AGREEMENT IN THE FORM OF EXCHANGE OF LETTERS

between the European Community and the People's Republic of China initialled in Beijing on 6 December 1999 amending the Agreement between the European Economic Community and the People's Republic of China on trade in textile products as last amended by an agreement initialled on 20 November 1999 and amending the Agreement between the European Community and the People's Republic of China initialled on 19 January 1995 on trade in textile products not covered by the MFA bilateral Agreement

A. Letter from the Council of the European Union

Sir,

1. I have the honour to refer to the consultations held between our respective delegations for the purpose of amending and extending both the Agreement between the European Economic Community and the People's Republic of China on trade in textile products initialled on 9 December 1988, as last amended by Agreements initialled on 20 November 1998 (hereinafter referred to as "the MFA Agreement") and the Agreement between the European Community and the People's Republic of China initialled on 19 January 1995 on trade in textile products not covered by the MFA bilateral Agreement (hereinafter referred to as "the non-MFA Agreement").

2. As a result of the consultations, both Parties agree to amend as of 1 January 2000 the following provisions of the MFA Agreement in order to ensure stability of trade while they continue their efforts to agree on the appropriate terms and conditions of an agreement governing future trade which, once applied by both Parties, will substitute for the present agreement:

2.1. The text of the second sentence of Article 20, paragraph 1 is replaced by the following text: "It shall be applicable until 31 December 2000."

2.2. Annex I which sets out the products concerned by the Agreement is replaced by Appendix 1 to this letter.

2.3. Annex III is replaced by Appendix 2 to this letter for the year 2000.

2.4. The Annex to Protocol E which sets out the quantitative restrictions for economic outward processing operations is replaced by Appendix 3 to this letter for the year 2000.

2.5. In the Joint Declaration on Berlin Fair set out in Appendix 8 to the Agreement initialled on 8 December 1992 the reference to "the year 1999" is replaced by "the year 2000".

3. As a result of the consultations, both Parties agree to amend as of 1 January 2000 the following provisions of the non-MFA Agreement in order to ensure stability of trade while they continue their efforts to agree on the appropriate terms and conditions of an agreement governing future trade which, once applied by both Parties, will substitute for the present agreement:

3.1. The text of the second sentence of Article 17, paragraph 1, is replaced by the following text: "It shall apply with effect from 1 January 1995 and be applicable until 31 December 2000."

3.2. Annex I which sets out the products concerned by the Agreement is replaced by Appendix 4 to this letter.

3.3. Annex II is replaced by Appendix 5 to this letter for the year 2000.

3.4. The Annex to Protocol B is replaced by Appendix 6 for the year 2000.

4. All Agreed Minutes and Declarations annexed to this letter shall form an integral part of the relevant Agreement to which they refer.

5. Should the People's Republic of China become a Member of the World Trade Organisation before the date of expiry of this Agreement, the restrictions in force shall be phased out in the framework of the WTO Agreement on Textiles and Clothing and China's Protocol of Accession to the WTO.

6. I should be obliged if you could kindly confirm the acceptance of your Government of the foregoing. Should this be the case, this Agreement in form of Exchange of Letters shall enter into force on the first day of the month following the day on which the Parties have notified each other that the legal procedures necessary to this end have been completed. In the meantime, it shall be applied provisionally from 1 January 2000 on conditions of reciprocity.

Please accept, Sir, the assurance of my highest consideration.

For the Council of the European Union

B. Letter from the Government of the People's Republic of China

Sir,

I have the honour to acknowledge receipt of your letter of ... which reads as follows: "Sir,

1. I have the honour to refer to the consultations held between our respective delegations for the purpose of amending and extending both the Agreement between the European Economic Community and the People's Republic of China on trade in textile products initialled on 9 December 1988, as last amended by Agreements initialled on 20 November 1998 (hereinafter referred to as 'the MFA Agreement') and the Agreement between the European Community and the People's Republic of China initialled on 19 January 1995 on trade in textile products not covered by the MFA bilateral Agreement (hereinafter referred to as 'the non-MFA Agreement').

2. As a result of the consultations, both Parties agree to amend as of 1 January 2000 the following provisions of the MFA Agreement in order to ensure stability of trade while they continue their efforts to agree on the appropriate terms and conditions of an agreement governing future trade which, once applied by both Parties, will substitute for the present agreement:

2.1. The text of the second sentence of Article 20, paragraph 1 is replaced by the following text: 'It shall be applicable until 31 December 2000.'

2.2. Annex I which sets out the products concerned by the Agreement is replaced by Appendix 1 to this letter.

2.3. Annex III is replaced by Appendix 2 to this letter for the year 2000.

2.4. The Annex to Protocol E which sets out the quantitative restrictions for economic outward processing operations is replaced by Appendix 3 to this letter for the year 2000.

2.5. In the Joint Declaration on Berlin Fair set out in Appendix 8 to the Agreement initialled on 8 December 1992 the reference to 'the year 1999' is replaced by 'the year 2000'.

3. As a result of the consultations, both Parties agree to amend as of 1 January 2000 the following provisions of the non-MFA Agreement in order to ensure stability of trade while they continue their efforts to agree on the appropriate terms and conditions of an agreement governing future trade which, once applied by both Parties, will substitute for the present agreement:

3.1. The text of the second sentence of Article 17, paragraph 1, is replaced by the following text: 'It shall apply with effect from 1 January 1995 and be applicable until 31 December 2000.'

3.2. Annex I which sets out the products concerned by the Agreement is replaced by Appendix 4 to this letter.

3.3. Annex II is replaced by Appendix 5 to this letter for the year 2000.

3.4. The Annex to Protocol B is replaced by Appendix 6 for the year 2000.

4. All Agreed Minutes and Declarations annexed to this letter shall form an integral part of the relevant Agreement to which they refer.

5. Should the People's Republic of China become a Member of the World Trade Organisation before the date of expiry of this Agreement, the restrictions in force shall be phased out in the framework of the WTO Agreement on Textiles and Clothing and China's Protocol of Accession to the WTO.

6. I should be obliged if you could kindly confirm the acceptance of your Government of the foregoing. Should this be the case, this Agreement in form of Exchange of Letters shall enter into force on the first day of the month following the day on which the Parties have notified each other that the legal procedures necessary to this end have been completed. In the meantime, it shall be applied provisionally from 1 January 2000 on conditions of reciprocity.

Please accept, Sir, the assurance of my highest consideration."

I have the honour to confirm that my Government is in agreement with the contents of your letter.

Please accept, Sir, the assurance of my highest consideration.

For the Government of the People's Republic of China

Appendix 1

ANNEX I

PRODUCTS REFERRED TO IN ARTICLE 1

1. When the constitutive material of the products of categories 1 to 114 is not specifically mentioned, these products are to be taken to be made exclusively of wool or of fine hair, of cotton or of man-made fibres(1).

2. Garments which are not recognisable as being garments for men or boys or as being garments for women or girls are classified with the latter.

3. Where the expression "babies' garments" is used, this is meant to cover garments up to and including commercial size 86.

GROUP I A

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GROUP I B

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GROUP II A

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GROUP II B

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GROUP III A

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GROUP III B

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(1) Where there is an "ex" symbol in front of a CN code, the products covered in each category are determined by the scope of the CN code and by that of the corresponding description.

ANNEX I A

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Appendix 2

ANNEX III

(The full product descriptions of the categories listed in this Annex are to be found in Appendix 1 of this Agreement)

COMMUNITY QUANTITATIVE LIMITS

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Appendix 3

ANNEX TO PROTOCOL E

OUTWARD PROCESSING TRAFFIC

COMMUNITY QUANTITATIVE LIMITS

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Appendix 4

ANNEX I

1. This Annex covers textile raw materials (categories 128 and 154), textile products other than those of wool and fine animal hair, cotton and man-made fibres, as well as man-made fibres and filaments and yarns of categories 124, 125 A, 125 B, 126, 127 A and 127 B.

2. Without prejudice to the rules for the interpretation of the Combined Nomenclature, the wording of the description of goods is considered to be of indicative value only, since the products covered by each category are determined, within this Annex, by CN codes. Where there ist an "ex" symbol in front of a CN code, the products covered in each category are determined by the scope of the CN code and by that of the corresponding description.

3. Garments which are not recognisable as being garments for men or boys or as being garments for women or girls are classified with the latter.

4. Where the expression "babies' garments" is used, this is meant to cover garments up to and including commercial size 86.

GROUP I

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GROUP II

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GROUP III A

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GROUP III B

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GROUP IV

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GROUP V

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Appendix 5

ANNEX II

(The full product descriptions of the categories listed in this Annex are to be found in Appendix 4 of this Agreement)

COMMUNITY QUANTITATIVE LIMITS

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Appendix 6

ANNEX TO PROTOCOL B

(the product descriptions of the categories listed in this Annex are to be found in Annex I to the Agreement)

OPT QUOTAS

COMMUNITY QUANTITATIVE LIMITS FOR THE YEAR 2000

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