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1 Mr. Ding Mou ShihDecember 1, 1992 RepresentativeCoordination Council for North AmericanAffairs4301 Connecticut Avenue, NWSuite 420Washington, D.C. 20008Dear Mr. Ding:I refer to the Agreement between AIT and CCNAA relating to tradein cotton, wool, man-made fiber, silk blend and other non-cottonvegetable fiber textile products effected by an exchange of let-ters August 21 and September 28, 1990. I also refer to discussi-ons between AIT and CCNAA, most recently from February 8 throughFebruary 10, 1992. As a result of those discussions I propose,on behalf of AIT, the following Agreement relating to trade incotton, wool, man-made fiber, silk blend and other noncotton ve-getable fiber textile products. 1. This Agreement supersedes the Textile Agreement between CCNAAand AIT of August 21 and September 28, 1990. For the sake ofclarity, it has been decided to write a new agreement to inc-orporate all modifications which have been agreed. This agre-ement represents the outcome of that-effort and, accordingly,shall be the bilateral instrument which governs textile tradebetween Taiwan and the UnitedStates.Term2. (a) The term of this Agreement shall be from January 1, 1990,through December 31, 1995, except as provided in paragra- ph 16. (b) An "agreement year" shall be a calendar year commencingon January 1 and ending December 31. Coverage and Structure3. Textiles and textile products covered by this Agreement areas follows. The determination of whether a textile or textileproduct is of cotton, wool, man-made fiber, or silk blend orother non-cotton vegetable fiber shall be made in accordancewith the terms of paragraph 9. The categories referred to be-low are those described in Annex B hereto.(a) Group I - being products other than apparel (including ya-rn, fabric, and other made-up and miscellaneous products)of cotton, wool, and/or man-made fibers; and luggage of s-ilk blend and/or other non-cotton vegetable fibers (categ-ories 200, 201, 218, 219, 220, 222, 223, 224, 225, 226, 227, 229, 300, 301, 313, 314, 315, 317, 326, 360, 361, 362,363, 369, 400, 410, 414, 464, 465, 469, 600, 603, 604, 606, 607, 611, 613, 614, 615, 617, 618, 619, 620. 621, 622, 624, 625, 626, 627, 628, 629, 665, 666, 669, 670, 870).(b) Group II - being apparel of cotton, wool, man-made fiber,silk blend and/or other non-cotton vegetable fibers exceptfor category 845 (categories 237, 239, 330, 331, 332, 333,334, 335, 336, 338, 339, 340, 341, 342, 345, 347, 348, 349, 350, 351, 352, 353, 354, 359, 431, 432, 433, 434, 435, 436, 438, 439, 440, 442, 443, 444, 445, 446, 447, 448, 459,630, 631, 632, 633, 634, 635, 636, 638, 639, 640, 641, 642, 643, 644, 645, 646, 647, 648, 649, 650, 651, 652, 653, 654, 659, 831, 832, 833, 834, 835, 836, 838, 839, 840, 842,843, 844, 846, 847, 850, 851, 852, 858, 859).(c) Group III - being sweaters of other non-cotton vegetablefibers (category 845).(d) Products of silk blend and/or other non-cotton vegetablefibers not covered by (a), (b) or (c) of this paragraph i-ncluding yarn, fabrics and other made-up and miscellaneousproducts of silk blend and/or other non-cotton vegetablefibers (categories 800, 810, 863, 871 and 899).Limits4. (a) (i) During the term of this Agreement, CCNAA shall limitannual exports from Taiwan of cotton, wool, man-made fiber, and silk blend or other non-cotton vegetable fiber textiles and textile products of Taiwan origin to the United States Of America to the group limits, sub-group limits, specific limits and sub-limits set forth in Annex A-i hereto, as such limits may be adj- usted in accordance with paragraphs 5 and 6. The gro- ups and specific limits set out in Annex A-i are wit- hout SUCh adjustments. All textile and textile produ- cts in categories not Subject to specific limits may be exported from Taiwan to the United States of Amer- ica only in accordance with paragraph 7. (ii) With respect to the following categories in Group I,CCNAA shall limit annual exports from Taiwan to the United States to the specific limits set out in Annex A-i of the Agreement, as may be adjusted by swing, c- arryover and carryforward: 200, 219, 313, 314, 315, 3 61, 369-S and 604. In addition, CCNAA agrees to limit the total exports of these categories i, square mete- rs equivalent (SME) as follows: 19921993 19941995 ────── ────── ────── ───── 126,048,101128,511,135131,025,141133,591,270 It is further agreed that carryover and carryforward of three percent (of which carryover shall not exceed one percent) shall apply to the annual levels set out above. Group quota not used by the sub-group categor- ies is available to the rest of the group. Group quo- ta may be used by the sub-group categories up to the sub-group limit, While the sub-group limit has no ca- rryover in 1992 and no carryforward in 1995, the spe- cific limits within the sub-group will still have av- ailable all the flexibilities permitted under paragr- aphs 5 and 6 of this Agreement. (iii) With respect to the following categories in Group II,CCNAA shall limit annual exports from Taiwan to the United States to the specific limits set out in Annex A-i of the Agreement as may be adjusted by,wing, spe- cial shift, carryover and carryforward: 333/ 4/5, (33 5), 341, 342, 350/650, 351, 447/8, 636, 641, (641-y) and 651. In addition, CCNAA agrees to limit the total "exports of these categories in square meters equivalent (SME) as follows: 1992 19931994 1995 ───── ────── ────── ────── 71,957,65772,614,714 73,280,666 73,955,617 It is further agreed that carryover and carryforward of three percent (of which carryover shall not exceed one percent) shall apply to the annual levels set out above. Group quota not used by the sub-group categor- ies is available to the rest of the group. Group quo- ta may be used by the Sub-group categories up to the Subgroup limit. While the sub-group limit has no car- ryover in 1992 and no carryforward in 1995, the spec- ific limits within the sub-group will still have ava- ilable all the flexibilities Permitted under paragra- phs 5 and 6 of this Agreernent. (b) All textile and apparel products shipped under this Agreement for, the personal use of the importer, reg- ardless of value, and properly marked commercial sam- ple shipments valued at U.S. Dollars 250 or less, sh- all not be subject to the limits in Annex A-1 or the procedures of paragraph 7 of the Agreement, nor shall they require a visa for entry into the United States. The Products listed in Annex C shall not be subject to the limits in Annex A-1. (c) CCNAA agrees with AIT on the following provisions: (i) to adjust its Group II limit to 755 million SME b- eginning in 1992; and (ii) to make adjustments to the base levels, growth ra- tes and swing rates set forth in Annex A-i and pa- ragraph 5 applicable to the following specific li- mits in categories 347/348, 359-C/659-C, 633/634/6 35, (633/634), (635), 6381 639, 640, (640-Y), 642, 645/ 646, 647/648 and 659-S; and (iii) all of the adjustments described in subparagraphs (i) and (ii) above will be subject to review by t- he parties at a round of consultations to be held before the end of 1992, if possible; and (iv) The original base levels, growth rates, and swing rates provided for in Annex A-2 will be restored with the exception of the base levels for Group II and categories 640, (640-Y), and 647/648, upon ag- reement between the parties provided that improve- ments have been made by the authorities represent- ed by CCNAA in the implementation of the bilateral agreement to deal with unlawful 'circumvention (s- uch as by way of illegal transshipment). In addit- ion, CCNAA may request partial or total restorati- on of the base levels for Group II and categories 640, (640-Y), and 647/648 to the levels provided for in the exchange of letters dated August 21, 19 90 and September 28, 1990 upon the additional con- dition that AIT is reasonably satisfied that manu- facturers of those products on Taiwan have the ap- propriate production capacity; and (v) With respect to categories 347/348 and 647/648, t- he provisions of this paragraph do not relate to paragraph 4 (d) below. (d) AIT and CCNAA discussed the proper classification/catego-ry designation of fine knit form-fitting pants-type garm- ents. The two parties agreed to amend the 1992 levels for categories 347/348 and 64 7/648 and establish sublimits on men's and boys' and women's and girls' woven trousers included in 347-W/348-W and 647-W/648-W at the levels set out in Annex A-i. The parties agree to review this issue at the end of 1992. Swing5. (a) During any agreement year, the group limits set out in A-nnex A-1 (or pursuant to an amendment thereto) as they m- ay be adjusted under paragraph 6, may be exceeded by not more than the following percentages: for Group I- three percent until 1992, five percent beginning in 1992. for Group II- one percent provided that the total of the group limits of Groups I and II is not exceeded. (b) There will be no swing for sub-group I and sub-group II.Group quota may be used by the sub-group categories up to the sub-group limit. The specific limits within the sub- group will still have available the flexibility permitted under paragraphs 5 and 6 of this agreement. (c) During any agreement year, and within the applicable gro-up limit for such an agreement year as it may be adjusted under paragraphs 5(a) and 6, the specific limits and sub- limits set out in Annex A-i (or pursuant to an amendment thereto) may be exceeded by not more than the percentages set out below: (1) For the period 1990 - 1991 the following swing is ava-ilable: (i) One percent for categories and sub-limits 633/4/5, 633/4, and 635. (ii) Two and one-half percent for part-category 670-H. (iii) Four percent for category 640 and sub-limit catego- ry 640-Y. (iv) Five Percent for categories, sub-limits and partca- tegories 239, 331, 340, 341, 359-H/659-H, 369-L/670 -L/870, 433, 434, 436, 438, 440, 442, 443, 444, 445 /6, 447/8, 638/9, 641, 641-Y, and 647/8. (v) Six percent for categories and sub-limits 333/4/5, 335, 338/9, 347/8, 435, and 604. (vi) Six and one-half percent for category 313. (vii) No swing for categories 645/6 and 845. (viii) Seven percent for all other specific limits.(2) For the period 1992 - 1995 the following swing is ava-ilable: (i) One Percent for sub-limits (347-W/348-W). (ii) Two percent for category 642. (iii) Two and one-half Percent for part-category 670-H. (iv) Five percent for categories, sub-limits and partca- tegories 239, 331, 340, 341, 359-W659-H, 369-L1 670 -L/870, 433, 434, 436, 438, 440, 442, 443, 444, 445 /6, 447/8, 638/9, 641, 641-Y, and 647/8. (v) Six percent for categories and sub-limits 33 3/4/5, 335, 338/9, 347/8, 435, and 604. (vi) Six and one-half percent for category 313. (vii) No swing for categories and sub-limits 647-W/648-W, 645/6, 640, 640-Y, 845, 633/4/5, 633/4, and 635. (viii) Seven percent for all other specific limits.(d) Swing shall be calculated on the base limit as specif-ied in Annex A-1. Special Shift(e) In addition to the adjustments pursuant to sub-paragr-aph 5(c), the following adjustments to the specific l- imits set out in Annex A-i are available during any a- greement year: (i) Category 331 may be increased by up to five percent provided that an equivalent quantity is deducted f- rom category 631 in the same agreement year, and v- ice versa. (ii) Category 336 may be increased by up to twenty perc- ent provided that an equivalent quantity is deduct- ed from category 636 in the same agreement year, a- nd vice versa. (iii) Category 338/9 may be increased by up to ten perce- nt provided that an equivalent quantity in dozens is deducted from category 638/9 in the same agreem- ent year. (iv) Category 338/9 may be increased by an additional t- en percent provided that four times the 2nd 10 per- cent, added to category 338/9 in dozens is deducted from category 638/9 in the same agreement year. (v) Category 340 may be increased by up to ten percent provided that an equivalent quantity is deducted f- rom category 640 in the same agreement year. (vi) Category 341 may be increased by up to ten percent provided that an equivalent quantity is deducted f- rom category 641 in the same agreement year, and v- ice versa. (vii) Category 342 may be increased by up to twenty perc- ent provided that an equivalent quantity is deduct- ed from category 642 in the same agreement year, a- nd vice versa. (viii) Category 347/8 may be increased by up to fifteen p-ercent provided that an equivalent quantity is. de- ducted from category 647/8 in the same agreement y- ear. For 1992, the total special shift available i- nto category 347-w/348-w shall not exceed 159,740 dozen. The overall quantity of shift into category 347/348 may not exceed the quantity available to t- he sub-limits. The amount of special shift allowed is equal to 15 percent of the 1992 limit for 347-W/ 348-W. (ix) Category 351 may be increased by up to twenty five percent provided that an equivalent quantity is de- ducted from category 651 in the same agreement year , and vice versa. (x) The specific limit on the categories in the left-h- and column below may be increased by the quantities in the center column for the 1990 agreement year p- rovided that an equivalent quantity is deducted fr- om the corresponding upperand lower-garment catego- ries listed in the right-hand column in the same a- greement year. For the following agreement years (1 991-1995), the categories in the left hand column below may be increased by the quantities in the co- lumn for the respective agreement year provided th- at an equivalent quantity is deducted from the cor- responding upper and lower garment categories list- ed in the right hand column: 1990 Cateaory Quantits(NOS) Component Garment Cateaories443 9,987433 and 447/8444 129,090435 and 442 or 447/8643 104,426633 and 647/8644 1,562,740635 and 642 or 647/8Quantits(NOS) 199119921993 1994 1995 443 10,087 10,18810,290 10,393 10,497444130,381 131,685133,002134,332135,675643105,470 106,525107,590108,666109,7536441,601,809 1,641,8541,682,9001,724,9731,768,097Carryforward and Carryover6. (a) Any group limit, subgroup limit, specific limit or sub-l-imit set out in Annex A-i may be exceeded in any agreeme- nt year by carryforward and/or carryover as provided bel- ow : (i) In the case of any group limit or sub-group limit, toa maximum of three percent, of which carryover shall not rep resent more than one represent percent. (ii) In the case of any specific limit or sub-limit exceptas provided in G(a)(iii), to a maximum of two percent, of which carryover shall not represent more than one represent percent; (iii) In the case of categories and sub-categories 340, 633/4/5, 633/4 and 635, carryforward of 7.15 percent. (iv) No c arryforward shall be available for application in the final agreement year. (b) For purposes of this Agreement, a shortfall occurs whenexports of textiles and textile products from Taiwan to the United States of America, in any agreement year, are below any applicable group limit, subgroup limit, specif- ic limit or sub-limit as set out in Annex A-1. (C) Carryover and carryforward shall be calculated on the ba-se limit of the receiving category in the receiving year as specified in Annex A-1. (d) Adjustments made under this paragraph are in addition tothose permitted under paragraph 5. (e) (i) Carryforward used in 1991 by categories 347/348 and 647/648 will be deducted from the 1992 limits for 347- W/348-W and 647-W/648-W respectively. (ii) For 1992, the total carryforward available into cate-gory 347-W/ 348-MT and 347/348 shall not exceed 21,29 9 dozen. The overall quantity of carryforward may not exceed the quantity available to the sublimit. The a- mount of carryforward allowed is equal to 2 % of the 1992 limit for 347-W/348-W. (iii) For 1992, the total carryforward available into cate-gory 647-W/648-W and 647/648 shall not exceed 104,971 dozen. The overall quantity of carryforward may not exceed the quantity available to the sublimit. The a- mount of carryforward allowed is equal to 2 % of the 1992 limit for 647-W/648-W, (iv) For 1992, the total carryover available into category347-W/348-W and 347/348 shall not exceed 10,649 dozen . The overall quantity of carryover may not exceed t- he quantity available to the sublimit. The amount of carryover allowed is equal to 1% of the 1992 limit f- or 347-W/348-W. (v) For 1992, the total carryover available into category 647-W/648-W and 647/648 shall not exceed 52,485 dozen . The overall quantity of carryover may not exceed t- he quantity available to the sublimit. The amount of arryover allowed is equal to 1% of the 1992 limit for 647W-648-W. (vi) For 1993, the total carryover available into category347/348 and 647/648 shall not exceed the available s- hortfall in 347-W/348-W respectively. (vii) For 1992, the combined carryover and carryforward sh-all not exceed 21,299 dozen for categories 347/348, 347-W/348-W, equivalent to 2 percent of the limit for category 347-W/348-W. (viii) For 1992, the combined carryover and carryforward sh-all not exceed 104,971 dozen for categories 647/648, 647-W/648-W, equivalent to 2 percent of the limit for category 647-W/648W. Export Certification System7. (a) Each category and part-category not subject to a specificlimit will be subject to the consultation procedures as set forth in sub-paragraphs 7(b) through 7(h) below. (b) (i) CCNAA shall provide weekly reports promptly (i.e., assoon as possible but in no case later than five U.S. working days following the close of the reporting pe- riod) to AIT on export certifications (EC), by categ- ory and part-category, issued for export to the Unit- ed States for each category and part-category not su- bject to a specific limit. (ii) CCNAA will notify immediately whenever CCNAA will no-tify AIT immediately whenever EC applications for any category or part-category total 15 percent of the pr- evious agreement year's trade within the reporting p- eriod, provided that the issuance of such ECs would bring the total cumulative issuances for the year to 80 percent of the previous year's trade or 66,890 sq- uare meters equivalent for wool products and 468,231 square meters equivalent for cotton, man-made fiber, silk blend and other non-cotton vegetable fiber prod- ucts, whichever is higher. (iii) CCNAA will wait at least five U.S. working days noti-fication to AIT 1 before issuing ECs against the app- lications in question. (c) AIT may request consultations with a view to agreement onan appropriate level of restraint for any category, part- category, or product not given a specific limit for any agreement year whenever, in the view of AIT, conditions in the U.S. market warrant such a limitation on further trade in any such category, part-category, or product in order to eliminate a real risk of market disruption. (d) The request for such consultations shall be supported assoon as possible, and in any case within 21 days of the date of the request, by a statement of market conditions in the United States of America which in the opinion of AIT make necessary the request for consultations. The st- atement shall include data similar to that contemplated in paragraphs 1 and 2 of Annex A of the Arrangement. (e) Upon receipt of a request for such consultations, CCNAA,as requested by AIT, shall cease or otherwise limit furt- her issuance of ECs for a period of seven U.S. working d- ays. AIT may request CCNAA to extend that period of seven U.S. working days and may also request Taiwan to limit t- he issuance ofECs to a level different from that specifi- ed in paragraph 7(f)(i) or (ii) below, whichever is appl- icable. CCNAA shall consider any such request sympatheti- cally and shall respond promptly. Unless agreed otherwise , the CCNAA shall have the right, following the expirati- on of the period of seven U.S. working days mentioned ab- ove or any agreed extension thereof, to resume the issua- nce of ECs up to the level specified in paragraph 7(f)(i) or (ii) below, whichever is applicable. ECs thus issued, as well as ECs issued prior to receipt of the request for consultations, may be honored by the issuance of export licenses by the CCNAA. The two parties, unless otherwise agreed, shall consult as soon as possible within 30 days of the request for su- ch consultations and shall make their best efforts to co- mplete such consultations within 30 days of the commence- ment. (f) (i) In the event that consultations do not result in agr-eement, AIT shall have the right to request the CCNAA to limit exports of the relevant products during the agreement year in which the request for consultations is made to a level not less than the highest of: (A) The level of trade in the relevant product, categ- ory or part-category for the immediately preceding agreement year plus either 15 percent of that lev- el (in the case of cotton, man-made fiber, silk b- lend and other non-cotton vegetable fiber products ) or 6 percent of that level (in the case of wool products). (B) The average of the level of trade for those categ- ories not listed in paragraph 7(f)(i)(c) which are not affected by conversion to the HCC in the rele- vant product, category or part-category for all p- revious years since January 1, 1981 (January 1, 19 87, in the case of silk blend and other nan-cotton vegetable fibers) plus either 15 percent of that average level (in the case of cotton, man-made fi- ber, silk blend and other non-cotton vegetable fi- ber products), or 6 percent of that average level (in the case of wool products), or (C) The average of the level of trade for the 200 cat- egory series and other categories affected by con- version to the HCC, in the relevant product, cate- gory, or part-category for all previous years si- nce January 1, 1986 (January 1, 1987 in the case of silk blend and other non-cotton vegetable fibe- rs), plus either 15 percent of that average level (in the case of cotton, man-made fiber, silk blend and other non-cotton vegetable fiber products), or 6 percent of that average level (in the case of w- ool products). (D) The limit requested by AIT for the cessation of i- ssuance of ECs in accordance with paragraph 7(e) hereof. (ii) Except as provided for in sub-paragraph 7(f)(iv) bel-ow, in respect of any product, or category or part-c- ategory where a limit has been established for a sin- gle agreement year and where, in the immediately sub- sequent agreement year, AIT makes another request for consultations under sub-paragraph 7(c) of this Agree- ment; and, in the event that such consultations do n- ot result in agreement, AIT shall have the right to request CCNAA to limit exports of the relevant produ- cts during the agreement year in which the request f- or consultations is made to a level not less than the higher of: (A) The limit established for the immediately precedi- ng year plus either 8 percent of that limit (in t- he case of cotton, man-made fiber, silk blend and other non-cotton vegetable fiber products) or 3 p- ercent of that limit (in the case of wool product- s). (B) The limit requested by AIT for the cessation of i- ssuance of ECs in accordance with subparagraph 7(e ) hereof. (iii) Where AIT makes a request under paragraph 7(f)(i) or(ii) hereof, CCNAA agrees that it will honor such a request. (iv) In respect of any product, category or part-categoryfor which a limit is established in any one agreement year, either party may, prior to the start of the im- mediately following agreement year, elect to convert that limit into a specific limit effective as such f- rom January 1 of the immediately following agreement year. 7JVhere such a conversion is made, the specific limit so created shall, from the date of effect, be accorded growth at 2.5 percent per-annum for cotton, man-made fiber, silk blend and other non-cotton vege- table fiber products, and one percent per annum for wool products. The specific limit so created shall, from the year of effect, be accorded flexibility (as provided for in paragraph 5) at 7 percent; and in su- bsequent years the flexibility provisions set out in paragraph 6 of the Agreement shall also apply. In the event a silk blend or other vegetable fiber category under paragraph 3(d) is converted into a specific li- mit, appropriate arrangements for swing (both into a- nd out of such category) will be made. (v) Should two requests in respect of the same product, category or part-category be made under paragraph 7(c ) hereof during the term of this Agreement but in di- fferent non-consecutive agreement years, the provisi- ons of paragraph 7(f)(i) shall apply to the second of the two requests. (vi) The two parties agree that the provisions of paragra-ph 7 hereof shall not derogate from the rights of the two parties under paragraph 17 of this Agreement. (g) For the purposes of paragraph 7 hereof, the phrase "levelof trade" shall mean the level of trade established by c- onsultations to be held within. the first six months aft- er the end of each agreement year or, where such consult- ations have not been completed, the level of trade by da- te of export. (h) CCNAA and AIT shall consult as early as possible with regard to problems that may arise if the p- rovisions of paragraph 7 are invoked near the end of an agreement year to consider the possibility of avoiding u- ndue hardship to the trade. 8. CCNAA shall administer its export control system under thisAgreement. AIT may assist CCNAA in implementing the limitati-on provisions of this Agreement by controlling imports of te-xtiles and textile products covered by this Agreement.Classification9. (a) Tops, yarns, piece goods, made-up articles, garments, andother textile manufactured products, all being products which derive their chief characteristics from their text- ile components of cotton, wool, man-made fiber, silk ble- nds, non- cotton vegetable fibers, or blends thereof, in which any or all of those fibers in combination represent the chief weight of the product, are subject to this Agr- eement. (b) For the purposes of this Agreement, textile products cov-ered by sub-paragraph (a) above shall be classified as: (i) man-made fiber textiles, if the product is in chief w-eight of man-made fibers, unless: (A) the product is knitted or crocheted apparel in whi- ch wool equals or exceeds 23 percent by weight of all fibers, in which case the product will be a wo- ol textile; or (B) the product is apparel, not knitted or crocheted, in which wool equals or exceeds 36 percent by weig- ht of all fibers, in which case the product will be a wool textile; or (C) the product is a woven fabric in which wool equals or exceeds 36 percent by weight of all fibers, in which case the product will be a wool textile. (ii) Cotton textiles, if not covered by (i) and if the pro-duct is in chief weight of cotton, unless the product is a woven fabric in which wool equals or exceeds 36 percent by weight of all fibers, in which case the pr- oduct will be a wool textile. (iii) Wool textiles, if neither of the foregoing applies, a-nd the product is in chief weight of wool. (iv) Silk blend or non-cotton vegetable fibers textiles, ifnone of the foregoing applies and the product is in c- hief weight of silk or non-cotton vegetable fibers, u- nless: (A) cotton with wool and/or man-made fibers in the agg- regate equal or exceed 50 percent by weight of the component fibers thereof and the cotton component equals or exceeds the weight of each of the total wool and/or man-made fiber components, in which ca- se the product will be a cotton textile. (B) if not covered by (iv)(A) and wool exceeds 17 perc- ent by weight of all component fibers, in which ca- se the product will be considered a wool textile. (C) if not covered by (iv)(A) or (B) and man-made fibe- rs in combination with cotton and/or wool in the a- ggregate equal or exceed 50 percent by weight of t- he component fibers thereof and the man-made fiber component exceeds the weight of the total wool and/ or cotton component, in which case the product will be considered a man-made fiber textile. (c) Notwithstanding the above, garments which contain 70 per-cent or more by weight silk (unless they also contain ov- er 17 percent by weight wool), and products other than g- arments which contain 85 percent or more by weight silk, are not subject to this Agreement. Silk blend and non-co- tton vegetable fiber sweaters, as determined above, shall be divided into "silk blend" sweaters and "non-cotton ve- getable fiber" sweaters. For the purpose of this division , sweaters shall be classified as "silk blend" if the si- lk component exceeds by weight the non-cotton vegetable fiber component (if any). Sweaters not classified as "si- lk blend" sweaters in accordance with the foregoing shall be classified as "non-cotton vegetable fiber" sweaters. Garments containing 70 percent or more by weight silk and over 17 percent by weight wool shall be classified as wo- ol textiles, under subparagraph (b)(iv)(B). (d) Coverage under this paragraph is intended to be identicalwith the terms of Article 12 of the Arrangement regarding International Trade in Textiles and in conformance with paragraph 24 of the July 31, 1986, Protocol of Extension. In the event of a question regarding whether a product is covered by this Agreement by virtue of being chief weight of cotton, wool, man-made fiber, silk blend or non-cotton vegetable fiber, the chief value of the fibers may be c- onsidered. Merged Categories10. (a) The system of categories and the rates of conversion li-sted in Annex B hereto shall apply in implementing this Agreement, except as provided for in paragraph 10 hereof . (b) For the purpose of this Agreement and with reference tothe particular circumstances of Taiwan's trade patterns with the United States of America, the categories and p- art-categories below are merged as indicated and treated as single categories, with limits for categories and sub -categories as set out in Annex A-1. Categories Designation inSub-categoriesthe Agreement 225, 317, 326 225/317/326 None300, 301, 607 300/301/607300;301;607369-L, 670-L,870369-L/670-L/870 None613,614,615,617 613/4/5/7 None619, 620619/20None625, 626, 627,628,629 625/6/7/8/9 None333, 334, 335 333/4/5 335338, 339338/9 None347, 348347/8 347-W/348-W347-W, 348-W347-W/348-W None350,650 350/650 None352,652 352/652 None359-C, 659-C359-C/659-C None359-H, 659-H359-H/659-H None445, 446445/6 None447,448 447/8 None633, 634, 635 633/4/5 633/4;635638, 639638/9 None645, 646645/6 None647, 648647/8 647-W/648-W647-W, 648-W647-W/648-W None(c) For the purpose of this Agreement, the following catego-ries summarized in Annex B are divided into part catego- ries: Categories Designation inSub-categoriesthe Agreement 347347-WM & B woven pants347347-KM & B knit pants348348-WM & B woven pants348348-KM & B knit pants359359-CCoveralls359359-HHeadwear359359-OOther369369-LLuggage369369-SShoptowels369369-OOther647647-WM & B woven pants647647-KM & B knit pants648648-WM & B woven pants648648-KM & B knit pants659659-CCoveralls659659-HHeadwear659659-SSwimwear659659-OOther669669-PPolypropylene bags669669-TTents669669-OOther670670-HHandbags670670-OLuggage670670-LOther(d) The following sub-limits shall be established:Categories Designation inSub-categoriesthe Agreement 640 640-Y Shirts made of yarn-dyed fabric 614 614-Y Blouses made of yarn-dyed fabric 347/348 347-W/348-W cotton trousers, pantsand shorts made of wo- ven fabric 647/648 647-W/648-W man-made fiber trousers,pants and shorts made of woven fabric (e) For the purpose of computing limits and charges to limi-ts, the rates of conversion for individual categories s- et out in annex B shall be applied, except as stated be- low: Category Coversion Factor300/301/6078.50333/4/5 33.75352/652 11.30359-C/659-C 10.10359-H/659-H 11.50369-L/670-L/8703.80633/4 33.9633/4/5 34.1638/9 12.50Implementation and Administration11. (a) Changes in the implementation and interpretation of thisAgreement (such as changes in practices, rules, procedu- res, categorization, etc.) which have the effect of ups- etting the balance of rights and obligations between the parties, or which affect the economic content of this A- greement, or which affect the ability of either party to use or benefit fully from this Agreement, or which resu- lt in any disruption to trade shall normally be avoided. The party initiating the relevant change shall endeavor to consult prior to the time that such action may affect trade between Taiwan and the United States of America W- ith a view toward making appropriate adjustments to this Agreement. Should consultation prior to implementation not be feasible, both parties agree to consult at the r- equest of either party at the soonest possible date, wi- th a view toward reaching a mutually satisfactory solut- ion within 30 days of the request. (b) Mutually satisfactory administrative arrangements or ad-justments may be made to resolve minor problems arising in the implementation of this Agreement, including diff- erences in points of procedure or operation. (c) Exports from Taiwan in excess of authorized limits in a-ny agreement year may be denied entry into the United S- tates of America. Any such shipments denied entry may be permitted entry into the United States and charged to t- he applicable limit in the succeeding agreement year. (d) Exports from Taiwan in excess of authorized limits in a-ny agreement year will, if allowed entry into the United States of American during that agreement year, be charg- ed to the applicable limit in the succeeding Agreement year. (e) AIT will notify CCNAA as soon as possible of the amountof charges involved pursuant to sub-paragraph 11(d). (f) Any action taken pursuant to this paragraph will not pr-ejudice the rights of either side regarding consultatio- ns. Visa System12. The visa and certification system established by letters da-ted April 18,1991, and May 1,1991, will remain in force sub-ject to paragraph 11(b). Exchange of Information13. (a) The two parties recognize that the successful implement-ation of this Agreement depends in large part upon mutu- al cooperation on statistical questions. AIT shall prom- ptly supply CCNAA with data on monthly imports of cotton , wool, man-made fiber, silk blend and other non-cotton vegetable fiber textile products from Taiwan. CCNAA sha- ll promptly supply AIT with pertinent data on anticipat- ed exports in categories not subject to specific limits and data on monthly exports of cotton, wool, man-made f- iber, silk blend and other non-cotton vegetable fiber t- extile products to the United States. (b) Each party agrees to supply promptly any other availablestatistical data necessary to the implementation of this Agreement requested by the other party. (c) AIT and CCNAA agree to supply to the other party inform-ation within its possession reasonably believed to be n- ecessary to the enforcement of this Agreement. Spacing14. CCNAA shall use its best efforts to space exports from Taiw-an to the United States of America within each category orsub-category (or combination of categories) evenly througho-ut each agreement year, taking into consideration normal se-asonal factors. Equity and Extension of the Arrangement15. (a) If, having regard to the provisions of the Arrangement (and any extension thereof), CCNAA considers that Taiwan is being placed in an inequitable position vis-a-vis a third party (including in relation to any matter concer- ning coverage under this Agreement), CCNAA may request consultations with AIT with a view to taking appropriate remedial action. AIT shall consult with CCNAA in the ev- ent of such a request. (b) Either party may request consultations following any ex-tension of the Arrangement, with the objective of revis- ing this Agreement to ensure conformity with the said e- xtension should that, in either party's view, be necess- ary. (c) AIT and CCNAA agree to consult on the provisions of thisAgreement in the event that a new international regime for textile trade is agreed after the scheduled expirat- ion of the 1986 protocol of extension to the Multifiber Arrangement on July 31,1991 to conform this Agreement to the new regime. Termination16. This Agreement may be terminated either by mutual consent ofthe two parties at any time, or by either party, effectiveat the end of an agreement year, upon written notice to theother party to be given at least 180 days prior to the endof such agreement year. Rights17. For the duration of this Agreement, AIT shall not invoke pr-ocedures similar to that of Article 3 of the Arrangement torequest restraint on the export of cotton, wool, man-made f-iber, silk blend and other non-cotton vegetable fiber texti-le products from Taiwan to the United States of America. AITand CCNAA reserve their rights to request consultations withrespect to textiles and textile products not subject to thisAgreement. Other Consultation Provisions18. In addition to the consultation provisions elsewhere in thisAgreement, CCNAA and AIT agree to consult, at the request ofeither party, on any question arising in the application ofthis Agreement. 19. AIT and CCNAA shall, to the extent possible, provide each o-ther any necessary assistance to avoid circumvention of thisAgreement. This letter and your reply confirming the contents thereof on b-ehalf of CCNAA will constitute an Agreement between AIT and CCN-AA governing trade in cotton, wool, man-made fiber, silk blendand other non-cotton vegetable fiber textile products between T-aiwan and the United States of America, which shall enter intoforce on the date of your reply with effect from January 1,1992.Sincerely,(Signed)Natale H. BellocchiChairman of the Board and ManagingDirectorANNEX A-1 CURRENT QUOTA LIMITS CATEGORY UNIT LIMITLIMITLIMIT────── ────────────────── GROUP ISME 529,202,216,534,494,238 539,839,180SUBGROUP I SME N/AN/A126,048,101200KG 560,429574,440588 ,801218SME 17,344,350 17,777,95918,222,408219SME 12,754,806 13,073,67613,400,518225/317/326SME 30,786,176 31,555,83032,344,726226SME5,586,7085,726,376 5,869,535300/301/607KGS1,500,0001,522,500 1,545,338(300 KGS1,250,0001,268,750 1,287,781)(301 KGS1,250,0001,268,750 1,287,781)(607 KGS1,250,0001,268,750 1,287,781)313SME 60,942,149 61,551,57062,167,086314SME 22,719,691 23,287,68323,869,875315SME 17,409,072 17,844,29918,290,406361NOS1,125,7791,153,923 1,182,771363NOS 11,612,973 11,671,08311,729,393369-L/670-LKGS 41,000,000 41,820,00042,656,400/870369-SKGS463,876466,195 468,526604KGS200,167203,170 206,218611SME2,500,0002,562,500 2,626,563613/4/5/7SME 15,504,754 15,892,37316,289,682619/20 SME 11,396,234 11,681,14011,973,1695625/6/7/8/9 SME 14,829,192 15,199,92215,579,920669-PKGS269,590276,330 283,238669-TKGS876,222898,128 920,581670-HKGS 15,700,000 16,014,00016,334,280ANNEX A-1CURRENT QUOTA LIMITS CONTINUEDMETRIC 1990 1991 1992 CATEGORY UNIT LIMITLIMITLIMIT───── ─────────────────── GROUP ISME 545,237,572550,689,948556,196,848SUBGROUP I SME 128,511,135131,025,141133,591,270200KG603,521618,609634,074218SME18,677,968 19,144,917 19,623,540219SME13,735,531 14,078,919 14,430,892225/317/326SME33,153,344 33,982,178 34,831,732226SME 6,016,2736,166,6806,320,847300/301/607KGS 1,568,5181,592,0461,615,927(300 KGS 1,307,0981,326,7041.346,605)(301 KGS 1,307,0981,326,7041.346,605)(607 KGS 1,307,0981,326,7041.346,605)313SME62,788,757 63,416,645 64,050,811314SME24,466,622 25,078,288 25,705,245315SME18,747,666 19,216,358 19,696,767361NOS 1,212,3401,242,6491,273,715363NOS11,788,040 11,846,980 11,906,215369-L/670-LKGS43,509,528 44,379,719 45,267,313/870369-SKGS 470,869473,223475,589604KGS 209,311212,451215,638611SME 2,692,2272,759,5532,828,521613/4/5/7SME16,696,924 17,114,347 17,542,206619/20 SME12,272,498 12,579,310 12,893,793625/6/7/8/9SME15,969,418 16,368,653 16,777,870669-PSKG 290,319297,577305,016669-TKGS 943,596967,186991,366670-HKGS16,660,966 16,994,185 17,334,069ANNEX A-1CURRENT OUOTA LIMITS CONTINUEDMETRIC 199019911992 CATEGORY UNIT LIMIT LIMIT LIMIT───── ─────────────────── GROUP II SME791,383,399 799,297,233755,000,000SUBGROU II SME N/AN/A 71,957,657237DOZ547,545 561,234575,265239KGS5,000,000 5,075,0005,151,125331DPR487,376 489,813492,262333/4/5DOZ240,000 246,000252,150(335 DOZ130,000 133,250136,581)336DOZ 93,28795,619 98,009338/9DOZ695,275 705,704716,290340DOZ1,110,000 1,111,1101,112,221341DOZ325,029 326,625328,258342DOZ203,029 204,044205,064345DOZ 97,47399,910102,408347/8DOZ1,059,633 1,064,9312,339,931(347-W/348-W DOZ N/AN/A1,064,931)350/650DOZ125,000 126,250127,513351DOZ337,772 339,461341,158352/652DOZ2,474,982 2,536,8572,600,278359-H/659-HKGS4,607,852 4,630,8914,654,045359-C/659-CKGS1,440,000 1,447,2001,447,633433DOZ 13,93514,074 14,215434DOZ9,674 9,7719,869435DOZ 22,97623,206 23,438436DOZ4,573 4,6194,665438DOZ 25,82126,079 26,340440DOZ5,000 5,0505,101442DOZ 43,34743,390 43,433443DOZ 39,01439,404 39,798444DOZ 55,56356,119 56,680445/6DOZ130,124 130,775131,429447/8DOZ 19,04219,232 19,424631DOZ4,154,629 4,237,7224,322,476633/4/5DOZ1,634,440 1,634,4401,634,440(633/4 DOZ959,317 959,317959,317)(635 DOZ850,077 850,077850,077)636DOZ350,662 354,169357,711638/9DOZ6,592,119 6,592,1196,565,058640DOZ2,196,291 2,196,2911,058,909(640-Y DOZ1,361,080 1,361,080281,710)641DOZ724,533 725,258725,983(64l-Y DOZ253,586 253,840254,094)642DOZ776,357 777,133777,133643NOS464,282 468,925473,614644NOS594,004 608,854624,075645/6DOZ4,087,255 4,107,6914,107,691647/8DOZ5,707,874 5,707,8745,473,544(647-W/648-W DOZ N/AN/A5,248,544651DOZ423,590 425,708427,837659-SKGS1,778,232 1.778,2321,601,702835DOZN/A N/A 16,400ANNEX A-1CURRENT QUOTA LIMITS CONTINUEDMETRIC 199319941995 CATEGORY UNIT LIMIT LIMIT LIMIT───── ─────────────────── GROUP II SME 755,000,000 756,000,000 755,000,000SUBGROUPII SME72,614,71473,280,66673,955,617237DOZ 589.647 604,388 619,498239KGS 5,228,392 5,3O6,818 5,386,420331DPR 494,723 497.197 499,683333/4/5DOZ 258,454 264,915 271,538(335 DOZ 139,996 143,496 147,083)336DOZ 100,459 102,970 105,544338/9DOZ 727,034 737,940 749,009340DOZ 1,113,333 1,114,446 1,115,560341DOZ 329,899 331,548 333,206342DOZ 206,089 207.119 208,155345DOZ 104,968 107,592 110,282348/8DOZ 1,064,931 1,064,931 1,064,931(347-W/348-W DOZ350/650DOZ 128,788 130,076 131,377351DOZ 342,864 344,578 346,301352/652DOZ 2,665,285 2,731,917 2,800,215359-H/659-HKGS 4,677,315 4,700,702 4,724,205359-C/659-CKGS 1,447,633 1,447,633 1,447,633433DOZ14,35714,50114,646434DOZ 9,96810,06810,269435DOZ23,67223,90924,148436DOZ 4,712 4,759 4,807438DOZ26,60326,86927,138440DOZ 5,152 5,204 5,256442DOZ43,47643,51943,563443NOS40,19640,59841,004444NOS57,24757,81958,397445/6DOZ 132,086 132,747 133,410447/8DOZ19,61819,81420,012631DOZ 4,408,926 4,497,105 4,587,047633/4/5DOZ 1,634,440 1,634,440 1,634,440(633/4 DOZ 959,317 959,317 959,317)(635 DOZ 850,077 850,077 850,077)636DOZ 361,288 364,901 368,550638/9DOZ 6,565,058 6,565,058 6,565,058640DOZ 1,058,909 1,058,909 1,058,909(640-Y DOZ 281,710 281,710 281,710641DOZ 726,709 727,436 728,163(641-Y DOZ 254,348 254,602 254,857)642DOZ 777,133 777,133 777,133643NOS 478,350 483,134 487,965644NOS 639,677 655,669 672,061645/6DOZ 4,107,691 4,107,691 4,107,691647/8DOZ 5,248,544 5,248,544 5,248,544(647-W/648-W DOZN/A N/A651DOZ 429,976 432,126 434,287659-SKGS 1,601,702 1,601,702 1,601,702835DOZ16,81017,23017,661ANNEX A-1CURRENT OUOTA LIMITS CONTINUEDMETRIC