World Trade Organization

• Author: International Law Group

In the Fall of 1998, the U.S. Department of Commerce, Office of Textiles and Apparel (OTEXA) looked into whether Pakistan was exporting combed cotton yarn to the U.S. in such increased quantities as to cause or threaten serious damage to the domestic industry producing like and/or directly competitive products. The Harmonized Tariff Schedule (HTS) classifies this kind of cotton yarn as Category 301.

The U.S. consulted with Pakistan pursuant to Article 6.7 of the Agreement on Textiles and Clothing (ATC) about such importations in December 1998. Later talks not having resulted in a mutually acceptable resolution, the U.S. imposed a safeguard measure to restrict the quantity of such imports, effective March 17, 1999. In March 2001, the U.S. renewed the quantitative restriction, limiting Pakistan to 5,262,665 kilograms for a one-year period. See 66 Federal Register 13307 (March 5, 2001).

On April 3, 2000, Pakistan asked the WTO to set up a Panel to review the matter. It claimed, among other things, that the U.S. had failed to examine the state of its entire domestic cotton yarn industry, had used improper data, and had failed to consider the impact of Mexican imports. On May 31, 2001, the Panel circulated its report. For the most part, it...