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23.5.  EU's sectoral commercial policy measures

    In the framework of the General Agreement on Tariffs and Trade, several agreements or arrangements had been concluded in particularly sensitive sectors. The most important of these arrangements was that on international trade in textiles, better known as the Multifibre Arrangement (MFA), signed in 1974, under which signatories had undertaken not to introduce new unilateral or bilateral restrictions on trade in textiles and to regulate their trade relations by bilateral agreements. At the insistence of developing countries, at the Uruguay Round negotiations [see section 23.4], WTO members adopted the Agreement on Textiles and Clothing (ATC), which governed trade between all Members of the WTO until such time as they were integrated into normal WTO rules and disciplines [Annex 1 – Annex 1A]. This integration was completed in January 2005 and consequently trade in textile and clothing products is no longer subject to quotas under a special regime but is now governed by the general rules and disciplines embodied in the multilateral WTO trading system.

    Common rules seek to promote, through cooperation between the Contracting Parties, the orderly and equitable development of trade in textiles between the European Community and supplier countries and to defuse the real risk that international trade in textile products be disrupted [Regulation 2015/936]. Following the final stage of global liberalisation on January 1 2005, textile and clothing exports to Europe from China experienced a very rapid surge accompanied by very rapid drops in unit prices. Through its global export strategy, the European Commission has focused new efforts and new resources on opening new markets for EU textile exports and reducing the level of counterfeiting of European textile goods. The EU is the world's second largest exporter of textile products. In 2007 the EU exported €33.7 billion worth of textiles and continues to dominate global markets for upmarket and high quality textiles and clothing.

    The specific nature of ship-purchase transactions makes it impossible to apply to shipbuilding the general anti-dumping and anti-subsidy measures in force [see section 23.2.2]. A European Regulation, based on the OECD Shipbuilding Agreement, accordingly institutes a procedure specific to this sector [Regulation 2016/1036, see section 15.5.3 and 17.3.2.]. It lays down detailed rules for determining the existence of an injurious pricing and of an injury to European industry, initiating proceedings, undertaking an investigation, imposing and levying an injurious pricing charge, counter-measures, etc. Since it has not been ratified by the United States, the OECD agreement has still not entered into force. The world market for merchant vessels is still in crisis and weak prices are persisting because of the extremely low prices offered by Korean shipyards. An agreement between the European Community and the Government of the Republic of Korea commits the latter to refrain from any direct or indirect intervention to underwrite loss-making Korean shipyards, to apply internationally accepted financial and accounting principles and to ensure that Korean shipyards set prices that reflect market conditions [Agreed Minutes and Decision 2000/409]. Nevertheless, as unfair trading practices by the Republic of Korea continued, the EU introduced a temporary defence mechanism and initiated proceedings against this country at the WTO [Regulation 1177/2002 last amended by Regulation 502/2004].

    Commercial policy measures for steel products exist in relation to several Central and Eastern European countries and some Independent States of the former Soviet Union. Agreements between the European Coal and Steel Community and Russia [Agreement and Decision 2007/739 and Ukraine [Agreement and Decision 97/482 and Decision 2002/1001] are designed to establish a framework for the gradual liberalisation of trade in steel products and to enable the Russian and Ukrainian steel industries to adapt gradually to normal competitive conditions, including State aid, competition and environmental protection.

    In the automobile sector, Japanese car imports were a key sectoral problem to be settled. In 1991, the European Community has reached an agreement with Japan on trade in motor vehicles in the single market. In accordance with the joint declaration between the Community and Japan, the European market is progressively harmonised - thus replacing the national reception procedures by a single European reception [Directive 2002/24, replaced by Regulation 168/2013, implemented by Regulation 901/2014] - and imports gradually liberalised in the five protected markets (France, Italy, Portugal, Spain and United Kingdom). For its part, Japan undertook to "moderate" exports in line with the market hypotheses on which negotiations were based, namely the evolution of supply and demand, including production within the EU. Japan must also remove technical barriers to imports of European vehicles. Joint half-yearly monitoring provides a bilateral check on the application of this arrangement. The Commission conducts bilateral dialogues on market access with Japan and a number of other countries such as Brazil, Korea, Poland, Ukraine and Egypt.

    Among the various agreements concluded at the Uruguay Round, several concern the agricultural sector, notably the Agreement on Agriculture [Annex 1 – Annex 1A]. In order to reduce the trade-restricting effects of national policies, including the common agricultural policy, whilst ensuring that domestic objectives could be pursued, it was agreed to convert the various forms of protection into customs duties. The Agreement on Agriculture requires, in particular, the abolition of variable import levies provided for under the common market organisations and the fixing of customs duties in the Common Customs Tariff. However, for certain product groups, such as cereals, rice, wine and fruit and vegetables, certain supplementary mechanisms not involving the collection of fixed customs duties are inserted into the basic Regulations of the CAP by a Regulation which sets out the adjustments and transitional arrangements required in the agricultural sector in order to implement the agreements concluded during the Uruguay Round [Regulation 3290/94, see section 21.4.4]. The granting of export subsidies is limited henceforward to certain groups of agricultural products. In addition, such subsidies are limited in terms of quantity and value. Developed countries, including all the Member States of the EU, committed themselves to reduce export subsidies by 36% and the actual volume of subsidised exports by 21% over a six-year period. Moreover, the EU undertook to cut the global level of internal support by 20% over a period of six years, this being in line with the figures agreed in the CAP reform. The result is a better compatibility of the CAP and the GATT but also a European agriculture more market-oriented and competitive. The access into the European market is certainly facilitated, but the principle of European preference is maintained.

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