EXCHANGE OF LETTERS between the European Economic Community and the People's Republic of Hungary on trade in the sheepmeat and goatmeat sector

Letter No 1

Sir,

I have the honour to refer to the negotiations recently undertaken between our respective delegations for the purpose of drawing up provisions concerning import into the European Economic Community of mutton, lamb and goatmeat, and live sheep and goats other than pure-bred breeding animals from Hungary ; in connexion with implementation by the Community of the common organization of the market in sheepmeat and goatmeat.

During these negotiations which took place between the two Parties, who are participants in GATT, our delegations agreed as follows: 1. This arrangement covers: - live sheep and goats other than pure-bred breeding animals (subheading 01.04 B of the Common Customs Tariff),

- fresh or chilled mutton, lamb and goatmeat (subheading 02.01 A IV a) of the Common Customs Tariff),

- frozen mutton, lamb and goatmeat (subheading 02.01 A IV b) of the Common Customs Tariff).

2. Within the terms of this arrangement, the competent Hungarian authorities undertake to ensure that exports to the Community of the products referred to in point 1 shall not exceed the following annual quantities: - 10 050 tonnes of live animals, expressed as carcase weight bone-in (1) (2),

- 1 150 tonnes of fresh or chilled meat, expressed as carcase weight bone-in (2).

For this purpose, the appropriate procedures shall be implemented by the competent Hungarian authorities.

3. Provided that Hungarian exports do not exceed the quantities given in point 2, the Community will not apply any quantitative restriction nor measure of equivalent effect.

Should the Community have recourse to the safeguard clause, the provisions of this arrangement would not be affected.

4. If imports from Hungary exceed the agreed quantities, the Community reserves the right to suspend further imports from that country until the end of the current year. However, in any case, quantities exceeding the agreed quantity for the current year shall be deducted from the quantities agreed for the following year.

(1) 100 kilograms live weight shall compound to 47 kilograms carcase weight (bone-in equivalent weight). (2) Carcase weight (bone-in equivalent weight). By this term is understood the weight of bone-in meat presented as such as well as boned meat converted by a coefficient into bone-in weight. For this purpose 55 kilograms of boned mutton corresponds to 100 kilograms of bone-in mutton and 60 kilograms of boned lamb corresponds to 100 kilograms of bone-in lamb. 5. The Community undertakes, in respect of imports of products covered by this arrangement, to restrict the charges levied to the following ad valorem levels: - 10 % for live animals,

- 10 % for meat.

The Community will not charge, apart from the levies set out above, customs duties or other charges having an effect equivalent to levies or to customs duties.

6. When a new Member State accedes to the Community and if the pattern of trade between Hungary and such Member State were to justify it, the Community shall agree to consultations between the two Parties with a view to possible adaptation of the quantities given at point 2.

The quantities given at point 2 shall not be reduced.

The charges applicable to imports for the said new Member State shall be fixed in accordance with the rules in the Treaty of Accession, the maximum level of the levy specified in point 5 of this arrangement being taken into account.

7. The competent Hungarian authorities shall ensure compliance with the terms of this arrangement, in particular by means of the issue, by a Hungarian agency designated for the purpose, of export licences covering the products listed in point 1, within the agreed quantity limits.

For its part the Community undertakes to adopt all the necessary measures to ensure that the automatic issue of an import licence for the abovementioned products originating in Hungary shall be subject to production of an export licence issued by the competent Hungarian authority.

Detailed rules for the implementation of this system shall be drawn up in such a way that no security need be lodged for issue of import licences in respect of the products in question. These detailed rules shall also provide that the competent Hungarian authorities and the competent Community authorities shall undertake periodical exchanges of information on the quantities in respect of which export and import licences have been issued, broken down, as appropriate, according to destination.

It is hereby agreed that export licences will be valid for a period of three months from their date of issue. The corresponding import licences shall be valid until the date of expiry of the export licences.

Quantities delivered under an export licence shall be deducted from the quantity agreed for the year during which the export licence was issued.

8. The two Parties agree that steps should be taken to ensure that the smooth operation of the arrangement is not disturbed by deliveries of sheepmeat and goatmeat products falling under tariff headings not covered by this arrangement.

9. In order to ensure the smooth operation of this arrangement, the two Parties agree to remain in close contact and to be ready to undertake consultations on any question which might arise in the course of application of this arrangement. The said consultations must be commenced within a maximum period of 14 days following a request by one of the Parties.

10. The provisions of this arrangement shall be accepted without prejudice to the rights and obligations of the Parties under GATT.

11. The annual quantity fixed at point 2 shall cover the period 1 January to 31 December.

The quantity applicable from 1 January 1984 until 31 March 1984 shall be fixed by means of the consultations referred to at point 9 in proportion to the overall annual quantity.