# EUR-Lex - 52014PC0223 - EN

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# 52014PC0223

**Proposal for a COUNCIL DECISION establishing the position to be taken by the European Union within the General Council of the World Trade Organization on the accession of the Islamic Republic of Afghanistan to the WTO /* COM/2014/0223 final - 2014/0125 (NLE) */**

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EXPLANATORY MEMORANDUM

I. INTRODUCTION

Members of the World Trade Organization
(WTO) and Afghanistan have reached the concluding stage of an agreement on the
terms for the accession of Afghanistan to the organization. This comes after 10
years of negotiations, which began when Afghanistan submitted its application
to join the WTO in 2004. Afghanistan’s request for accession has been examined
in accordance with the guidelines set out by the WTO General Council on the
accession of least-developed countries (LDC) and now a Council Decision
approving the terms of Afghanistan’s accession is required by the TFEU, before
the EU can formally support that approval in the WTO.

A summary of the terms of the accession is
set out below.

II. SUMMARY OF TERMS OF AFGHANISTAN’S WTO ACCESSION BY SECTOR

Schedules of commitments

Goods (overall)

The average final bound rate (FBR) in the
accession schedule of Afghanistan is 15.1%.

The average FBR is higher at 29.6% for
agriculture products than the 8.8% observed for industrial goods. Tariff peaks
are also higher in agriculture (60-70% maximum in some agriculture products
versus 50% maximum observed in industrial goods).

Afghanistan will
implement the FBRs as from the date of accession, with the exception of imports
of a handful of Information Technology products – such as electronic circuits,
video cameras - (which will be fully liberalised by 2019 anyway).

These average
levels for tariffs are very reasonable considering the LDC status of Afghanistan as well as the small size and vulnerability of its economy. Past EU practice in
relation to LDCs has been to accept higher tariff levels than these as
reasonable for economies of comparable size. Against this background, the
schedule leaves unbound:

– 
41 tariff lines on agriculture products whose
trade is considered as prohibited in Afghanistan (pork and pork products, beer,
wine and spirits); and

– 
183 tariff lines of industrial goods, corresponding
to 4.4% of the number of industrial TLs in the schedule (in compliance with the
recently approved “Guidelines for negotiation of LDCs accession to the WTO”
which allow up to a 5% of unbound industrial tariff lines).

Industrial Goods

– 
The average FBR for non-agriculture products is
8.8%.

– 
The highest averages of 30% are observed in
ceramics, and then averages of 15-20% in furniture, glass and textiles.

– 
The lowest, 0%, is offered in Information
Technology (ITA) products that will be implemented by 2019.

– 
The highest industrial tariff peaks are 50%
(passenger vehicles) followed by peaks of 30% in ceramics and diverse textile
products.

– 
The 183 unbound tariff lines on industrial goods
correspond to raw materials, carpets, footwear and furniture.

Agricultural goods

– 
The average FBR for agriculture products is
29.6%.

– 
The highest tariff peaks in agriculture are of
70% for some fruit juices, and 60% in a wide variety of agriculture products
such as lamb and beef meat, vegetables, fruits, nuts, tomatoes, potatoes,
tobacco and mineral waters.

– 
The 41 unbound tariff lines on agriculture
products concern products whose trade is considered as prohibited in Afghanistan (pork and pork products, beer, wine and spirits).

Export duties

Afghanistan has
undertaken standstill and reduction commitments on export duties. It will not
introduce export duties on products which are not currently subject to such
duties. As regards existing duties, the maximum rates bound for critical raw
materials will be reduced within five years as from the date of accession.

Services

Afghanistan's schedule
of specific commitments in services is satisfactory considering its LDC status.
Afghanistan will undertake market access and national treatment commitments in
a broad range of services sectors, including professional, computer and other
business services, communication services (courier services and
telecommunications), construction services, distribution services, private
educational services, environmental services, financial (insurance and banking)
services, hospital services, hotel and restaurant services and transport
services (maritime and air transport services and auxiliary services).

Protocol commitments

In the final, multilateral stage of the
accession process, WTO Members collectively sought to ensure the basic
compatibility of Afghanistan’s trade laws and institutions with WTO rules and
agreements, setting these out in the Protocol of accession and Working Party
Report.

Transitional periods were requested in a
number of fields; the following are of particular interest to the EU:

Application of internal taxes to imports: a fixed tax and a business receipts tax currently applied will
only be in full conformity with WTO obligations in 2020; for the rest of
internal taxes and charges levied on imports, WTO alignment will take place as
form the date of accession.

Technical Barriers to Trade (TBT): Afghanistan will fully implement the Agreement on
Technical Barriers to Trade by 1 January 2016. An action plan is set out in the
Working Party Report.

Sanitary and phytosanitary measures
(SPS): Afghanistan will benefit from a transition period till 1
January 2018 for full implementation of the SPS Agreement, as set out in
an action plan included in the Working Party Report.

Trade-related investment measures (TRIMS): The full implementation of the TRIMS Agreement
will be effective by 31 December 2020, date at which local content requirements
for goods in the Hydrocarbon Law and the Mining Law would have to be
eliminated.

Trade-related intellectual property
rights (TRIPS): The full implementation of the
TRIPS Agreement will be effective by 1 January 2016, as set out in an action
plan included in the Working Party Report.

III. RECOMMENDATION

In submitting the terms of Accession of Afghanistan
to the WTO for approval by the Council, the Commission considers these terms as
representing a balanced and ambitious package of market opening commitments,
which will bring substantial benefits to Afghanistan and its WTO trading
partners alike.

2014/0125 (NLE)

Proposal for a

COUNCIL DECISION

establishing the position to be taken by
the European Union within the General Council of the World Trade Organization
on the accession of the Islamic Republic of Afghanistan to the WTO

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Articles 91, 100(2) and the
first subparagraph of Article 207(4), in conjunction with Article 218(9)
thereof,

Having regard to the proposal from the
European Commission,

Whereas:

(1)       On
21 November 2004 the Government of the Islamic Republic
of Afghanistan applied for accession to the Marrakesh Agreement
establishing the World Trade Organization (WTO), pursuant to Article XII of
that Agreement.

(2)       A Working Party on the accession of the Islamic Republic of Afghanistan was established on 13 December 2004 in order to reach agreement on terms of accession acceptable to the
Islamic Republic of Afghanistan and all WTO Members.

(3)       The Commission, on behalf
of the Union, has negotiated a comprehensive series of market opening
commitments on the part of the Islamic Republic of Afghanistan which satisfy
the Union's requests.

(4)       These commitments are now
embodied in the Protocol of Accession of the Islamic Republic of Afghanistan to
the WTO.

(5)       Accession to the WTO is
expected to make a positive and lasting contribution to the process of economic
reform and sustainable development in the Islamic Republic Afghanistan.

(6)       The Protocol of Accession
should therefore be approved.

(7)       Article XII of the
Agreement establishing the WTO provides that the terms of accession are to be
agreed between the acceding Member and the WTO, and that the Ministerial
Conference of the WTO approves the terms of accession on the WTO side. Article
IV.2 of the Agreement establishing the WTO provides that in the intervals
between meetings of the Ministerial Conference, its functions shall be
conducted by the General Council.

(8)       Accordingly, it is
necessary to establish the position to be taken by the Union within the General
Council of the WTO on the accession of the Islamic Republic of Afghanistan to
the WTO,

HAS ADOPTED THIS DECISION:

Article 1

The position to be taken by the European
Union within the General Council of the World Trade Organization on the
accession of the Islamic Republic of Afghanistan to the WTO is to approve the
accession.

Article 2

This Decision shall enter into force on the
day of its adoption.

Done at Brussels,

For
the Council

The
President