TNAG-0627-FCO40-775-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1977 — Page 235

2. The Textile Surveillance Body (TSB)

Background Note

Article 11 of the MFA established a Textiles Surveillance Body to "supervise the implementation" of the MFA and to carry out the function required of it by the other Articles. The TSB consists of eight (national) members appointed by the parties to the MFA on a basis decided by the Textiles Committee. Article 10.4 of the MFA requires the TSB to review the operation of the MFA and report to the GATT Council. The TSB was originally envisaged as a Council of 'wise men where conciliation was to be the key note. In practice recent rulings by the TSB have shown a tendency to adopt individual national positions rather than to act as a conciliatory body. This tendancy, if not curbed, could damage the TSB's image of impartiality and could increase the pressures on the governments of the developed countries to take action outside the MFA.

Phasing-out

A bilateral textiles agreement between the EEC and Hong Kong, under Article 4 of the MFA, largely replaced the individual textile arrangements of individual Member States. The pre-existing UK restrictions on items not now covered by Article 4 agreements were included in Community programmes of phased elimination under Article 2 of the MFA leading to liberalisation on 31 March 1977. The Textile Surveillance Body criticised the Community's phasing-out programmes for Hong Kong, Pakistan and India as being contrary to Article 2 of the MFA, and recommended that the EEC review its phasing-out programme promptly and at least report on the outcome of the review by 31 December 1976. UK Ministers (Industry and Trade) agreed before Christmas to the removal of restrictions on a number of items. The Community has now notified the TSB that, while not accepting the TSB's criticism of the legality of the phasing out programme, it has neverthe- less reviewed the Community's programme and, as a result, all UK restraints (except for the single exception of cotton yarn not put up for retail sale) on items not now covered in the EEC/Hong Kong Agreement are liberalised with effect from 1 January 1977.