Voluntary Report - public distribution

**Date:** 10/20/2006

**GAIN Report Number:** E36133

E36133

**EU-25**

**Trade Policy Monitoring**

**EU safeguard trigger volume calculations for fruit and vegetables -
revised**

**2006**

**Approved by:**

![](media/image1.wmf)Debra Henke

U.S. Mission to the European Union

**Prepared by:**

Celsa Monrós

**Report Highlights:**

The Commission Regulation (EC) No 1242/2006 of 17 August 2006 (amending
Regulation (EC) No 1555/96) introduced some changes on the rules of
application for additional import duties on fruit and vegetables.
Additionally, some safeguard trigger volumes for certain products are
updated. This report explains the mechanism for updating the trigger
volumes and comments the amendment on the trigger conditions.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Brussels USEU \[BE2\]

\[E3\]

# THE EU FRUIT AND VEGETABLE IMPORT SYSTEM

Within the current framework of the Fruit and Vegetable Common Market
Organization, EU import measures include an entry price system, a
special safeguard provision, tariff rate quotas, as well as sanitary and
phytosanitary measures. All these measures were established after the
1995 Uruguay Round Agreement on Agriculture (AoA).

# Entry Prices (Commission Regulation (EC) No 3223/94 and [**1719/2005**](http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2005/l_286/l_28620051028en00010886.pdf))

The EU entry price system is a tariffication of the previous reference
price system. It applies to a certain period, for a certain list of
products (tomatoes, cucumber, gherkins, artichokes, courgettes, oranges,
mandarins, lemons, table grapes, apples, pears, quinces, apricots,
cherries, peaches, plums, sloes, fruit juices and wine).

When a product's import price is equal or higher than the fixed EU entry
price, an ad valorem duty is applied. When the import price is lower
than the fixed entry price, a tariff equivalent is added to the ad
valorem duty.

**Additional Import Duty** (Commission Regulation (EC) No
[1555/96](http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=31996R1555&model=guicheti))

Additional import duties are levied on imports when the import volume
exceeds a "trigger volume." In the case of products containing added
spirits or sugar (HS 20083019, 20089921 and 20099071), additional import
duties are levied when the import price falls below an established
trigger price. The safeguard clause is only applicable to products
already subject to the "Maximum Tariff Equivalent," which is the maximum
countervailing charge that can be levied. In most cases, the additional
import duty is equal to 1/3 Maximum Tariff Equivalent + 1/3 normal ad
valorem duty.

**Quotas**

For some products, (i.e. garlic, carrots and turnips, cucumbers, sweet
peppers, dried onions, manioc, sweet potatoes, almonds, bananas, citrus,
table grapes, apples, pears, apricots, cherries) there is a system of
tariff quotas for specific countries.

# TRIGGER VOLUME CALCULATIONS

According to the Uruguay Round Agreement on Agriculture, the trigger
level is based on market access defined by imports as a percentage of
the corresponding domestic consumption during the [three preceding
years]{.underline}:

\(a\) where such market access opportunities for a product are less than
or equal to 10 percent, the base trigger level shall equal 125 percent;

(b) where such market access opportunities for a product are greater
    than 10 percent but less than or equal to 30 per cent, the base
    trigger level shall equal 110 percent;

(c) where such market access opportunities for a product are greater
    than 30 percent, the base trigger level shall equal 105 percent.

As import and consumption data are continuously revised, trigger volumes
are periodically recalculated following the WTO procedure. For the
European Union, the updated trade data published by EUROSTAT
([Comext](http://fd.comext.eurostat.cec.eu.int/xtweb/)) are typically
released in the month just before the start of the trigger period, which
coincides with the European production season of each product:

+----------------------------+---------------------+------------------+
| ### Description            | **Trigger period**  | **Update**       |
+----------------------------+---------------------+------------------+
| Tomatoes                   | 1 Oct. to 31 May    | S                |
|                            |                     | eptember/October |
+----------------------------+---------------------+------------------+
|                            | 1 June to 30 Sept.  | May              |
+----------------------------+---------------------+------------------+
| Cucumbers                  | 1 May to 31 Oct.    | April/May        |
+----------------------------+---------------------+------------------+
|                            | 1 Nov. to 30 April  | October          |
+----------------------------+---------------------+------------------+
| Artichokes                 | 1 Nov. to 30 June   | October          |
+----------------------------+---------------------+------------------+
| Courgettes                 | 1 Jan. to 31 Dec.   | December         |
+----------------------------+---------------------+------------------+
| Oranges                    | 1 Dec. to 31 May    | October          |
+----------------------------+---------------------+------------------+
| Clementines                | 1 Nov. to end of    | October          |
|                            | Feb.                |                  |
+----------------------------+---------------------+------------------+
| Mandarins                  | 1 Nov. to end of    | October          |
|                            | Feb.                |                  |
+----------------------------+---------------------+------------------+
| Lemons                     | 1 June to 31 Dec.   | May              |
+----------------------------+---------------------+------------------+
|                            | 1 Jan. to 31 May    | December         |
+----------------------------+---------------------+------------------+
| Table grapes               | 21 July to 20 Nov.  | May              |
+----------------------------+---------------------+------------------+
| Apples                     | 1 Jan. to 31 Aug.   | December         |
+----------------------------+---------------------+------------------+
|                            | 1 Sept. to 31 Dec.  | August           |
+----------------------------+---------------------+------------------+
| Pears                      | 1 Jan. to 30 April  | December         |
+----------------------------+---------------------+------------------+
|                            | 1 July to 31 Dec.   | May              |
+----------------------------+---------------------+------------------+
| Apricots                   | 1 June to 31 July   | May              |
+----------------------------+---------------------+------------------+
| Cherries                   | 21 May to 10 Aug.   | April/May        |
+----------------------------+---------------------+------------------+
| Peaches, including         | 11 June to 30 Sept. | May              |
| nectarines                 |                     |                  |
+----------------------------+---------------------+------------------+
| Plums                      | 11 June to 30 Sept. | May              |
+----------------------------+---------------------+------------------+

#### 

#### CHANGES IN THE TRIGGER CONDITIONS FOR THE SAFEGUARD CLAUSE

Commission Regulation (EC) No
[[1242/2006]{.underline}](http://eur-lex.europa.eu/LexUriServ/site/en/oj/2006/l_226/l_22620060818en00070008.pdf)
of 17 August 2006 (amending Regulation (EC) No
[1555/96](http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=31996R1555&model=guicheti)
on rules of application for additional import duties on fruit and
vegetables) introduced some changes, which appear to provide some
greater flexibility in the triggering mechanism of the safeguard.
Specifically, in Article 3.1, the trigger condition has been modified.
Under EC 1555/96, "If it is found that the quantity imported (...)
exceeded (...) the trigger level (...), the Commission shall impose an
additional duty." Under the new provisions of EC 1242/2006, "If it is
found that, for one of the products (...) the quantity put into free
circulation exceeds the corresponding triggering volume the Commission
shall levy an additional duty **[unless]{.underline}** the imports are
unlikely to disturb the Community market, or the effects would be
disproportionate to the intended objective."

This amendment allows for the possibility of not implementing the
safeguard measures even though a trigger volume has been exceeded.

**EXAMPLE: EU TRIGGER VOLUMES FOR APPLES**

After the "apple crisis" of 2005, the French government asked the
European Commission to reevaluate the trigger conditions for the special
safeguard clause.

Although the European Commission ruled out the option of changing the
conditions for safeguard measures, the Commission suggested that some
market problems could have resulted from the lack of timely (and
adequate) import data. The European Commission promised to conduct
closer monitoring of imports during the 2006 campaign, and subsequently
established a temporary system of import licenses for apples. This
temporary system will disappear when the new foreseen custom system came
into force. The Commission is expected to launch an electronic custom
system (System II) in January 2007, which will register the entry of all
commodities. Both data procedures will run together until the new method
proves its reliability. The collected [import
data](http://ec.europa.eu/agriculture/markets/fruitveg/appleimports/monitor.pdf)
is regularly reported on the European Commission website. The Commission
also committed itself to provide
[data](http://ec.europa.eu/agriculture/consultations/adco/fruitveg/pom.pdf)
on production, prices, import, exports and market measures (i.e.
withdrawals) (See GAIN Report
[E36009](http://www.fas.usda.gov/gainfiles/200601/146176623.pdf)).

The increased flow of information has facilitated a better understanding
of market conditions, helping to avert the pitfall of large surpluses.
According to industry sources presented at the 30^th^ Prognosfruit
Congress, EU-25 apple output is expected to fall 5 percent from 2005, to
9.6 million tons (not official EU or USDA data). The reasons for this
decrease may be attributed to crop alternation, the frosts during the
spring, and the drought during this past summer. France and Spain have
also made use of grubbing-up measures.

While safeguard trigger conditions have not been altered, the EU trigger
volumes are updated both in December and in August to take into account
the two entry price periods for apples. The most recent update on August
17, 2006, set new trigger volume levels at 922,228 tons (for January 1
to August 31), and 51,920 tons (from September 1 to December 31).

As already noted, the trigger volume is defined by a percentage of the
previous three-year average imports. This percentage, which varies from
105 to 125 percent, depends on the level of market access, defined as
the share of imports with respect to total consumption. The following
table serves as an indicative guideline of how the calculation is made.
The figures shown do not match the Commission calculation exactly since
the data does not correspond to the EU marketing year.

+------+--------+----------+-----------+---------+----------+-------+
| **Ye | **I    | **Con    | **3-year  | *       | **Market | *     |
| ar** | mports | sumption | Avg       | *3-Avg. | a        | *Avg. |
|      | MT**   | MT**     | Imports** | Consum  | ccess:** | I     |
|      |        |          |           | ption** |          | mport |
|      |        |          |           |         | **Import | x     |
|      |        |          |           |         | %        | 1     |
|      |        |          |           |         | Consu    | .25** |
|      |        |          |           |         | mption** |       |
+------+--------+----------+-----------+---------+----------+-------+
| 1997 | 6      | 7        |           |         |          |       |
|      | 22,222 | ,807,239 |           |         |          |       |
+------+--------+----------+-----------+---------+----------+-------+
| 1998 | 6      | 7        |           |         |          |       |
|      | 12,695 | ,765,810 |           |         |          |       |
+------+--------+----------+-----------+---------+----------+-------+
| 1999 | 7      | 9        |           |         |          | \-    |
|      | 42,817 | ,105,262 |           |         |          |       |
+------+--------+----------+-----------+---------+----------+-------+
| 2000 | 5      | 8        | 659,245   | 8,      | 8%       | 82    |
|      | 85,326 | ,471,559 |           | 226,104 |          | 4,056 |
+------+--------+----------+-----------+---------+----------+-------+
| 2001 | 6      | 7        | 646,946   | 8,      | 8%       | 80    |
|      | 56,485 | ,775,271 |           | 447,544 |          | 8,683 |
+------+--------+----------+-----------+---------+----------+-------+
| 2002 | 7      | 7        | 661,543   | 8,      | 8%       | 82    |
|      | 17,065 | ,760,842 |           | 450,697 |          | 6,928 |
+------+--------+----------+-----------+---------+----------+-------+
| 2003 | 8      | 7        | 652,959   | 8,      | 8%       | 81    |
|      | 17,237 | ,352,630 |           | 002,557 |          | 6,198 |
+------+--------+----------+-----------+---------+----------+-------+
| 2004 | 9      | 7        | 730,262   | 7,      | 10%      | 91    |
|      | 07,483 | ,965,826 |           | 629,581 |          | 2,828 |
+------+--------+----------+-----------+---------+----------+-------+
| 2005 | 8      |          | 813,928   | 7,      | 11%      | 1,01  |
|      | 30,953 |          |           | 693,099 |          | 7,410 |
+------+--------+----------+-----------+---------+----------+-------+

^Source:\ COMEXT^

+---------------------+----------------------------+-------------------+
|                     | Jan-Aug                    | Sep-Dec           |
+---------------------+----------------------------+-------------------+
| > 2003              | 766,903                    | 50,334            |
+---------------------+----------------------------+-------------------+
| > 2004              | 853,506                    | 53,976            |
+---------------------+----------------------------+-------------------+
| > 2005              | 798,714                    | 33,958            |
+---------------------+----------------------------+-------------------+
| > Avg.              | 806,374                    | 46,089            |
+---------------------+----------------------------+-------------------+
| > Avg. x 1.15       | 927,330                    | 53,002            |
+---------------------+----------------------------+-------------------+

Previous trigger levels were set as follows:

> [Jan 1- Aug 31 Sep 1 -- Dec 31]{.underline}

-   730,999 32,266 Commission Reg. 2246/04 of 27 December 2004

-   804,433 117,107 Commission Reg. 1344/05 of 16 August 2005

-   805,913 80,454 Commission Reg. 2123/05 of 22 December 2005

-   922,228 51,920 Commission Reg. 1242/06 of 17 August 2006

  ------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- --------------
  **Tons**            **1997**      **1998**      **1999**      **2000**      **2001**      **2002**      **2003**      **2004**      **2005**      **96-04**     **05/96-04**

  **Hemisph.South**   **527,174**   **539,557**   **655,927**   **484,327**   **598,100**   **648,469**   **734,660**   **793,620**   **737,308**   **619,062**   **19,1%**

  New Zealand         161,195       130,623       183,851       167,070       175,819       206,039       198,628       213,740       207,612       182,739       13,6%

  South Africa        131,135       179,818       158,341       121,631       152,725       148,023       181,893       180,089       152,122       157,021       -3,1%

  Chile               131,712       144,788       179,905       91,159        143,362       158,094       177,697       178,972       178,173       150,484       18,4%

  Argentina           79,806        68,462        77,051        41,329        87,427        73,372        97,682        90,860        105,944       76,104        39,2%

  Brazil              19,721        10,308        49,679        57,052        31,662        57,486        68,994        122,627       85,246        46,715        82,5%

  Australia           2,643         2,543         2,693         3,489         3,571         2,312         4,546         2,010         2,136         2,737         -22,0%

  Uruguay             936           3,008         4,406         2,595         3,534         3,142         5,219         5,321         6,053         3,240         86,8%

                                                                                                                                                                  

  **Tons**            **1997**      **1998**      **1999**      **2000**      **2001**      **2002**      **2003**      **2004**      **2005**      **96-04**     **05/96-04**

  **Hemisph.North**   **95,048**    **73,138**    **86,891**    **100,998**   **58,385**    **68,596**    **82,576**    **113,863**   **93,646**    **82,841**    **37,4%**

  USA                 36,528        46,188        55,454        32,384        33,957        28,749        28,258        37,208        39,833        37,864        5,2%

  Canada              8,057         8,439         7,540         7,477         6,506         6,209         3,436         5,222         5,558         6,723         -17,3%

  Slovenia            5,103         1,837         1,450         1,999         291           1,564         331           368           \-            1,926         -100,0%

  Poland              2,389         2,509         819           312           1,455         1,234         6,843         6,609         \-            2,638         -100,0%

  Czech Rep.          23,129        8,326         14,336        50,016        1,085         7,413         8,143         615           \-            12,711        -100,0%

  Hungary             6,850         986           958           927           1,108         2,410         2,481         125           \-            2,312         -100,0%

  China               877           1,219         1,900         4,010         7,949         14,922        28,409        62,261        46,731        13,513        245,8%
  ------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- --------------

Source: DG AGRI. European Commission

Imports from South Hemisphere's countries are concentrated between March
and August, not overlapping with North Hemisphere harvest, with almost
no imports the rest of the year, representing 82% of the total imports.

The Northern countries have exports more homogenously distributed, with
a peak between November and April. Some adjustments were necessary for
trigger volumes after the enlargement in May 2004, when some of the most
important importers became part of the EU. Regarding the Northern
countries, the U.S. was the most important supplier until 2003, when
Chinese exports exceeded American ones. Therefore, although there is no
risk of safeguard measures in a short term, Chinese exports can cause
difficulties in the future if its growing trend continues like until
now.

**Visit our website:** our website
**[www.useu.be/agri/usda.html]{.underline}** provides a broad range of
useful information on EU import rules and food laws and allows easy
access to USEU reports, trade information and other practical
information. E-mail: AgUSEUBrussels@usda.gov

Related reports from USEU/ Brussels and EU Posts:

  ----------------------------------------------------------------- ---------------------------------------- --------------
  **Report Number**                                                 **Title**                                **Date
                                                                                                             Released**

  [UK6034](http://199.129.102.239/GainFiles/200610/146249337.pdf)   Fresh Deciduous Fruit Annual -- United   10/23/2006
                                                                    Kingdom                                  

  [IT6038](http://199.129.102.239/GainFiles/200610/146249258.pdf)   Fresh Deciduous Fruit Annual - Italy     10/16/2006

  [SP6023](../09/11/2006)                                           Fresh Deciduous Fruit Annual - Spain     09/12/2006

  [PL6061](http://199.129.102.239/GainFiles/200609/146228920.pdf)   Fresh Deciduous Fruit Annual - Poland    09/11/2006

  [HU6010](http://199.129.102.239/GainFiles/200609/146228918.pdf)   Fresh Deciduous Fruit Annual - Hungary   09/11/2006

  [LO6006](http://199.129.102.239/GainFiles/200609/146228917.pdf)   Fresh Deciduous Fruit Annual - Slovakia  09/11/2006

  [GM6033](http://199.129.102.239/GainFiles/200609/146218900.pdf)   Fresh Deciduous Fruit Annual - Germany   09/07/2006

  [E36009](http://199.129.102.239/GainFiles/200601/146176623.pdf)   EU Import License System for Apples      01/24/2006

  [E35173](http://199.129.102.239/GainFiles/200509/146130750.pdf)   EU Authorizes a Reduction in the         09/01/2005
                                                                    Frequency of Phytosanitary Inspections   
                                                                    for US apples                            

  These reports can be accessed through our website                                                          
  [www.useu.be/agri](http://www.useu.be/agri) or through the FAS                                             
  website                                                                                                    
  <http://www.fas.usda.gov/scriptsw/attacherep/default.asp>.                                                 
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