# EUR-Lex - 52012PC0640 - EN

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# 52012PC0640

**Proposal for a COUNCIL DECISION on the signing, on behalf of the European Union, of the Agreement in the form of an Exchange of Letters between the European Union and the People's Republic of China pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedules of the Republic of Bulgaria and Romania in the course of their accession to the European Union /* COM/2012/0640 final - 2012/0303 (NLE) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

With the accession of the Republic of
Bulgaria and Romania, the European Union enlarged its customs union.
Consequently, the European Union was obliged under World Trade Organization (WTO)
rules (GATT Article XXIV:6) to enter into negotiations with WTO Members having
negotiating rights in the schedules of any of the acceding Members in order to
agree on compensatory adjustment. Such adjustment is due if the adoption of the
EU’s external tariff regime results in an increase in tariffs beyond the level
for which the acceding country had bound itself at the WTO, whilst taking ‘due
account of reductions of duties on the same tariff line made by other
constituents of the customs union upon its formation’.

On 29 January 2007, the Council authorised
the Commission to open negotiations under Article XXIV:6 of GATT 1994. The
Commission has therefore negotiated with the Members of the WTO holding
negotiating rights with respect to the withdrawal of specific concessions in
relation to the withdrawal of the schedules of the Republic of Bulgaria and
Romania, in the course of their accession to the European Union.

Negotiations with the People's Republic of
China resulted in a draft Agreement in the form of an Exchange of Letters that
was initialled on 31 May 2012.

2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS

Negotiations have been conducted by the
Commission within the framework of the negotiating directives issued by the
Council. The Council (Trade Policy Committe) and the European Parliament (INTA
Committee) were informed of the text of the draft agreement prior to it being
initialled.

3.           LEGAL ELEMENTS OF THE PROPOSAL

This proposal asks the Council to authorise
the signature of the Agreement in the form of an Exchange of Letters with the People's
Republic of China. In parallel, a separate proposal on the conclusion of this
Agreement is also submitted.

The ensuing implementing Regulation will be
adopted by the Commission, pursuant to Article 144 of the Single Common Market
Organisation (CMO) Regulation (Regulation (EC) No 1234/2007) and to Article 7
of the Regulation (EC) No 1216/2009 laying down the trade arrangements
applicable to certain goods resulting from the processing of agricultural
products.

2012/0303 (NLE)

Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European
Union, of the Agreement in the form of an Exchange of Letters between the
European Union and the People's Republic of China pursuant to Article XXIV:6 and
Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994
relating to the modification of concessions in the schedules of the Republic of
Bulgaria and Romania in the course of their accession to the European Union

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular the first subparagraph of Article
207(4), in conjunction with Article 218(5) thereof,

Having regard to the proposal from the
European Commission,

Whereas:

(1)       On 29 January 2007 the
Council authorised the Commission to open negotiations with certain other
Members of the World Trade Organization under Article XXIV:6 of the General
Agreement on Tariffs and Trade (GATT) 1994, in the course of the accession to
the European Union of the Republic of Bulgaria and Romania.

(2)       Negotiations have been
conducted by the Commission within the framework of the negotiating directives adopted
by the Council.

(3)       These negotiations have
been concluded and the Agreement in the form of an Exchange of Letters between
the European Union and the People's Republic of China pursuant to Article
XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT)
1994 relating to the modification of concessions in the schedules of the
Republic of Bulgaria and Romania in the course of their accession to the
European Union ('the Agreement') was initialled on 31 May 2012.

(4)       The Agreement should be
signed,

HAS ADOPTED THIS DECISION:

Article 1

The signing of the Agreement in the form of
an Exchange of Letters between the European Union and the People's Republic of
China pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on
Tariffs and Trade (GATT) 1994 relating to the modification of concessions in
the schedules of the Republic of Bulgaria and Romania in the course of their
accession to the European Union ('the Agreement') is hereby authorised on
behalf of the Union, subject to the conclusion of the said Agreement.

The text of the Agreement to be signed is
annexed to this Decision.

Article 2

The President of the Council is hereby
authorised to designate the person(s) empowered to sign the Agreement on behalf
of the Union.

Article 3

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

Done at Brussels,

For
the Council

The
President

ANNEX

AGREEMENT
IN THE FORM OF AN EXCHANGE OF LETTERS

Between the European Union and the
People's Republic of China pursuant to Article XXIV:6 and Article XXVIII of the
General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification
of concessions in the schedules of the Republic of Bulgaria and Romania in the
course of their accession to the European Union

A.
Letter from the European Union

Place,
date

Sir,

Following
negotiations under Article XXIV:6 and Article XXVIII of the General Agreement
on Tariffs and Trade 1994 (GATT) relating to the modification of the Schedules
of the Republic of Bulgaria and Romania in the course of their accession to the
European Union, I have the honour to propose the following:

1.         The European
Union shall incorporate in its schedule, for the customs territory of the EU 27,
the concessions contained in the schedule of the EU 25 with the following
modifications:

On tariff line 0703 20 00 add 12 375
tonnes to the allocation for People's Republic of China under the EU tariff
rate quota for garlic, maintaining the present in quota rate of 9.6%.

Add 800 tonnes (drained net weight) to the
allocation for People's Republic of China under the EU tariff rate quota for
mushroom of species agaricus, prepared or preserved otherwise than by vinegar
(tariff item number 2003 10 30, out of quota rate 18.4 +
222.0€/100kg/net eda) and mushroom of species agaricus, provisionally preserved
or preserved otherwise than by vinegar (tariff item number 2003 10 20,
out of quota rate 18.4 + 191.0€/100kg/net eda), in quota rate 23%; inclusion of
tariff line 0711 51 00 (out of quota rate 9.6 + 191 €/100 kg/net eda) in the
quota.

Create a tariff rate quota of 2 026 tonnes
(erga omnes) for chocolate with an in-quota rate of 38% (tariff items numbers
1806 20, 1806 31, 1806 32 and 1806 90).

Create a tariff rate quota of 2 289 tonnes
(erga omnes) for confectionary with an in-quota rate of 35% (tariff item number
1704).

Create a tariff rate quota of 409 tonnes (erga
omnes) for biscuits with an in-quota rate of 40% (tariff item number
1905 90).

2.         People's
Republic of China accepts the European Union's approach to netting-out of
tariff rate quotas as a way of adjusting the GATT obligations of the EU 25 and
those of the Republic of Bulgaria and Romania following the recent enlargement
of the European Union.

The European Union and the People's
Republic of China shall notify each other the completion of their internal
procedures for the entry into force of the agreement. The agreement shall enter
into force 14 days after the date of receipt of the latest notification.

I should be obliged if you would confirm
that your Government is in agreement with the content of this letter. Should
this be the case, this letter and your confirmation shall together constitute
an Agreement in the form of an Exchange of Letters between the European Union
and the People's Republic of China.

Please accept, Sir, the assurance of my
highest consideration.

For
the European Union

B.
Letter from the People's Republic of China

Place, date

Sir,

I have
the honour to acknowledge the receipt of your letter of ..., which reads as
follows:

"Following
negotiations under Article XXIV:6 and Article XXVIII of the General Agreement
on Tariffs and Trade 1994 (GATT) relating to the modification of the Schedules
of the Republic of Bulgaria and Romania in the course of their accession to the
European Union, I have the honour to propose the following:

1.         The
European Union shall incorporate in its schedule, for the customs territory of
the EU 27, the concessions contained in the schedule of the EU 25
with the following modifications:

On tariff line 0703 20 00 add 12 375
tonnes to the allocation for People's Republic of China under the EU tariff
rate quota for garlic, maintaining the present in quota rate of 9.6%.

Add 800 tonnes (drained net weight) to the
allocation for People's Republic of China under the EU tariff rate quota for
mushroom of species agaricus, prepared or preserved otherwise than by vinegar
(tariff item number 2003 10 30, out of quota rate 18.4 +
222.0€/100kg/net eda) and mushroom of species agaricus, provisionally preserved
or preserved otherwise than by vinegar (tariff item number
2003 10 20, out of quota rate 18.4 + 191.0€/100kg/net eda), in quota
rate 23%; inclusion of tariff line 0711 51 00 (out of quota rate 9.6 + 191
€/100 kg/net eda) in the quota.

Create a tariff rate quota of 2 026 tonnes
(erga omnes) for chocolate with an in-quota rate of 38% (tariff items numbers
1806 20, 1806 31, 1806 32 and 1806 90).

Create a tariff rate quota of 2 289 tonnes
(erga omnes) for confectionary with an in-quota rate of 35% (tariff item number
1704).

Create a tariff rate quota of 409 tonnes (erga
omnes) for biscuits with an in-quota rate of 40% (tariff item number
1905 90).

2.         People's
Republic of China accepts the European Union's approach to netting-out of
tariff rate quotas as a way of adjusting the GATT obligations of the EU 25 and
those of the Republic of Bulgaria and Romania following the recent enlargement
of the European Union.

The European Union and the People's
Republic of China shall notify each other the completion of their internal
procedures for the entry into force of the agreement. The agreement shall enter
into force 14 days after the date of receipt of the latest notification.

I should be obliged if you would confirm
that your Government is in agreement with the content of this letter. Should
this be the case, this letter and your confirmation shall together constitute
an Agreement in the form of an Exchange of Letters between the European Union
and the People's Republic of China."

I hereby
have the honour to express my Government's agreement with the above letter.

On
behalf of the People's Republic of China