AGREEMENT on the modification of certain provisions of the 1988 MFA bilateral Agreement on trade in textile products between the European Community and the People's Republic of China

Following discussions in December 1992 on the adaptation of growth and flexibility rates laid down in the 1988 MFA bilateral Agreement between China and the European Community, and the discussions in 1994 concerning the modifications of economic provisions of the Agreement, as envisaged in the exchange of letters between Sir Leon Brittan and Minister Wu Yi in view of China's accession to GATT/WTO, the two Parties have agreed that:

(a) the growth and flexibility rates set out in the bilateral agreement between China and the European Community are modified, as of 1 January 1993, as indicated in the Annex to this Agreement. This commitment reflects a compromise that takes into account the following elements:

(1) the fact that China has become the largest supplier of the EC in textiles and clothing;

(2) the perspective of China's accession to GATT/WTO;

(b) these modified rates will be the basis of all notifications to GATT/WTO, as being those in force during the 12 month period prior to the entry into force of the ATC (Uruguay Round Agreement on Textiles and Clothing);

(c) the actual application of the modified rates shall remain suspended until the date of China's accession to GATT/WTO;

(d) should China's accession to GATT/WTO not be completed during the first nine months of 1995, consultations will be held between the two Parties to discuss the terms of a bilateral Agreement governing the trade in textile products for 1996 and subsequent years, to be based on the growth and flexibility rates not lower than those listed in the Annex attached to this Agreement;

(e) this Agreement shall enter into force on the first day of the month following its signature. It shall apply provisionally as of the date of its initialling.

For the Government of the People's Republic of China

For the Council of the European Union

ANNEX

TO THE AGREEMENT ON THE MODIFICATION OF THE 1988 MFA BILATERAL AGREEMENT ON TRADE IN TEXTILE PRODUCTS BETWEEN THE EUROPEAN COMMUNITY AND THE PEOPLE'S REPUBLIC OF CHINA

>TABLE>

>TABLE>