background on Paragraphs of Negotiating Text

Title
Many Members had questioned the relationship between a new
agreement and the existing TBT Agreement. To address those
concerns, we re-formulated the text as an "understanding"
that will be an agreed interpretation of the TBT Agreement,
rather than as a stand-alone agreement. This approach is not
new: Members adopted six Understandings of the GATT 1994 as a
result of the Uruguay Round. The new title of the
negotiating text is: "Understanding on the Interpretation of
the Agreement on Technical Barriers to Trade With Respect to
the Labeling of Textiles, Clothing, Footwear, and Travel
Goods." The "Understanding" sets out how the TBT Agreement
disciplines will apply in the context of the products
contained or referenced in the Annex to the Understanding.

Paragraph 2
In the revised text, we clearly identify the types of
required information on labels that are to be considered not
more trade-restrictive than necessary to fulfill a legitimate
objective within the meaning of Article 2.2 of the TBT
Agreement.

The text does not preclude Members from requiring other types
of information to be placed on labels, such as information to
support stated legitimate objectives including protection of
human health or safety. However, the Article 2.2 obligations
would still apply to those requirements, just as they do now.
Thus, for all other types of information, there is no change
in their legal status under the TBT Agreement.

Footnote 1
We include a footnote providing that the presumption covers
technical regulations that use relevant international
standards, or the relevant parts of such standards, as a
basis. It is our understanding that this should be an easy
obligation to fulfill, as ISO and ASTM developed the two
standards currently in use, both of which are international
standards.

Paragraph 3
We propose that Members give positive consideration to not
requiring information on permanent labels other than the
types of information we specifically mention.

Paragraph 4
In addition, we provide an illustrative list of technical
regulations that would be considered more trade-restrictive
than necessary to fulfill a legitimate objective within the
meaning of Article 2.2 of the TBT Agreement.

Examples include: prohibiting information on labels from
being in more than one language; requiring labels to be
pre-approved, registered or certified; specifying
requirements that a label be of one or more materials; and
prohibiting labels from containing information that is not
required by the Member, such as brand names. For this last
category, we clarify that the information we are talking
about is information related to the product or the marketing
of the product - brand name being the most obvious example.
Of course, Members are free to prohibit information that is
false, deceptive, or misleading.

Paragraphs 5
The text also enhances the notification provisions provided
by the TBT Agreement for the specific products covered:

- Members must notify to the WTO ANY proposed technical
regulation or conformity assessment procedure related to
labeling for the covered merchandise. Current rules provide
that Members only need to notify if a relevant international
standard does not exist or the technical content of the
proposed technical regulation or conformity assessment
procedure is not in accordance with the technical content of
a relevant international standard, AND if the technical
regulation may have a significant effect on trade;

- Members shall publish the actual proposed technical
regulation or conformity assessment procedure, rather than
simply a notice that the Member proposes to introduce a
measure with a subsequent commitment to provide Members a
copy of the proposed measure upon request;

- Members shall identify up front the parts of the proposed
measure that in substance deviate from relevant international
standards, rather than providing such information
subsequently upon request;

- Members shall allow at least 60 days for other Members to
submit comments and shall provide favorable consideration to
reasonable requests to extend the comment period, rather than
simply providing "reasonable time" for comments;

- Members shall publish or otherwise make available to the
public, either in print or electronically, their responses to
significant comments they receives from other Members no
later than the date they publish the final technical
regulation or conformity assessment procedure; and

- Members must allow all interested persons, not just
Members, to participate in the discussions on comments as
well. Currently Members have no obligation to allow
interested persons to submit comments in writing, though in
practice of course this often happens.

- The language in paragraph 6 emulates that in TBT Agreement
Articles 2.10 and 5.7.

Paragraph 7
With respect to institutional arrangements, the Committee on
Technical Barriers to Trade shall review the operation and
implementation of the Understanding on an annual basis. The
Understanding also contains language providing that the
Committee will review other developments in technical
regulations and conformity assessment procedures involving
international trade in textiles, clothing, footwear, and
travel goods of importance to Members.

End background

6. Please slug responses for USTR (BNorton, JWeiss) and
Commerce (EBrzytwa). State POC for this demarche is Aaron
Scheibe in the Economic, Energy, and Business Affairs
Bureau's Office of Multilateral Trade. Mr. Scheibe may be
contacted at (202) 647-8202 or scheibeap@state.gov.
RICE

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