WORLD TRADE  
ORGANIZATION  WT/L/643 
15 December 2005 
 
 (05-5997) 
 Original:   English 
  
 
MODIFICATION OF SCHEDULE CXL OF THE EUROPEAN COMMUNITIES 
 
Agreement Between the United St ates and European Communities
 
With Respect to Husked Rice  
 
Communication from the United States 
 
  The following communication, dated 8 December  2005, addressed to the Chairman of the 
General Council is being circulated at the re quest of the Delegation of the United States. 
 
_______________ 
 
 
At the meeting of the General Council on 28 February 2005, the United States noted that it 
had reached a tentative agreement with the European Communities in connection with the 
modification by the latter of certain tariff concessions on husked rice.
1  The United States now wishes 
to inform the General Council of the contents of the final agreement between the European 
Communities and the United States.  
The agreement was finalized on 30 June, 2005.  A copy of the agreement is enclosed.  We 
would be grateful if you would circulate the agreement to Members. 
    
                                                     
 
1WT/GC/M/93, paragraph 3. WT/L/643 
Page 2  
 
ANNEX 
 
Agreement in the form of an exchange of le tters between the United States of America and
 
the European Community relating to the method of calculation of applied duties for husked rice  
 
 
A. Letter from the European Community  
  
Brussels, 27 June 2005 
 
 Sir,   Following negotiations between the European Community (EC) and the United States of 
America, the EC agrees to the conclusions as outlined below. 
 Applied rate of duty for certa in husked rice (CN code 1006 20)
 
 1. The EC shall apply a rate of duty for certain hus ked rice in accordance with paragraphs 2 to 7. 
 
2. Annual reference import level
: 
 
(a) First marketing year: in the first marketi ng year within the scope of this agreement 
(1 September 2004 to 31 August 2005), th e annual reference import level shall be 
calculated as the average volume of total husked rice imports entering the EC-25 
from all origins in the marketing years 1 September 1999 – 31 August 2000, 
1 September 2000 – 31 August 2001, and 1 September 2001 – 31 August 2002, less 
imports of Basmati husked rice into th e EC-25, plus 10% (i.e. 431,678 MT). 
 
(b) Increase in subsequent marketing years: for each marketing year 2005/06, 2006/07 
and 2007/08, the annual reference import level shall be increased by 6000 MT/year 
from the level of the previous marketing year .  No later than 90 days before the end 
of the marketing year 1 September 2007, to  31 August 2008, both parties shall enter 
into consultations on the annual increase for subsequent marketing years, taking into 
account the developments in the EC’s rice ma rket notably as regards the evolution of 
consumption, and shall agree on the annual  increase no later than 31 August 2008. 
 
3. Six-month reference import level : in each marketing year, a six-month reference import level 
shall be calculated as 50 per cent of the an nual reference import level calculated in 
paragraph 2 above, which in the first marketing year would be 215,839 MT. 
 4. Mid-year adjustment to applied tariff rate
: within 10 days after the end of the first six months 
of each marketing year, the EC shall review and, if necessary, adjust the applied tariff rate as 
follows: 
 
(a) if actual husked rice imports for the just-completed six-month period are more than 
15 per cent below the six-month reference im port level for that period, as calculated 
under paragraph 3 above (i.e., for the first marketing year less than 183,463 MT), the 
EC shall apply a tariff rate of EUR 30/MT; 
 
(b)  if actual husked rice imports for the just-completed six-month period are more than 
15 per cent above the six-month reference im port level for that period, as calculated  WT/L/643 
 Page 3 
 
 
under paragraph 3 above (i.e., for the first marketing year more than 248,215 MT), 
the EC shall apply a tariff rate of EUR 65/MT; 
 
(c)  if actual husked rice imports for the just-completed six-month period are within 
15 per cent (inclusive) of the six-month re ference import level for that period, as 
calculated under paragraph 3 a bove (i.e., for the first marketing year between 183,463 
and 248,215 MT), the applied rate shall be EUR 42,5/MT. 
 
For purposes of (a) through (c) above, actual hus ked rice imports are all imports entering the 
EC-25 from all origins under the CN codes 1006 20 less imports of Basmati husked rice into 
the EC-25. 
 
5. End-of-year adjustment to applied tariff rate : within 10 days after the end of the marketing 
year, the EC shall review and, if necessary,  adjust the applied tariff rate as follows: 
 
(a) if actual husked rice imports for the just-completed marketing year are more than 
15 per cent below the annual reference import level for that twelve-month period, as calculated under paragraph 2 above (i.e., fo r the first marketing year less than 
366,926 MT), the EC shall apply a tariff rate of EUR 30/MT; 
 
(b) if actual husked rice imports for the just-completed marketing year are more than 
15 per cent above the annual re ference import level for that  twelve-month period, as 
calculated under paragraph 2 above (i.e., fo r the first marketing year more than 
496,430 MT), the EC shall apply a tariff rate of EUR 65/MT; 
 
(c) if actual husked rice imports for the just-completed marketing year are within 15 per 
cent (inclusive) of the annual reference im port level for that twelve-month period, as 
calculated under paragraph 2 a bove (i.e., for the first marketing year between 366,926 
and 496,430 MT), the EC shall apply a tariff rate of EUR 42,5/MT. 
 
For purposes of (a) through (c) above, actual hus ked rice imports are all imports entering the 
EC-25 from all origins under the CN codes 1006 20 less imports of Basmati husked rice into 
the EC-25. 
 6. Data
: The calculation of the annual and six-m onth actual import levels  under paragraphs 4 
and 5 above shall be determin ed using EC rice imports license data. The EC shall publish 
these data on the internet on a weekly basis. 
 
7. Transparency : The EC shall promptly provide public notice of any adjustment in the applied 
tariff rate. 
 
8. Consultation : At the request of either party, the parti es shall, within 30 days of the receipt of 
such a request, enter into consultations on matters covered by this agreement. 
 
9. If the parties are unable to resolve the issues subject to consultation within 30 days after 
receipt of the request, the United States may submit written notification to the EC that it intends to exercise any rights under Article XXVIII:3(a) of the GATT 1994 as provided in paragraph 10 below and the EC may submit writte n notification to the United States that it 
intends to withdraw from the present agre ement as provided in paragraph 11 below. 
 WT/L/643 
Page 4  
 
10. Extension of deadline for exercise of any rights under Article XXVIII of the GATT 1994
: 
 
(a) The parties agree that the deadline for withdrawal of substantially equivalent 
concessions pursuant to Article XXVIII:3(a) shall be considered to be extended.  
Accordingly, the United States may exerci se any right to withdraw substantially 
equivalent concessions under Article XXVIII:3( a) at any time after the expiration of 
30 days written notice to the EC of the U.S. intent to exercise such rights, and the EC 
shall not assert that the United States is precluded from taking action pursuant to Article XXVIII:3(a) on the ground that the action was untimely. 
 
(b) Notwithstanding (a) above, the United States shall not exercise any right to withdraw 
substantially equivalent concessions unl ess it has requested consultations and 
provided notification pursuant to paragraph 9 above.  Should the EC withdraw from 
the agreement, the US shall be entitled to exercise any applicable rights under 
Article XXVIII:3(a) with immediate effect. 
 
11. The EC shall not withdraw from the present ag reement unless it has requested consultations 
and provided notification pursuant to paragra ph 9 above.  The EC may withdraw from the 
agreement at any time after the expiration of 30 days from the notification referred to in 
paragraph 9.  Should the United States withdr aw concessions pursuant to paragraph 10 above, 
the EC shall be entitled to withdraw from th e present agreement with immediate effect. 
 
12. Subject to the provisions of paragraph 10, this agreement is without prejudice to any right of 
the EC to challenge any withdrawal  of concessi ons by the United States if it considers the 
withdrawal to be incompatible with Artic le XXVIII of the GATT 1994 or other relevant 
provisions of the WTO Agreement. 
 
13. The EC shall consult and cooperate with the United States to obtain the approval by the WTO 
General Council of the extension of the deadlin e for withdrawal of substantially equivalent 
concessions pursuant to Article XXVIII:3(a).   
 14. This agreement shall be approve d by the parties in accordance with their own procedures. The 
EC considers that this agreement shall not ser ve as a precedent for future Article XXVIII 
negotiations. 
 15. The provisions of this agreement shall be a pplicable as from 1 March 2005. To this purpose, 
the EC shall put in place the necessary inte rnal procedures in order to ensure the 
implementation of paragraph 4 for husked rice imports entering in the period 1 March 2005 to 
31 August 2005. 
  I would be grateful if you could confirm the agreement of your Government to the above.    Please accept, Sir, the assurance of my highest consideration.  
 
   
On behalf of 
the European Community  WT/L/643 
 Page 5 
 
 
B. Letter from the United States of America  
  
Washington, D.C., June 30, 2005 
 
 
Madam,   I have the honour to acknowledge receipt of your letter of today’s date, worded as follows: 
 
“Following negotiations between the European  Community (EC) and the United States of 
America, the EC agrees to the conclusions as outlined below. 
 
Applied rate of duty for certa in husked rice (CN code 1006 20)
 
 
1. The EC shall apply a rate of duty for certain husked rice in accordance with 
paragraphs 2 to 7. 
 2. Annual reference import level
: 
 
(a) First marketing year: in the first marketing year within the scope of this 
agreement (1 September 2004 to 31 August 2005), the annual reference 
import level shall be calculated as th e average volume of total husked rice 
imports entering the EC-25 from all origins in the marketing years 1 September 1999 – 31 August 2000, 1 September 2000 – 31 August 2001, 
and 1 September 2001 – 31 August 2002, less imports of Basmati husked rice 
into the EC-25, plus 10% (i.e. 431,678 MT). 
 
(b) Increase in subsequent marketing years: for each marketing year 2005/06, 
2006/07 and 2007/08, the annual reference im port level shall be increased by 
6000 MT/year from the level of the previous marketing year.  No later than 90 days before the end of the marketing year 1 September 2007, to 
31 August 2008, both parties shall en ter into consultations on the annual 
increase for subsequent marketing years, taking into account the developments in the EC’s rice market  notably as regards the evolution of 
consumption, and shall agree on the annual increase no later than 31 August 2008. 
 
3. Six-month reference import level
: in each marketing year, a six-month reference 
import level shall be calculated as 50 per cent of the annual reference import level 
calculated in paragraph 2 above, which in  the first marketing year would be 
215,839 MT. 
 
4. Mid-year adjustment to applied tariff rate : within 10 days after the end of the first six 
months of each marketing year, the EC shall review and, if necessary, adjust the applied tariff rate as follows: 
 
(a) if actual husked rice imports for th e just-completed six-month period are 
more than 15 per cent below the six-m onth reference import level for that 
period, as calculated under paragraph 3 above (i.e., for the first marketing 
year less than 183,463 MT), the EC sha ll apply a tariff rate of EUR 30/MT; 
 
(b) if actual husked rice imports for th e just-completed six-month period are 
more than 15 per cent above the six- month reference import level for that WT/L/643 
Page 6  
 
period, as calculated under paragraph 3 above (i.e., for the first marketing 
year more than 248,215 MT), the EC shall apply a tariff rate of EUR 65/MT; 
 
(c) if actual husked rice imports for th e just-completed six-month period are 
within 15 per cent (inclusive) of the six-month reference import level for that 
period, as calculated under paragraph 3 above (i.e., for the first marketing 
year between 183,463 and 248,215 MT), the applied rate shall be EUR 42,5/MT. 
 
For purposes of (a) through (c) above, actual husked rice imports are all imports 
entering the EC-25 from all origins under the CN codes 1006 20 less imports of 
Basmati husked rice into the EC-25. 
 
5. End-of-year adjustment to applied tariff rate
: within 10 days after the end of the 
marketing year, the EC shall review and, if necessary, adjust the applied tariff rate as 
follows: 
 
(a) if actual husked rice imports for the just-completed marketing year are more 
than 15 per cent below the annual refere nce import level for that twelve-
month period, as calculated under para graph 2 above (i.e., for the first 
marketing year less than 366,926 MT), th e EC shall apply a tariff rate of 
EUR 30/MT; 
 
(b) if actual husked rice imports for the just-completed marketing year are more 
than 15 per cent above the annual refe rence import level for that twelve-
month period, as calculated under para graph 2 above (i.e., for the first 
marketing year more than 496,430 MT),  the EC shall apply a tariff rate of 
EUR 65/MT; 
 
(c) if actual husked rice imports for the just-completed marketing year are within 
15 per cent (inclusive) of the annual re ference import level for that twelve-
month period, as calculated under para graph 2 above (i.e., for the first 
marketing year between 366,926 and 496, 430 MT), the EC shall apply a tariff 
rate of EUR 42,5/MT. 
 
For purposes of (a) through (c) above, actual husked rice imports are all imports entering the EC-25 from all origins under the CN codes 1006 20 less imports of 
Basmati husked rice into the EC-25. 
 6. Data
: The calculation of the annual and six-month actual import levels under 
paragraphs 4 and 5 above sha ll be determined using EC ri ce imports license data. The 
EC shall publish these data on the internet on a weekly basis. 
 
7. Transparency : The EC shall promptly provide public notice of any adjustment in the 
applied tariff rate. 
 
8. Consultation : At the request of either party, the parties shall, within 30 days of the 
receipt of such a request, enter into c onsultations on matters covered by this 
agreement. 
 
9. If the parties are unable to resolve the issu es subject to consultation within 30 days 
after receipt of the request, the United States may submit written notification to the EC that it intends to exercise any rights under Article XXVIII:3(a) of the GATT 1994 
as provided in paragraph 10 below and the EC may submit written notification to the  WT/L/643 
 Page 7 
 
 
United States that it intends to withdraw from the present agreement as provided in paragraph 11 below. 
 10. Extension of deadline for exercise of an y rights under Article XXVIII of the GATT 
1994 :   
 
(a) The parties agree that the deadline for withdrawal of substantially equivalent 
concessions pursuant to Article XXVIII:3(a) shall be considered to be extended.  Accordingly, the United States may exercise any right to withdraw substantially equivalent concessions unde r Article XXVIII:3(a) at any time 
after the expiration of 30 days written notice to the EC of the U.S. intent to 
exercise such rights, and the EC shall not assert that the United States is precluded from taking action pursuant to Article XXVIII:3(a) on the ground that the action was untimely. 
 
(c) Notwithstanding (a) above, the United States shall not exercise any right to 
withdraw substantially equivalent  concessions unless it has requested 
consultations and provided notificati on pursuant to paragraph 9 above.  
Should the EC withdraw from the agreement, the US shall be entitled to exercise any applicable rights under Article XXVIII:3(a) with immediate effect. 
 
11. The EC shall not withdraw from the present agreement unless it has requested 
consultations and provided notification pursu ant to paragraph 9 above.  The EC may 
withdraw from the agreement at any time after the expiration of 30 days from the notification referred to in paragraph 9.  Should the United States withdraw 
concessions pursuant to paragraph 10 above, the EC shall be entitled to withdraw 
from the present agreement with immediate effect. 
 12. Subject to the provisions of paragraph 10, this agreement is without prejudice to any 
right of the EC to challenge any withdrawal  of concessions by the United States if it 
considers the withdrawal to be incompa tible with Article XXVIII of the GATT 1994 
or other relevant provisions of the WTO Agreement. 
 13. The EC shall consult and cooperate with the United States to obtain the approval by 
the WTO General Council of the extension of the deadline for withdrawal of substantially equivalent concessions pursuant to Article XXVIII:3(a).   
 
14. This agreement shall be approved by th e parties in accordance with their own 
procedures. The EC considers that this ag reement shall not serve as a precedent for 
future Article XXVIII negotiations. 
 15. The provisions of this agreement shall be applicable as from 1 March 2005.  To this 
purpose, the EC shall put in place the necessary internal procedures in order to ensure 
the implementation of paragraph 4 for hus ked rice imports entering in the period 
1 March 2005 to 31 August 2005.” 
 WT/L/643 
Page 8  
 
 The United States of America has the honour of confirming its agreement with the content of 
this letter.    Please accept, Madam, the assurance of my highest consideration.   
 
  
On behalf of 
the United States of America 
 
 
__________