EU, Brazil Agree on Textile Trade

August 12, 2002

The European Commission and Brazil have finalized a memorandum of understanding which significantly improves access for textile products to each other's markets. The memorandum gives Brazil better access to the European Union by removing the quotas on Brazil's textiles and clothing exports to the EU. In return, Brazil will respect maximum tariff levels and refrain from applying any non-tariff barriers to EU textile and clothing exports.

Both sides also make a best effort commitment to early tariff dismantling in textiles and clothing in the EU-Mercosur negotiations. As part of the package, Brazil also should discontinue the application of an additional tax on textile and clothing imports.

Both agree to refrain from adopting any non-tariff measures which could hinder trade in textile and clothing products. This will address in particular a problem concerning customs valuations in Brazil raised by EU industry.

Additionally, both also agreed to seek, in the context of the EU-Mercosur negotiations, an early elimination of the customs duties applied to textile and clothing products, either upon entry into force or at the latest in the first stage of the industrial tariff dismantling schedule.

In exchange, the EU will suspend quotas for the 10 product categories subject to quotas on a reciprocal basis. The EU will subject the categories currently under quotas to double-checking (surveillance) and will closely cooperate with Brazil to ensure authenticity of origin of its exports to Brazil.

Ten quotas are maintained by the EU with Brazil on cotton yarn, cotton fabrics, synthetic yarn, synthetic fabrics, shirts, T-shirts, trousers, terry towelling, bed linens and table linen. Of these, quotas on denim fabrics were filled in 2001. Brazil is the EU's 11th supplier of denim fabrics ranked by import value.

The EU has concluded similar market access agreements in the form of MOUs with Sri Lanka in 2000 and with Pakistan in 2001. The EU also has concluded textile agreements with Croatia, Bosnia Herzegovina and Ukraine.

More details on the EU's policy concerning the textiles and clothing sector including full details of the quotas can be found at: http://europa.eu.int/comm/trade/goods/textile/index_en.htm.