EXCHANGE OF NOTES CONSTITUTING AN AGREEMENT BETWEEN THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA CONCERNING TRADE IN COTTON TEXTILES

Washington, 28 September 1970

LETTERS

DEPARTMENT OF STATE
WASHINGTON

September 28, 1970

Excellency,

I have the honour to refer to the Long Term Agreement regarding International Trade in Cotton Textiles (hereinafter referred to as the Long Term Agreement), done in Geneva on February 9, 1962 as extended by Protocol until September 30, 1973.

I also refer to the recent discussions between our two Governments concerning the export of cotton textiles from India to the United States. As a result of these discussions, I have the honour to propose the following agreement relating to trade in Cotton Textiles between India and the United States :

1. The term of this Agreement shall be from October 1, 1970 through September 30, 1974. During the term of this agreement, the Government of India will limit annual exports of cotton textiles from India to the United States to aggregate , group, and specific limits at the levels specified in the following paragraphs.

2. For the first agreement year, constituting the 12 month period beginning October 1, 1970, the aggregate limit shall be 110 million square yards equivalent.

3. Within this aggregate limit, the following group limits shall apply. For the first agreement year the levels shall be as follows :

Group In Square Yards
Equivalent

I. (Categories 1-27) 84.7 million
II. (Categories 28-64) 25.3 million.

4. Within the aggregate limit and the applicable group limits, the following specific limits shall apply. For the first aggregate year the levels shall be as follows :

Group I                  In Square Yards

Categories 9/10     28,500,000

Categories 18/19       6,000,000
Categories 22     13,600,000
Category 26 (duck only)     7,300,000

Group II   Units               Square Yards
                                    Equivalent

Categories 28/29 5,8000,000
Categories 31       6,000,000 (of which not more than
                               3,000,000 shall be in terry towels)
Categories 34/35 6,5000,000.

5. Within the aggregate limit, the limit for Group I may be exceeded by not more than 10 epr cent and the limit for Group II may be exceeded by not more than 5 per cent. With the applicable group limit, as it may be adjusted under this provision, specific limits may be exceeded by not more than 5 per cent.

6. Within group limits for each group and the following concentration provision, the square yard equilvanet of any shortfalls occuring in exports in the categories given specific limits may be used in any category not given a specific limit. In the event of undue concentration in exports to the United States of cotton textiles from India in :

(a) any category not given specific limit; or

(b) any combed catgegory of any part of merged, combed and carded categories under paragraph 4,

the Government of the United States of America may request consultation with the Government of India to determine an appropriate course of action. Until a mutually satisfactory solution is reached, the Government of India shall limit exports in the category in question to the United States starting with the 12-month period beginning on the date of the request for consultation. This limit shall be 105 per cent of the exports of such products to the United States during the most recent 12-month period preceding the request for consultation for which statistics are available to our two Governments.

7. (a) For any agreement year immediately following a year of a shortfall (i.e., a year in which cotton textiles exports from India to the United States were below the aggregate limit and any group and specific limits applicable to the category concerned, under this agreement or the agreement effected by exchange of notes dated August 31, 1967 the Government of India may permit exports to exceed these limits by carryover in the following amounts and manner :

(i) The carryover shall not exceed the amount of the shortfall in either the aggregate limit or any applicable group or specific limit and shall not exceed either 5% of the aggregate limit or 5% of the applicable group limits in the year of the shortfall; and

(ii) In the case of shortfalls in categories subject to specific limits, the carryover shall be used in the same category in which the shortfall occurred and shall not exceed 5% of the specific limit applicable to the category in the year of the shortfall; and

(iii) In the case of shortfalls not attributable to categories subject to specific limits, the carryover shall be used in the same group in which the shortfall occurred, shall not be used to exceed any applicable specific limit except in accordance with the provisions of paragraph 5 and shall be subject to the provision of paragraph 6 of the Agreement.

(b) The limits referred to in subparagraph (a) of this paragraph are without any adjustments under this paragraph or paragraph 5.

8. In the second and any succeeding 12-month period for which any limitation is in force under paragraphs 1-7 of this Agreement, the level of exports permitted under such limitation shall be increased by 5% of the corresponding level for the preceding 12 month period, the latter level not to include any adjustments under paragraph 5 or 7.

9. The Government of India shall use its best efforts to space exports of cotton textiles from India to the United States within each category evenly throughout the agreement year, taking into consideration normal seasonal factors.

10. The two Governments recognize that the successful implementation of the agreement depends in large part upon mutual cooperation on statistical questions. The Government of the United States of America shall promptly supply the Government of India with data on monthly imports of cotton textiles from India to accordance with the categories listed in Annex A. The Government of India shall promptly supply the Government of the United States of America with data on monthly exports of cotton textiles to the United States, in accordance with the categories listed in Annex A. Each Government agrees to supply promptly any other available relevant statistical data requested by the other Government.

11. Inthe implementation of this agreement, the system of categories and the rates of conversion into square yards equivalent listed in Annex A hereto shall apply. In any situation where the determination of an article to be a cotton textile would be affected byh whether the criterion provided for in Article 9 of the Long Term Agreement is used or the criterion provided for in paragraph 2 of Annex ED of the Long-Term Agreement is used, the chief value criterion used by the Government of the United States of America in accordance with paragraph 2 of Annex E shall apply.

12. The Govenment of the United States of America and the Government of India agree to consult on any question arising in the implementation of this agreement.

13. Mutually satisfactory administrative arrangements or adjustments may be made to resolve minor problems arising in the implementation of this agreement including differences in points of procedure or operation.

14. If the Government of India considers that as a result of limitations specified in this agreement, India is being placed in an inequitable position vis-a-vis a third country, the Government of India may request consultation with the Government of the United States of America with the view to taking appropriate remedial action such as a reasonable modification of this agreement.

15. During the terms of this agreement, the Government of the United States of America will not request restraint on the export of cotton textiles from India to the United States under the procedures of Article 3 of the Long Term Arrangrement to trade in cotton textiles between India and the United States shall otherwise be unaffected by this arrangement.

16. Either Government may terminate this agreement effective at the end of an agreement year by written notice to the other Government to be given at least 90 days prior to the end of such agreement year. Either Government may at any time ropose revisions in the terms of this agreement.

17. Special treatment for hand-loom fabric products of the cotton industry under this agreement is provided for in a separate exchange of notes of this date between the two Governments.

If the foregoing proposal is acceptable to your Government, this note and your Excellency’s note of confirmation on behalf of the Government of India shall constitute an agreement between our Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

For the Secretary of State :
PHILIP H TREZISE

Enclosure
Annex A

His Excellency LAKSHMI KANT JHA
Ambassador of India
ANNEX A

Category Description Unit Conversion factor to Syds

1 Cotton Yarn, carded, singles---------- --------- lbs 4.6
2 Cotton Yard, carded,plied---------- --------- lbs 4.6
3 Cotton Yarn, combed, singles---------- ---------lbs 4.6
4 Cotton Yarn, combed, plied---------- --------- lbs 4.6
5 Gingham, carded ---------- ------------------- ---Syds Not required
6 Gingham, combed---------- --------- Syds Not required
7 Velveteen---------- ------------------- --------- Syds Not required
8 Corduroy---------- ------------------- --------- Syds Not required
9 Sheeting,carded---------- ------------------- -----Syds Not required
10 Sheeting, combed ---------- ------------------- ---Syds Not required
11 Lawns, carded---------- ------------------- --------Syds Not required
12 Lawns, combed---------- ------------------- ------Syds Not required
13 Voile, carded---------- ------------------- ---------Syds Not required
14 Voile, combed---------- ------------------- -------Syds Not required
15 Poplin and Broadcloth, carded---------- ---------Syds Not required
16 Piplin and Broadcloth, combed---------- ---------Syds Not required
17 Typewriter ribbon cloth---------- --------- Syds Not required
18 Print cloth, shirting type 80x80 type,carded Syds Not required
19 Print cloth, shirting type, other than 80x80 Syds Not required
type, carded
20 Shirting, jacquard or dobby, carded Syds Not required
21 Shirting, Jacquard or dobby, combed---------- Syds Not required
22 Twill and sateen, carded---------- --------- Syds Not required
23 Twill and sateen,combed---------- --------- Syds Not required
24 Woven fabric, n.e.s.yarn dyed,carded Syds Not required
25 Woven fabric,n.e.s.yarn dyed,combed Syds Not required
26 Woven fabric, n.e.s.other, carded Syds Not required
27 Woven fabric,n.e.s. other, combed Syds Not required
28 Pillowcases,not ornamented,carded Nos. 1,084
29 Pillowcases,not ornamented, combed Nos. 1,084
30 Towels, dish---------- ------------------- --------- Nos. .348
31 Towels, others---------- --------- Nos. .348
32 Handkerchief,whether or not in the pcs Dozen 1.66
33 Table damash and manufactures lbs 3.17
34 Sheets, carded---------- --------- Nos. 6.2
35 Sheets, combed---------- --------- Nos. 6.2
36 Bedspreads and quilts---------- --------- Nos. 6.9
37 Braided and woven elastic---------- --------- lbs 4.6
38 Fishing net and fish netting---------- --------- lbs 4.6
39 Gloves and mittens---------- ------------------- -Dozen 3.527
40 Hose and half hose---------- -------------          Doz.Prs. 4.6
41 T-shirts, all white, knit, men’s and boys Dozen 7.234
42 T-shirts, other knit---------- -------------------- Dozen 7.234
43 Shirts, knit, other than T shirts and Dozen 7.234
sweatshirts
44 Sweater and cardigans---------- -------------- Dozen 36.8
45 Shirts, dress, not knit, men’s and boys’ Dozen 22.186
46 Shirts, sport, not knit, men’s and boys Dozen 24.457
47 Shirts, work, not knit, men’s and boys Dozen 22.186
48 Raincoats, length orlonger,not knit Dozen 50
49 Coats, other, not knit   Dozen 32.5
60 Trousers, slacks, and shorts (outer),not knit Dozen 17.797
men’s and boys
51 Trousers, slacks and shorts (outer),not knit Dozen 17.797
women’s , girls’ and infants
52 Blouses, not knit    Dozen 14.53
53 Dresses (including uniforms)not knit Dozen 45.3
54 Play suits, sunsuits, washsuits, creepers, Dozen 25.0
rompers, etc, not knit, n.e.s.
55 Dressing gowns including bathrobes and Dozen 51.0
beachrobes, lounging gowns, housecoats, and
dusters, not knit
56 Undershirts, knit,men’s and boys Dozen 9.2
57 Briefs and undershorts, men’s and boys Dozen 11.25
58 Drawers, shorts and briefs, knit n.e.s. Dozen 5.0
59 All other underwear, not knit Dozen 16.0
60 Pajamas and other knitwear Dozen 51.95
61 Brassieres and other body supporting Dozen 4.75
garments
62 Wearing apparel knit, n.e.s. lbs 4.6
63 Wearing apparel, not knit, n.e.s. lbs 4.6
64 All other cotton textiles   lbs 4.6

II
AMBASSADOR OF INDIA
WASHINGTON, D.C.

September 28, 970

Excellency,

I have the honour to refer to your note of September 28, 1970 proposing an agreement relating to rade in cotton textiles between India and the United States.

I confirm, on behalf of the Government of India, that the proposal set forth in your note is acceptable to my Government and that your note and this note in reply shall constitute an agreement between our two Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

L K JHA
Ambassador of India

The Honourable WILLIAM P ROGERS
Secretary of State of the United States of America
Washington, D.C.
RELATED EXCHANGES OF NOTES

I, A
DEPARTMENT OF STATES
WASHINGTON

September 28, 1970

Excellency :

I have the honour to refer to the exchange of notes of today’s date constituting a new bilateral agreement between our two Governments concerning trade in cotton textiles between India and the United States. It is the understanding of my Government that during the terms of the aforementioned agreement, the following provisions will apply to exports from India to the United States of hand-loomed textile products, as defined theein.

I. The provisions of paragraphs 2-8 of the aforementioned agreement shall not apply to exports from India to the United States of hand-loomed textile products which are certified as such by the Government of India, except as provided in subparagraph (a) of this paragraph.

(a) For the 12-month period beginning October 1, 197, the special hand-loomed textile product limit shall be 5,000,000 square yards equivalent, of which not more than 1,000,000 square yards equivalent may be in apparel. For each succeeding 12-month period these levels shall be increased by 5 per cent over the levels for the previous 12-month period. Exports of hand-loomed products in excess of these levels shall be subject to the provisions of paragraphs 2-8.

(b) (i) For an agreement year immediately following a year in which exports of hand-loomed textile products were below the special hand-loomed textile product limit, exports of such products under this paragraph may exceed the special hand-loomed textile product limit by 5 per cent of the limit for the preceding agreement year of the amount by which exports were below that limit, whichever is less.

(ii) Within the carryover permitted by subparagraph (b) (i), exports of hand-loomed textile apparel may exceed the sub-limit on apparel by 5 per cent of the apparel sub-limit for the preceding agreement year or the amount by which such exports were below that limit, whichever is less.

(c) In the event the Government of India wishes to permit exports in excess of the limits provided for in this paragraph (and not subject to the provisions of paragraphs 2-8) of any hand-loomed textile product items which it considers to be non-distruptive of the United States market, the Government of India shall request consultations with the Government of the United States of America on this question and the Government of the United States of America shall enter into such consultations. Until agreement on a different level of exports is reached, the Government of India shall limit its exports of hand-loomed textile products concerned to the amounts permitted under the provisions of sub-paragraph (a) of this paragraph.

(d) “Hand-loomed textile products” means textile products cut, sewn and otherwise, fabricated by hand from hand-loom fabrics in cottages units of the cottage industry.

2. The arrangements contained in this note shall not effect the applicability of the aforementioned agreement to hand-loomed textile products, except as stated in paragraph I above.

If the foregoing confirms with the understanding of your Government this note and your Excellency’s note in reply shall constitute an agreement between our two Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

For the Secretary of State :
PHILIP H TREZISE

His Excellency LAKSHMI KANT JHA
Ambassador of India

------
II, a
AMBASSADOR OF INDIA
WASHINGTON, D.C.

September 28th, 1970

Excellency,

I have the honour to refer your note of today’s date concerning special provisions that will apply to exports from India to the United States of hand-loomed textile products, as defined therein, during the terms of the agreement relating to the trade in cotton textiles between India and the United States effected by exchange of notes dated September 18, 1970.

I confirm, on behalf of my Government, that the provisions set forth in your note conform with the understanding of the Government of India and that your note and this note in reply shall constitute an agreement between our two Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

L.K. JHA
Ambassador of India

The Honourable WILLIM P ROGERS
Secretary of State of the United States of America,
Washington, D.C.

--------

I, b
DEPARTMENT OF STATE
WASHINGTON

September 28, 1970

Excellency,

I have the honour to refer to the exchange of notes of today’s date constituting a new bilateral agreement between the Governments of the United States and India concerning exports of cotton textiles from India to the United States.

It is the understanding of the Government of the United States of America that ‘India items’, certified as such by the Government of India, shall be excluded from the purview of the aforementioned agreement. A definition of the term ‘India items” and a list of these items and their definitions are annexed to this note. Additional items may be added to the list of “India items” by mutual agreement. In the event that the Government of the United States of America finds that any particular products imported from India as “India items” should not properly be classified as such, the Government of the United States of America may request consultations with the Government of India with a view to finding the appropriate classification with the Government of India with a view of finding the appropriate classification of the products in question within Annex A of the aforementioned agreement, taking into consideration the special treatment for hand-loomed textile products referred to in paragraph 17 of that agreement.

The Government of India grees that it will promptly supply to the Government of the United States monthly data on actual shipments and quarterly estimates of prospective shipments of “India items”. If the Government of the United States of America considers that shipments of any India item or items may raise problems related to the disruption of the United States marked for cotton textiles, it may request consultation with the Government of India to determine an appropriate course of action. Until a mutually satisfactory solution is reached, exports from India to the United States of the India item or items in question shall be limited for the 12-month period beginning on the date of the request for consultation. The limit shall be 105 per cent of the exports of such items from India to the United States during the most recent 12 month period preceding the request for consultations for which statistics are available to the two Governments.

If the foregoing proposal is acceptable to your Government, this note and your note of confirmation shall constitute an agreement between our two Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

For the Secretary :
PHILIP H TREZISE

Enclosure :
Annex A

His Excellency Lakshmi Kant Jha
Ambassador of India
-------

ANNEX A

“India items” are those items that are uniquely and historically traditional Indian products cut, sewn or otherwise fabricated by hand in cottages, units of the cottage industry. They are limited to the products enumerated below and such other items as may be agreed upon from time to time.

----------

II, b
AMBASSADOR OF INDIA
WASHINGTON, D.C.

September 28, 1970

Excellency,

I have the honour to refer to your note of today’s date concerning exclusion of “Indian items”, as defined theein, from the purview of the agreement relating to trade in cotton textiles between India and the United States effected by exchange of notes dated September 28, 1970.

I confirm, on behalf of my Government, that the understanding set forth in your note confirms with the understanding of the Government of India and that your note and this note in reply shall constitute an agreement between our two Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

L K JHA
Ambassador of India

The Honourable WILLIAM P ROGERS
Secretary of State of the United States of America
Washington, D.C.

--------
I, c
DEPARTMENT OF STATE
WASHINGTON

September 28, 1970

Excellency,

I have the honour to refer to the exchange of notes of today’s date constituting a new bilateral agreement between the Governments of the United States of America and India concerning exports of cotton textiles from India to the United States. During the term of the aforementioned agreement, the procedures set forth below will be followed by the Government of the United States of America to assit the Government of India in implementing the limitation provisions of that Agreement.

It is agreed that prompt exchange of data will permit consultations to help avoid shipments in excess of agreement limitations. If on the basis of its import data and the data provided by the Government of India the Government of the United States of America considers there is a possibility that exports of cotton textile products from India to the United States will exceed the limitations provided for in the aforementioned agreement, the United States will enter into consultations with the Govenment of India. On the basis of the consultations, the United States may request the Government of India to take appropriate steps to avoid shipments in excess of the agreement limitations. If the Government of the United States of America is satisfied that actions taken by the Government of India will prevent shipments in excess of limitations, it will not impose import controls. If the Government of the United States of America finds it necessary to control imports, it will take into account the effect on shipments already exported from India. Under the normal circumstances, the Government of the United States of America will permit entry of goods already exported if agreement is reached with the Governmnet of India on the treatment to be accorded to exports in excess of limitations provided for in the aforementioned agreement.

If the Government of the United States of America has reason to believe the foregoing exchange of information and procedures does not provide adequate safeguards against shipments substantially in excess of limitations, it mayh take such appropriate action as it deems necessary to protect its interests.

If the Government of the United States of America considers that shipments from India have already exceeded the limitations provided for in the agreement, it will request, that the Government of India will promptly enter into, consultations. Should the United States consider that failure to impose import controls promptly would cause damage difficult to repair, the Government of the United States of America may impose import controls after notifying the Government of India. The Government of the United States of America will give the Government of India as much advance notification as it considers possible.

If the Governments agree that the use of import controls results in any limitations not being filled by the Government of India, the agreed shortfall may be used as additional carryover in the subsequent year of the agreement.

If the foregoing conforms with the understanding of your Government, this note and your Excellency’s note in reply shall constitute an agreement our two Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

For the Secretary of State :
PHILIP H TREZISE

His Excellency LAKSHMI KANT JHA
Ambassador of India

------

II, c
AMBASSADOR OF INDIA
WASHINGTON, D.C.

September 28, 1970

Excellency :

I have the honour to refer to your note of today’s date setting forth procedures that will be followed byh the Government of the United States of America to assist the Government of India in implementing the limitation provisions of the agreement relating to trade in cotton textiles between India and the United States effected by exchange of notes dated September 28, 1970.

I confirm on behalf of my Government that the procedures set forth in your note conform with the understanding of the Government of India and that your note and this note in reply shall constitute an agreement between our two Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

L.K. JHA
Ambassador of India

The Honourable William P ROGERS
Secretary of State of the United States of Amercia
Washington, D.C.
-------------

I, d
DEPARTMENT OF STATE
WASHINGTON

September 28, 1970

Excellency,

I have the honour to refer to the agreement concerning trade in cotton textiles between India and the United States effected by exchange of notes dated August 31, 1967 and to the successor to that agreement, effected by exchange of notes of today’s date.

I refer to dicussions between representatives of our two Governments concerning the question of exports of cotton textiles from India to the United States that were in excess of limitations provided for in the agreement of August 31, 1967. I confirm, on behalf of my Government that the following agreement has been reached to resolve this question :

1. The Government of India will deduct 4.63 million square yards equivalent from the level of the aggregate limit for the present agreement year, constituting the 12-month period beginning October 1, 1969. In applying this deduction, thelevel of each limit for the present agreement year will be the same as the level applicable to the agreement year beginning October 1, 1968.

2. The Government of India will make every effort to avoid exceeding the export limitations applicable to the present agreement year, as adjusted in accordance with paragraph 1 above. The Government of India grees to constitute for the remainder of the present agreement year its selective limitation on exports ot the United States of cotton textiles in Group II, exclusive of hand-loomed textile products of the cottage industry. However, should cotton textile exports from India to the United States during the present agreement year exceed these limitations, such export will be permitted entry and will be counted against the applicable limits for the agreement year beginning October 1, 1970. United States import data will be used for purposes of this paragraph in determining thelevel of cotton textile export from India to the United States during the present agreement year. The Government of the United States of America awill take into account any data which the Government of India is able to supply.

If the foregoing conforms with your understanding, this note and your note in reply on behalf of the Government of India will constitute an agreement our two Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

For the Secretary of State :
PHILIP H TREZISE

His Excellency LAKSHMI KANT JHA
Ambassador of India

------

II, d
AMBASSADOR OF INDIA
WASHINGTON, D.C.

September 28, 1970

Excellency :

I have the honour to refer to your note of today’s date concerning arrangements for resolving the question of export of cotton textiles from India to the United States that were in excess of limitations provided for in the agreement regarding trade in cotton textiles between India and the United States effected by exchange of notes dated August 31, 1967.

I confirm that the arrangements set forth in your note conform with the understanding of the Government of India and that your note and this note in reply shall constitute an agreement between our two Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

L.K. JHA
Ambassador of India

The Honourable William P ROGERS
Secretary of State of the United States of Amercia
Washington, D.C.

September 28, 1970

Excellency,

If the foregoing conforms with your understanding, this note and your note in reply on behalf of the Government of India will constitute an agreement our two Governments.

Accept, Excellency, the renewed assurances of my highest consideration.

For the Secretary of State :
PHILIP H TREZISE

His Excellency LAKSHMI KANT JHA
Ambassador of India

------

II, d
AMBASSADOR OF INDIA
WASHINGTON, D.C.

September 28, 1970

Excellency :

Accept, Excellency, the renewed assurances of my highest consideration.

L.K. JHA
Ambassador of India

The Honourable William P ROGERS
Secretary of State of the United States of Amercia
Washington, D.C.