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UNCLAS STATE 012905 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD WTRO ECON
SUBJECT: WTO DEMARCHE REQUEST - U.S./EC TAFT GOODS PROPOSAL 
 
REF: 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 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 may be 
downloaded at the following link and 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. 
 
TAFT proposal text: 
http://docsonline.wto.org/DDFDocuments/t/tn/m a/W93.doc 
 
¶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 is available at the WTO documents website above. 
 
¶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