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February 24, 1964

Note: The Agreement entered into force, February 24, 1964.

Excellency:

I have the honor to refer to recent discussions in Manila and Washington between representatives of the Government of the United States of America and the Government of the Republic of the Philippines concerning trade in cotton textiles between the Philippines and the United States.

As a result of these discussions I have the honor to propose the following Agreement relating to trade in cotton textiles between the Philippine and the United States.

1. The Governments recognize that substantially all the exports of cotton textiles from the Philippines to the United States in categories 52, 53, 54, 59,and 63 consist of infants' wear produced by the Philippine cottage industry and traditionally part of the special United States Philippine cotton textile trade. The Governments agree that the annual levels of these "traditional trade" categories have most recently approximated the following pattern:

His Excellency
Amelito R. Mutuc,
Ambassador of the Philippines.

2. In the event the Government of the Republic of the Philippines desires to permit exports in the traditional trade categories enumerated in paragraph 1 to exceed in any calendar year 110 percent of the levels of traditional trade enu merated in paragraph 1(as adjusted pursuant to paragraph 7), it shall so notify the Government of the United States. Upon receipt of such notification, the Government of the United States may request consultations on the matter if, in its view, the proposed export levels would constitute an undue concentration of trade threatening to cause a disruption of the United States market in these cate- gories. The Government of the United States shall accompany its request for consultations with detailed information on the condition of the United States market in the category or categories in question. The Government of the Republic of the Philippines shall agree to enter into such consultations, and during the course thereof the Government of the Republic of the Philippines shall limit its exports on an annual basis in the categories in question to 110 percent of the level of traditional trade enumerated in paragraph 1(as adjusted pursuant to paragraph 7).

3. During calendar year 1964, the Government of the Republic of the Phil- ippines shall limit its exports to the United States in all categories of cotton textiles, except those enumerated in paragraph 1, to an aggregate limit of 15.5 mil- lion square yards equivalent.

4. Within the aggregate limit specified in paragraph 3 the following specific ceilings shall apply:

5. Within the aggregate limit specified in paragraph 3,export in category 45 shall not exceed 30,000 dozen in any calendar year.

6. The square yard equivalent of any shortfalls in categories given a specific ceiling in paragraphs 4 and 5 may be used in any category not given a specific ceiling and not enumerated in paragraph 1. Annual exports in categories not given a specific ceiling and not enumerated in paragraph 1 shall not exceed 350,000 square yards equivalent except by mutual agreement of the two Governments.

7. The limitations on exports established by paragraphs 3, 4, and 6 and the levels of traditional trade categories enumerated in paragraph 1 shall be raised by 5 percent for calendar year 1965 and, on a cumulative basis, for each subsequent calendar year.

8. With the exception of seasonal items, the Government of the Philippines shall space its annual exports of cotton textiles to the United States as evenly as may be practicable in each calendar year.

9. In the event concentration of exports from the Philippines to the United States of apparel items made of a particular fabric not of United States origin causes or threatens to cause market disruption in the United States, the Government of the United States may call for consultations with the Government of the Republic of the Philippines in order to reach a mutually satisfactory solution to the problem. The Government of the Philippines shall agree to enter into such consultations, and, during the course thereof, shall limit its exports of the item in question to an annual level of 105 percent of its exports of that item during the 12-month period immediately preceding the month in which consultations are requested.

10. Each Government agrees to supply promptly any available statistical data requested by the other Government. In the implementation of this Agreement, the system of categories and the factors of conversion into square yards equivalent set forth in the Annex hereto shall apply.

11. For the duration of this Agreement, the Government of the United States shall not limit the importation of cotton textiles from the Philippines to levels lower than those provided in this Agreement.

12. The Governments agree to consult on any question arising in the implementation of this Agreement.

13. The Governments agree that this Agreement, while governing trade in cotton textiles, does not prejudice any interpretations by either Government of the Agreement between the United States and the Philippines Concerning Trade and Related Matters signed at Washington on September 6, 1955.

14. This Agreement shall continue in force through December 31, 1967, provided that either Government may propose revisions in the terms of the Agreement no later than 90 days prior to the beginning of a new 12-month period. Either Government may terminate this Agreement effective at the end of calendar year 1965 or 1966 by written notice to the other Government given at least 90 days prior to the end of either calendar year; provided that such termination shall not operate to prejudice the ability of the Philippines to export cotton textiles to the United States in amounts preserving its proportionate share of the United States market as represented by the levels specified in this Agreement for the calendar year in which the Agreement is terminated.

I have further the honor to request you to be good enough to confirm the foregoing understandings on behalf of the Government of the Republic of the Philippines,

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

For the Secretary of State:

SGD. G. GRIFFITH JOHNSON

Enclosure:

Annex.

SQUARE YARD EQUIVALENT CONVERSION FACTORS BY CATEGORY

Excellency

I have the honor to acknowledge receipt of your note of today's date concerning trade in cotton textiles between the Republic of the Philippines and the United States which reads as follows:

"Excellency:

"I have the honor to refer to recent discussions in Manila and Washington between representatives of the Government of the United States of America and the Government of the Republic of the Philippines concerning trade in cotton textiles between the Philippines and the United States.

"As a result of these discussions I have the honor to propose the following agreement relating to trade in cotton textiles between the Philippines and the United States:

"1. The Governments recognize that substantially all the exports of cotton textiles from the Philippines to the United States in categories 52, 53, 54, 59, and 63 consist of infants' wear produced 1 For purposes of converting dozens into pounds under the United States cotton textile classification system, the factor to be used is 1.74. by the Philippine cottage industry and traditionally part of the special United States-Philippine cotton textile trade. The Governments agree that the annual levels of these "traditional trade" categories have most recently approximated the following pattern:

Category 52	25,000 dozen
Category 53	410,000 dozen
Category 54	75,000 dozen
Category 59	130,000 dozen
Category 63	860,000 dozen
	________________
Total	1,500,000 dozen

 

"2. In the event the Government of the Republic of the Philippines desires to permit exports in the traditional trade categories enumerated in paragraph 1 to exceed in any calendar year 110 percent of the levels of traditional trade enumerated in paragraph 1 (as adjusted pursuant to paragraph 7), it shall so notify the Government of the United States. Upon receipt of such notification, the Government of the United States may request consultations on the matter if, in its view, the proposed export levels would constitute an undue concentration of trade threatening to cause a disruption of the United States market in these categories. The Government of the United States shall accompany its request for consultations with detailed information on the condition of the United States market in the category or categories in question. The Government of the Republic of the Philippines shall agree to enter into such consultations, and during the course thereof the Government of the Republic of the Philippines shall limit its exports on an annual basis in the categories in question to 110 percent of the level of traditional trade enumerated in paragraph 1 (as adjusted pursuant to paragraph 7).

"3. During calendar year 1964, the Government of the Republic of the Philippines shall limit its exports to the United States in all categories of cotton textiles, except those enumerated in paragraph 1, to an aggregate limit of 15.5 million square yards equivalent.

"4. Within the aggregate limit specified in paragraph 3 the following specific ceilings shall apply:

Category 32	3,150,000 dozen
Category 39	125,000 dozen pair
Category 50	15,000 dozen
Category 51	15,000 dozen
Category 60	7,000 dozen
Category 61	1,200,000 dozen
Category 64	152,175 lbs.

"5. Within the aggregate limit specified in paragraph 3, exports in category 45 shall not exceed 30,000 dozen in any calendar year.

"6. The square yard equivalent of any shortfalls in categories given a specific ceiling in paragraphs 4 and 5 may be used in any category not given a specific ceiling and not enumerated in paragraph 1. Annual exports in categories not given a specific ceiling and not enumerated in paragraph 1 shall not exceed 150,000 square yards equivalent except by mutual agreement of the two Governments.

"7. The limitations on exports established by paragraphs 3, 4 and 6 and the levels of traditional trade categories enumerated in paragraph 1 shall be raised by 5 percent for calendar year 1965 and, on a cumulative basis, for each subsequent calendar year.

"8. With the exemption of seasonal items, the Government of the Philippines shall space its annual exports of cotton textiles to the United States as evenly as may be practicable in each calendar year.

"9. In the event concentration of exports from the Philippines to the United States of apparel items made of a particular fabric not of United States origin causes or threatens to cause market disruption in the United States, the Government of the United States may call for consultations with the Government of the Republic of the Philippines in order to reach a mutually satisfactory solution to the problem. The Government of the Philippines shall agree to enter into such consultations, and, during the course thereof, shall limit its exports of the item in question to an annual level of 105 percent of its exports of that item during the 12-month period immediately preceding the month in which consultations are requested.

"10. Each Government agrees to supply promptly any available statistical data requested by the other Government. In the implementation of this Agreement, the system of categories and the factors for conversion into square yards equivalent set forth in the Annex hereto shall apply.

"11. For the duration of this Agreement, the Government of the United States shall not limit the importation of cotton textiles from the Philippines to levels lower than those provided in this Agreement,

"12. The Governments agree to consult on any question arising in the implementation of this Agreement.

"13. The Governments agree that this Agreement, while governing trade in cotton textiles, does not prejudice any interpretations by either Government of the Agreement between the United States of America and the Republic of the Philippines Concerning Trade and Related Matters signed at Washington on September 6, 1955.

"14. This Agreement shall continue in force through December 31, 1967, provided that either Government may proposed revisions in the terms of the Agreement no later than 90 days prior to the beginning of a new 12-month period. Either Government may terminate this Agreement effective at the end of calendar years 1965 or 1966 by written notice to the other Government given at least 90 days prior to the end of either calendar year: provided that such termination shall not operate to prejudice the ability of the Philippines to export cotton textiles to the United States in ampunts preserving its proportionate share of the United States market as represented by the levels specified in this Agreement for the calendar year in which the Agreement is terminated.

"I have further the honor to request you to be good enough to confirm the foregoing understandings on behalf of the Government of the Republic of the Philippines.

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

I have further the honor to confirm the foregoing understanding on behalf the Government of the Republic of the Philippines.

Accept, Excellency, the renewed assurances of my highest consideration, Enclosure:

Copy of Annex
to United States Note,

DEPARTMENT OF STATE
WASHINGTON

February 24, 1964

Dear Mr. Ambassador:

During the discussions between the representatives of the Government of the United States and of the Government of the Philippines concerning the bila- teral Agreement on trade in cotton textiles effected by the Exchange of Notes today, the Philippine Delegation pointed out that specific ceilings on exports of infants' wear in categories 52, 53, 54, 59, and 63 might raise special problems because of the unique nature of this trade. As an example, the Government of the Republic of the Philippines showed that substantial changes in the nature of the United States infants wearing apparel market occurred several years ago.

The effect of this alteration was to shift the trade from one United States cotton textile category to several others without causing market disruption.

With these problems in mind, the United States representatives assured the Philippine representatives that, provided Philippine exports would not exceed 110 percent of the aggregate level of "traditional trade" in the categories enumerated in paragraph 1 of the Agreement (as adjusted pursuant to paragraph 7), the Government of the United States would have no objection and would not desire consultations if the Government of the Republic of the Philippines permitted individual category levels to be exceeded by 10 percent of the individual levels in paragraph 1 in addition to the 10 percent increase in these levels permitted by paragraph 2.

The United States Government shall agree, except in unusual circumstances, to reasonable rearrangements of levels within the aggregate of the five categories to meet difficulties of Philippine exporters arising from a shift among the five categories in the overall United States demand from all sources for infants' wear. I should be grateful if you would confirm that these understandings are acceptable to your Government.

Sincerely yours,

For the Secretary of State:
SGD./ G. GRIFFITH JOHNSON

His Excellency
Amelito R. Mutuc,
Ambassador of the Philippines.

February 24, 1964

(Confidential)

Dear Mr. Secretary;

I acknowledge receipt of your letter of this date which reads as follows:

"During the discussions between representatives of the Government of the United States and of the Government of the Republic of the Philippines concerning the bilateral Agreement on trade in cotton textiles effected by the Exchange of Notes today, the Philippine Delegation pointed out that specific ceilings on exports of infants' wear in categories 52, 53, 54, 59, and 63 might raise special problems because of the unique nature of this trade. As an example, the Government of the Republic of the Philippines showed that substantial changes in the nature of the United States infants' wearing apparel market occurred several years ago. The effect of this alteration was to shift the trade from one United States cotton textile category to several others without causing market disruption.

"With these problems in mind, the United States representatives as- sured the Philippine representatives that, provided Philippine exports would not exceed 110 percent of the aggregate level of "traditional trade" in the categories enumerated in paragraph 1 of the Agreement (as adjusted pursuant to paragraph 7) the Government of the United States would have no objection and would not desire consultations if the Government of the Republic of the Philippines permitted individual category levels to be exceeded by 10 percent of the individual levels in paragraph 1 in addition to the 10 percent increase in these levels permitted by paragraph 2.

"The United States Government shall agree, except in unusual circum- stances, to reasonable rearrangements of levels within the aggregate of the five categories to meet difficulties of Philippine exporters arising from a shift among the five categories in the overall United States demand from all sources tor infants' wear.

"I should be grateful if you would confirm that this understandings are acceptable to your Government."

I wish to confirm on behalf of my Government the understandings set forth in your letter.

Sincerely yours,

His Excellency
Dean Rusk
The Secretary of State
of the United States
Washington 25, D.C.

DEPARTMENT OF STATE
WASHINGTON

February 24, 1964

Dear Mr. Ambassador;

With reference to paragraph 5 of the Agreement between the Government of the Republic of the Philippines and the Government of the United States of America concerning trade in cotton textiles between the Philippines and the United States effected by the Exchange of Notes today, the Government of the Philippines, pursuant to that paragraph, has agreed to limit its 1964 exports in category 45 to 30,000 dozens. I wish to state the understanding of my Government that this level for category 45 shall not become effective until April 1, 1964. At that time, category 45 goods from the Philippines held in bonded warehouse in the United States shall be charged, upon release by the United States Bureau of Customs, against the 1964 export level for category 45 regardless of when these goods were exported from the Republic of the Philippines.

The amount of these goods is estimated to be approximately 12,500 dozens. In the event the final determination of the amount of these goods exceeds 12,500 dozens, the Government of the United States shall request consultations with the Government of the Republic of the Philippines to seek some appropriate adjustment.

I should be grateful if you would confirm that this understanding is ac- ceptable to your Government.

Sincerely yours,

For the Secretary of State:
SGD./ G. GRIFFITH JOHNSON

His Excellency
Amelito R. Mutuc,
Ambassador of the Philippines.

February 24, 1964

Dear Mr. Secretary:

I acknowledge receipt of your letter of this date which reads as follows: Dear Mr, Ambassador:

With reference to paragraph 5 of the Agreement between the Government of the Republic of the Philippines and the Government of the United States of America concerning trade in cotton textiles between the Philipines and the United States effected by the Exchange of Notes today, the Government of the Philippines, pursuant to that paragraph, has agreed to imits 19-64 exports in category 45 to 30,000 dozens. I wish to state the understanding of my Government that this level for category 45 shall not become effective until April 1, 1964. At that time, category 45 goods from the Philippines held in bonded warehouse in the United States shall be charged, upon release by the United States Bureau of Customs, against the 1964 export level for category 45 regardless of when these goods were exported from the Republic of the Philippines, The amount of these goods is estimated to be approximately 12,500 dozens. In the event the final determination of the amount of these goods exceeds 12,500 dozens, the Government of the United States shall request consultations with the Gov- ernment of the Republic of the Philippines to seek some appropriate ad- justment.

I should be grateful if you would confirm that this understanding is acceptable to your Government.

I wish to confirm on behalf of my Government the understanding set forth in your letter.

Sincerely yours,

SGD./ AMELITO R. MUTUC
Ambassador

His Excellency
Dean Rusk
The Secretary of State
of the United States of America
Washington 25, D.C.