MEMORANDUM OF UNDERSTANDING BETWEEN THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES AND THE GOVERNMENT OF CANADA RELATING TO THE EXPORT FROM THE PHILIPPINES OF CERTAIN TEXTILE…
1. This Memorandum of Understanding (MOU) sets out the arrangements that have been agreed between the Government of the Republic of the Philippines and Canada regarding the export of certain textiles and textile products from the Philippines for import into Canada.
2. These arrangements have been made having regard to the Arrangement Regarding International Trade in Textiles (hereinafter referred to as “the MFA”) and in particular to Article 4 thereof, and to the Protocol extending the said Arrangement.
Restraint Periods
3. These arrangements will apply for five separate calendar periods commencing on 1 January 1982 and ending on 31 December 1986.
Restraint Levels
4. Except as provided for in paragraphs 16 to 21 below, the Government of the Philippines will restrain its exports to Canada of the textiles and textile products described in Annex I for the calendar year commencing 1 January 1982 to the limits specified therein.
5. Except as provided for in paragraphs 16 to 21 below, for the four calendar year periods commencing, 1 January 1983 and ending on 31 December 1986, the Government of the Philippines will restrain its exports to Canada of the textile products described in Annex I to the limits specified therein advanced on an annual basis by the growth rate specified in column (D).
Coverage
6. For the purpose of these arrangements, the expression “textiles” will have the meaning a scribed to the expression in Article 12.1 of the MFA.
7. With reference to Article 12.3 of the MFA, traditional folklore items produce by the cottage industry of the Philippines will be exempted from restraint provided that such items are properly certified in accordance with the provisions contained in Annex III.
8. For the purpose of classifying textiles and textile products in the appropriate category, the definitions and notes set out in Annex II will apply.
Administration
9. These arrangements will be implemented on the basis of the export allotment system operated by the Government of the Philippines.
10. The Government of Canada will admit imports of the textiles and textile products described in Annex II and subject to a specific quantitative limit in Annex I, provided such imports are covered by a copy of a Philippine “Export License” as per specimen in Annex IV endorsed and issued by the proper Philippine authority to the effect that the imports covered by the license have been debited to the applicable quantitative limit as set out in Annex I.
11. The export licenses issued by the Government of the Philippines in respect of products subject to restraint levels as specified in Annex I of this arrangement will contain the following information:
12. In the event any quantity covered by an export license is not shipped, the Government of the Philippines will notify the Government of Canada of such quantity which may be credited by the Government of the Philippines to the appropriate restraint level.
13. For the purpose of implementing these arrangements, date of export from the Republic of the Philippines will be used to determine within which restraint period any textile or textile products subject to these arrangements will be counted.
14. The Government of the Philippines will endeavour to ensure that exports of all textiles and textile products which are listed in Annex II and are subject to restraint levels as per Annex I are spaced out as evenly as possible during each restraint period, due account being taken of seasonal factors and of normal channels of trade.
15. If, on the basis of export data provided by the Government of the Philippines, the Government of Canada ascertains that there is a sharp and substantial increase in the concentration of exports of textiles or textile products, other than that attributable to normal seasonal factors, it may request consultations in accordance with the provisions of paragraphs 28 and 29 with a view to remedying this situation.
Swing
16. Subject to the specific limitations set out in Annex I, and following notification to the Canadian authorities, any restraint level may be exceeded by the percentage shown in column (E) provided that an equivalent amount is deducted from any other restraint level. When any restraint level is exceeded by the application of swing, the Government of the Philippines will so indicate in subsequent monthly returns.
17. For the purpose of implementing the swing provisions in paragraph 1, the conversion factors shown in Annex I will apply.
Carry-Over/Carry-Forward
18. Following notification to the Government of Canada of the quantities involved, portions of any quantitative limit set out in Annex I which are not used during the restraint period may be carried over and added to the corresponding quantitative limit for the following restraint period within the higher percentage limit set out in column (F) of Annex I.
19. Any restraint level may be increased within the lower percentage limit set out in column (F) of Annex I by an amount advanced from the corresponding restraint level for the following restraint period. The restraint level for any such following restraint period will be reduced by an amount equal to the amount so advanced.
20. Notwithstanding the foregoing, the carry-over/carry-forward provisions may be used in combination only up to the higher percentage limit set out in column (F) of Annex I.
21. Portions of any restraint limit which remain unused from the restraint period 1 January 1981 to 31 December 1981 (as covered by the preceding agreement) may, after notification, be carried over and added to the appropriate restraint level for the restraint period commencing 1 January 1982. Such carry-over will be within the higher percentage limit set out in column (F) of Annex I.
Exchange of Statistics
22. Both Governments will exchange such statistical data relating to exports of textiles and textile products not subject to these arrangements as may reasonably be required.
23. The Government of the Philippines will provide the Government of Canada with monthly statistics relating to exports of the textiles and textile products listed in Annex II which are licensed for export to Canada and debited against restraint levels for each restraint period.
24. When submitting the monthly statistics mentioned in paragraph 23, the Government of the Philippines undertakes to include the following information:
- Category and description of goods as set out in Annex I.
- Original and adjusted restraint level for the restraint period.
- Total quantity issued for the restraint period to date in the units designated in Annex I.
- Notification of any utilization of swing, carry-over or carry-forward provisions and the quantities involved as provided for in paragraphs 16-21 above.
This information should be provided as soon as possible following the end of each month.
25. The Government of Canada will provide the Government of the Philippines with monthly statistics relating to import permits issued for imports originating in the Philippines of the textiles and textile products listed in Annex II and total imports from other suppliers in respect of the products subject to these arrangements.
Equity
26. Should either Government consider, as a result of these arrangements, that it is placed in an inequitable position compared with any third party, that Government may request the other to consult as provided in paragraphs 28 and 29 with a view to implementing appropriate remedial measures.
Re-Exports
27. The Government of Canada will, so far as possible, inform the Government of the Philippines when imports into Canada of textiles and textile products subject to these arrangements are subsequently re-exported from Canada. Where such re-exports have been debited by the Philippine Government to quantitative limits the Government of the Philippines may then credit the amount involved to the appropriate quantitative limits.
Consultations
28. Either Government has the right to request consultations with the other Government on any matter arising from the implementation or operation of these arrangements or on any matter germane thereto. Such consultations will be governed by the following:
29. Any consultations held under these provisions will be approached by both Governments in a spirit of cooperation and with a desire to reconcile the differences between them.
Consultation Levels
30. In view of the desire of both parties to avoid, on the one hand, real risk of market disruption in Canada and, on the other hand, disruption to the trade in textiles and textile products of the Philippines, and having regard to the need for equitable treatment of participating countries in the MFA, the following procedures will apply to those items subject to consultation levels in Annex I.
31. The Government of Canada may request consultations in accordance with the provisions of paragraphs 28 and 29 with a view to reaching agreement on an appropriate specific level of restraint for any textiles or textile products subject to a consultation level whenever, in the view of the Government of Canada, conditions in the Canadian market are such that a limitation on further trade in any such textile or textile products may be necessary to eliminate real risk of market disruption. The Government of Canada undertakes not to seek consultations until such time as exports in any one calendar year of the product concerned have reach the consultation level specified in Annex I. The Government of Canada further undertakes not to seek a restraint at a level less than either 115 percent of the consultation level, or 115 percent of the level or exports in the item during the previous calendar year, whichever level is higher.
32. Until such time as a mutually satisfactory conclusion has been reached, the Government of the Philippines undertakes, if so requested by the Government of Canada, to limit shipments from the date on which Canada requests consultations, in order to ensure that exports of the products in question to Canada do not exceed during that calendar year a level of 115 percent of the exports during the previous year or 115 percents of the consultation level, whichever is higher.
33. In seeking to establish a new restraint a new restraint level for the balance of any calendar year period, the Government of Canada will give full and sympathetic consideration to the treatment of goods for which there are outstanding bona fide contracts and letters of credit.
34. In order to ensure the effective operation of paragraphs 30 to 33 above, the Government of the Philippines undertakes to control the shipment of goods subject to consultation levels by means of the exports control system operated by the Government of the Philippines.
35. The Government of Canada will admit imports of the textiles and textile products of Philippine origin subject to these provisions where such imports satisfy all normal conditions of entry and are accompanied by a copy of a Philippine export license endorsed and issued by the proper Philippine authority.
36. The Government of the Philippines will notify the Government of Canada immediately upon receipt of any application for an export license for any textile or textile product subject to a consultation level in exceptionally large amounts or unusual concentrations, once the consultation level is reached.
MFA Rights
37. Each Government reserves its rights under the MFA with respect to textiles and textile products not subject to these arrangements. For textiles and textile products covered by these arrangements, it is understood that either Government may have recourse to any or all of the provisions of the MFA, save that the Government of Canada waives its rights under Article 3 of the MFA with respect to products subject to specific quantitative limits as per Annex I as long as this MOU remains in effect.
Revisions and Termination
38. Either Government may at any time propose revisions to the terms of these arrangements having regards to the MFA and to the Protocol extending it.
39. Either Government may terminate these arrangements effective at the end of any restraint period by written notice to the other Government, to be given at least ninety days prior to the end of any restraint period.
Annexes
40. The annexes of this Memorandum of Understanding will be considered an integral part of it.
Final Provisions
41. This Memorandum of Understanding will become effective on 1 January 1982 subsequent to an exchange of notes between the two Governments confirming their acceptance of these arrangements.
Manila, the Philippines
November 5, 1981
For the Government of the For the Government of Canada Republic of the Philippines
Entry into Force: January 1, 1982