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UNCLAS STATE 057995 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD ECON WTRO
SUBJECT: DEMARCHE ON U.S. WTO TAFT PROPOSAL 
 
REF: STATE 20817 
 
¶1.  This is an action request.  See paragraph 3. 
 
¶2.  The U.S. is seeking, in the context of the WTO Doha Round 
negotiations, to reduce non-tariff barriers related to 
textiles, apparel, footwear, and travel goods labeling. 
Textiles, apparel, footwear, and travel goods are products of 
importance to a range of countries, both developed and 
developing.  On May 15, 2006, the United States tabled a 
negotiating text on reducing non-tariff barriers to trade 
related to labeling of textiles, apparel, footwear, and 
travel goods in the WTO Negotiating Group on Market Access. 
The United States has held several subsequent discussions on 
the text and has listened to the views of many Members.  In 
order to facilitate further discussion and promote 
understanding of the negotiating text, the United States 
circulated questions to interested Members.  Several Members 
have submitted answers to those questions with the hope that 
other Members will find them helpful in preparing their own 
answers and gain from an increased understanding of various 
labeling requirements.  The EC has tabled a comparable 
negotiating text, although it contains some important 
differences.  There is a fair degree of support in principle 
for the two proposals by both developed and developing 
countries, and the United States and the EC are exploring 
ways to merge the two proposals.  The United States seeks 
co-sponsorship of the U.S. negotiating text from action 
addressee host governments. 
 
¶3.  Action Request and Key Points:  A U.S. delegation will be 
in Geneva May 7-11 discussing the U.S. proposal.  Post is 
requested to approach host government and seek co-sponsorship 
of this proposal prior to May 7.  In discussions with host 
governments, Washington suggests that posts draw on the 
following key background points: 
 
What does the U.S. negotiating text do? 
-- The U.S. negotiating text was formally submitted to the 
WTO Negotiating Group on Market Access in May 2006 and 
focuses on labeling of textiles, apparel, footwear, and 
travel goods; all-important sectors in global trade, 
including exports from developing countries. 
-- The U.S. proposal 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 U.S. text does not propose establishing new labeling 
requirements per se, but seeks to facilitate trade by setting 
limits on what information Members can require on permanent 
labels and markings. 
-- Our proposal would also help to address the mandate in WTO 
negotiations focused on non-tariff barriers that are of 
interest to developing countries. 
 
What have we done to advance our text? 
-- U.S. 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. proposal, and have increasingly 
intervened on the subject. 
-- The United States previously circulated questions to 
interested Members to facilitate further discussion and 
promote understanding of the negotiating text (reftel). 
-- The United States, EC, and Canada have formally submitted 
answers to those questions, while New Zealand, Turkey, and 
Japan have submitted draft answers. 
-- We hope Members will find these answers helpful in 
preparing their own answers and gain an increased 
understanding of various labeling requirements. 
 
What do we want from countries? 
-- The U.S. is seeking formal co-sponsorship for the U.S. 
negotiating text on labeling of textiles, apparel, footwear, 
and travel goods. 
-- Given the interest action addressee government's Geneva 
WTO delegation have expressed in the U.S. proposal over the 
last year, the United States would like to invite these 
governments to join as a co-sponsor. 
-- Co-sponsoring the U.S. text will facilitate trade in 
textiles with a simple and streamlined process, including 
outer limits of what can be required on permanent labels. 
-- The U.S. proposal lacks the controversial aspects included 
in the EC's proposal, and also encompasses travel goods. 
(The EC text does not explicitly state travel goods coverage; 
however, it does reference the Annex to the former WTO 
Agreement on Textiles and Clothing, which includes textile 
travel goods.) 
-- Should host governments indicate they are unable to 
co-sponsor, we are interested in learning of any problems or 
concerns they may have with the U.S. negotiating text. 
-- Should host governments ask about other Members' 
co-sponsorship of proposal, so far one key developing country 
(Sri Lanka) has indicated that it will co-sponsor the U.S. 
negotiating text.  We are expecting other co-sponsors. 
 
How is the EC's text different from ours? 
-- The EC has a somewhat similar negotiating text, although 
it contains some important differences and proposes some 
controversial commitments including, but not limited to, the 
following: 
(1) States that the EC text's provisions shall prevail over 
the WTO Agreement on Technical Barriers to Trade (TBT) 
relating to the same subject matter; also contains other 
problematic articles that appear to duplicate TBT provisions, 
which could serve to confuse future implementation; 
(2) References only International Standards Organization 
(ISO) standards, although the TBT Agreement provision on 
international standards is not limited to ISO standards; the 
TBT Agreement also does not prohibit Members from developing 
their own domestic standards consistent with WTO rules; 
(3) Does not clearly define relationship with the WTO TBT 
Committee or with the WTO Dispute Settlement Understanding. 
-- Many Members have called for a joint U.S.-EC text.  We are 
currently exploring ways to merge the two proposals. 
 
¶4.  If needed, the full text of the United States' 
negotiating proposal on Reducing Non-Tariff Barriers to Trade 
Related to Labeling of Textiles, Apparel, Footwear and Travel 
Goods is as follows.  After the U.S. negotiating text, the 
U.S. questions and answers are provided for further 
background. 
 
(Begin U.S. Negotiating Text) 
 
As affirmed in Annex B, Paragraph 26, of the Hong Kong 
Ministerial Text, non-tariff barriers (NTBs) are an integral 
and important part of the non-agricultural market access 
(NAMA) negotiations.  Consistent with paragraph 22 of the 
Ministerial Declaration, the United States now respectfully 
submits to WTO Members this draft negotiating text on 
reducing barriers to trade in textiles, apparel, footwear, 
and travel goods. 
 
The United States first indicated its interest in negotiating 
NTBs affecting textiles, apparel, footwear, and travel goods 
in its revised indicative list, tabled in November 2004 
(TN/MA/W46/Add.8/Rev.1).  On 1 December 2005, the United 
States circulated a concept paper to Members advocating more 
common approaches to labeling as a way to benefit exporters 
and consumers of textiles, apparel, and footwear across the 
globe (TN/MA/W/18/Add.12).  In March of 2006, the United 
States also circulated an industry-drafted non-paper 
describing specific labeling problems and proposed targeted 
solutions.   The United States has expanded coverage to 
include travel goods, based on subsequent conversations with 
industry and trading partners. 
 
Textiles, apparel, footwear, and travel goods are products of 
importance to a range of countries, both developed and 
developing.  The United States sees this text as a positive 
way for Members to reduce the diversity of labeling 
approaches in these areas, in order to save manufacturers 
time (i.e., to avoid delays to market) and money (i.e., to 
minimize costs of varying labeling schemes).  The aim is to 
preserve the ability of regulators to require certain 
information to be provided on such goods in order to inform 
and protect consumers, while minimizing the costs of 
providing this information; such savings would then be passed 
on to consumers. 
 
The United States looks forward to continued discussions with 
Members on this draft negotiating text and on eliminating 
non-tariff barriers to trade in textiles, apparel, footwear, 
and travel goods.  The United States is committed to an open 
and transparent process and is open to suggestions for 
improvement or additions to the draft negotiating text. 
 
Agreement on Reducing Non-Tariff Barriers to Trade Related to 
Labeling of Textiles, Apparel, Footwear and Travel Goods 
-------------------------------------------- 
 
Members, 
 
Recalling that pursuant to paragraph 16 of the Doha 
Ministerial Declaration, Members agreed to negotiations aimed 
at reducing or as appropriate eliminating tariffs and 
non-tariff barriers on non-agricultural products; 
 
Recognizing the important contribution of the textile, 
apparel, footwear, and travel goods sectors to global 
economic growth and development; 
 
Noting that textiles, apparel, footwear, and travel goods 
suppliers and producers in exporting Members may require 
regulatory flexibility to adjust to new labeling requirements 
and the subsequent commercial conditions, especially in the 
event that entry into force of such requirements is sudden; 
 
Reaffirming that under the Agreement on Technical Barriers to 
Trade, Members shall ensure that technical regulations and 
conformity assessment procedures are not prepared, adopted or 
applied with a view to or with the effect of creating 
unnecessary obstacles to international trade, and allow a 
reasonable interval between the publication of technical 
regulations and conformity assessment procedures and their 
entry into force, among other obligations; 
 
Desiring to promote cooperative and effective approaches to 
enhance trade in textiles, apparel, footwear, and travel 
goods; 
 
Agree as follows: 
¶1. a. Members shall not require information on permanent 
labels or marking beyond: 
i. country of origin, fiber content, care instructions, and 
information necessary for consumer safety, with respect to 
textile and apparel goods; and 
ii. country of origin with respect to footwear and travel 
goods. 
 
b. Members shall ensure that, at their discretion, 
manufacturers may provide additional information on permanent 
labels or markings with respect to all such goods. 
 
c. Members remain free to require that reasonable additional 
information of use to consumers be provided on goods or 
packaging through non-permanent means, including, for 
example, information regarding (their) material content (for 
footwear and travel goods). 
 
¶2. Upon entry into force of technical regulations and 
conformity assessment procedures, Members should afford 
sympathetic consideration to requests for flexibility to 
adapt to modifications of labelling requirements, allowing 
for both old labels and new labels to be accepted during the 
transition period. 
 
(End U.S. Negotiating Text) 
 
¶5.  The U.S. questions and answers in regards to the U.S. 
proposal on textiles, apparel, footwear, and travel goods, 
referred to in paragraph 2 of the cable, are as follows. 
 
(Begin text of U.S. Questions and Answers) 
 
What information do you require on permanent labels or 
markings on imported and domestic textile, apparel, footwear, 
and travel (TAFT) goods? 
 
U.S. ANSWER:  If the goods are imported into the USA, then 
the Tariff Act (administered by U.S. Customs) requires 
foreign origin marking to be permanently attached as the 
nature of the article will permit to most imported products. 
According to the Care Labeling Rule, administered by the 
Federal Trade Commission (FTC), clothing made primarily of 
textiles must have permanent care instructions.  Socks and 
other hosiery products, and garments that are totally 
reversible without pockets, do not need permanent care 
instructions. 
 
Do you require importer or dealer/distributor information on 
permanent labels or markings? 
 
U.S. ANSWER:  Such information (the RN number or business 
name) does not have to be permanent, but it should be 
attached in some "secure" manner if the goods are subject to 
the Textile, Wool, or Fur Acts.    (Note:  The RN number 
refers to Registered Identification Number.) 
 
Are manufacturers allowed to provide additional information 
on permanent labels or markings with respect to imported and 
domestic TAFT goods? 
 
U.S. ANSWER:  The FTC and U.S. Customs permits additional 
"non-required" information if it is not false, deceptive, or 
misleading.  U.S. Customs requires the actual foreign country 
of origin to be preceded by the indicators "made in" or 
"product of" if a non-origin reference may confuse the retail 
purchaser. 
 
What additional type of information do you require on 
imported and domestic TAFT goods or packaging that may be 
affixed through non-permanent means (e.g., hangtag, sticker, 
or on packaging)? 
 
U.S. ANSWER:  The Textile Act and Wool Act requires 
disclosure of country of origin, fiber content, and RN number 
or business name, but the FTC does not require that any of 
these must be permanent.  They may all be on secure stickers 
or hang-tags.  U.S. Customs requires country of origin to be 
permanent, as the nature of the article will permit, such as 
by using a sewn-in label.  The Care Labeling Rule requires 
permanent care instructions for most textile clothing.  The 
FTC does not require any additional information (although the 
States may require additional information for products with 
stuffing or filling or padding). 
 
What lead-time do you provide for the shipper or importer to 
correct any labeling not in compliance or to apply for 
re-export or storage in a bonded warehouse? 
 
U.S. ANSWER:  Generally speaking, the goods should be 
properly labeled before they arrive at the U.S. port of 
entry.  If there is a small error with the labeling, the 
company may apply for a "one-time waiver" from FTC, but this 
must be done before U.S. Customs notices the problem.  Even 
if FTC staff is able to grant a waiver, U.S. Customs does not 
have to accept it.  Otherwise, any corrections to labeling 
should be done within 30 days of entry, prior to the 
liquidation of the entry before U.S. Customs. 
 
Do you provide a "grace period" during which labels 
conforming to previous requirements would still be accepted 
in the market place in cases where the lead-time for 
implementation of changes is not adequate for the trader to 
comply with new requirements? 
 
U.S. ANSWER:  This depends on the circumstances.  In some 
cases, FTC staff may grant a "one-time" waiver under the 
Textile Corporate Leniency Policy.  Some situations may not 
be suitable for such a waiver and there may be no grace 
period. 
 
Would you have to make any changes to your domestic 
legislation or regulation to apply the disciplines in the 
U.S. proposal? 
 
U.S. ANSWER: Not Applicable 
 
Do you have any additional comments or concerns regarding 
labeling requirements for imported and domestic TAFT products 
or the U.S. proposal? 
 
U.S. ANSWER: Not Applicable 
 
(End U.S. Questions and Answers) 
 
¶6.  Please slug responses for USTR (BNorton) and Commerce 
(DMendoza and 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