AGREEMENT in the form of an Exchange of Letters adapting the Agreement between the European Community and Australia on trade in mutton, lamb and goatmeat

A. Letter N° 1

Sir,

I have the honour to refer to the Exchange of Letters of 14 October 1980 constituting an Agreement between the Community and Australia establishing provisions relating to import of mutton and lamb and goatmeat into the Community from Australia and to negotiations held between our respective delegations for the purpose of establishing temporary derogations from certain of those provisions concurrent with the implementation of measures to stabilize the European Community sheepmeat sector and to reform the European Community's internal regime in order to achieve a unified European Community sheepmeat market. Accordingly, they have agreed on the following derogations from the Principal Agreement which shall remain in force for the duration of this Agreement.

Clause 1

A. Access and quantity

In Clause 2 of the Principal Agreement as modified by Clause 6 of the Principal Agreement, the quantity of 17 500 tonnes expressed in carcase weight shall be deemed to include a maximum in 1989 of 1 500 tonnes of lamb imported into the European Community from Australia in a form which has never been frozen, a maximum of 2 000 tonnes in 1990, a maximum of 2 500 tonnes in 1991, and a maximum of 3 000 tonnes in 1992.

B. Tariff

In Clause 5 of the Principal Agreement, the words 'a maximum amount of 10 %, ad valorem' shall be deemed to be replaced by the word 'zero'.

C. Price surveillance

With a view to improved sheepmeat prices within the European Community, prices for lamb imported from Australia will be monitored in accordance with the procedures contained in the Annex to this Agreement.

Clause 2

Consultation

Notwithstanding Clause 1 (C) of this Agreement either Party may request consultations concerning the operation of this Agreement at any time.

Clause 3

GATT obligations

The provisions of this Agreement shall be agreed without prejudice to the rights of Australia and the European Community under GATT.

Clause 4

This Agreement shall enter into force on 1 January 1989 and shall remain in force until 31 December 1992.

Clause 5

Within six months prior to expiration of this Agreement, its provisions shall be reviewed.

I have the honour to propose that, if the foregoing is acceptable to your Government, this letter and your confirmatory reply shall together constitute and evidence an Agreement between the European Economic Community and Australia on the matter.

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

On behalf of

the Council of the European Communities

ANNEX

Price surveillance procedure

1. The European Community will monitor the prices in each Member State for imported frozen lamb carcases from Australia on the basis of the average prices over each monthly period.

2. The relationship between the prices for imported frozen lamb carcases from Australia in each Member State and the market prices for Community-produced lamb in each such Member State will be compared with the benchmark level specified below for each such Member State. If this comparison indicates that the price relationship has, in two Member States in the same month, moved below the benchmark levels for those Member States, technical consultations will take place at the request of either Party to determine factors causing the downward movement. The factors that will be taken into account by the parties in such consultations shall include traditional and seasonal price relationships and fluctuations, the prices of cuts, the impact of prices of other meats, and other exceptional factors.

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3. In the event that the downward movement of the relationship between prices for Australian frozen lamb carcases and Community-produced lamb below the benchmark levels in the particular Member States under consideration and their remaining at such low levels is indicative of a problem, the Parties shall consider any recommendations arising out of the technical consultations for the resolution of the problem. If the problem identified is attributable to the prices at which Australian frozen lamb carcases are being sold in those Member States by Australian exporters then Australia would take what action is available to it to restore the price relationship between frozen lamb carcases and Community-produced lamb in those Member States to the benchmark levels.

4. Should the Parties in the technical consultations fail to reach agreement on appropriate measures to resolve the problem, the Consultative Committee established under Clause 10 of the Principal Agreement may be convened at a senior policy level at the request of either Party to give the matter urgent consideration.

If agreement cannot be reached at official level, the matter may be referred by either party to the EC Commissioner for Agriculture and the Australian Minister of Trade Negotiations for resolution.

5. Australia and the European Community adopt as targets for achievement by the end of 1992 an improvement in the previously defined benchmark levels for Northern Member States by 5 percentage points and for Southern Member States by 8 percentage points.

B. Letter N° 2

Sir,

I have the honour to acknowledge receipt of your letter of today's date, which reads as follows:

'I have the honour to refer to the Exchange of Letters of 14 October 1980 constituting an Agreement between the Community and Australia establishing provisions relating to import of mutton and lamb and goatmeat into the Community from Australia and to negotiations held between our respective delegations for the purpose of establishing temporary derogations from certain of those provisions concurrent with the implementation of measures to stabilize the European Community sheepmeat sector and to reform the European Community's internal regime in order to achieve a unified European Community sheepmeat market. Accordingly, they have agreed on the following derogations from the Principal Agreement which shall remain in force for the duration of this Agreement.

Clause 1

A. Access and quantity

In Clause 2 of the Principal Agreement, as modified by Clause 6 of the Principal Agreement, the quantity of 17 500 tonnes expressed in carcase weight shall be deemed to include a maximum in 1989 of 1 500 tonnes of lamb imported into the European Community from Australia in a form which has never been frozen, a maximum of 2 000 tonnes in 1990, a maximum of 2 500 tonnes in 1991, and a maximum of 3 000 tonnes in 1992.

B. Tariff

In Clause 5 of the Principal Agreement, the words 'a maximum amount of 10 %, ad valorem' shall be deemed to be replaced by the word 'zero'.

C. Price surveillance

With a view to improved sheepmeat prices within the European Community, prices for lamb imported from Australia will be monitored in accordance with the procedures contained in the Annex to this Agreement.

Clause 2

Consultation

Notwithstanding Clause 1 (C) of this Agreement either Party may request consultations concerning the operation of this Agreement at any time.

Clause 3

GATT obligations

The provisions of this Agreement shall be agreed without prejudice to the rights of Australia and the European Community under GATT.

Clause 4

This Agreement shall enter into force on 1 January 1989 and shall remain in force until 31 December 1992.

Clause 5

Within six months prior to expiration of this Agreement, its provisions shall be reviewed.

I have the honour to propose that, if the foregoing is acceptable to your Government, this letter and your confirmatory reply shall together constitute and evidence an Agreement between the European Economic Community and Australia on the matter.'

I have the honour to confirm the foregoing is acceptable to my Government and that your letter together with this reply shall constitute an Agreement in accordance with your proposal.

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

For the Government of Australia

ANNEX

Price surveillance procedure

1. The European Community will monitor the prices in each Member State for imported frozen lamb carcases from Australia on the basis of the average prices over each monthly period.

2. The relationship between the prices for imported frozen lamb carcases from Australia in each Member State and the market prices for Community-produced lamb in each such Member State will be compared with the benchmark level specified below for each such Member State. If this comparison indicates that the price relationship has, in two Member States in the same month, moved below the benchmark levels for those Member States, technical consultations will take place at the request of either Party to determine factors causing the downward movement. The factors that will be taken into account by the parties in such consultations shall include traditional and seasonal price relationships and fluctuations, the prices of cuts, the impact of prices of other meats, and other exceptional factors.

>TABLE>

3. In the event that the downward movement of the relationship between prices for Australian frozen lamb carcases and Community-produced lamb below the benchmark levels in the particular Member States under consideration and their remaining at such low levels is indicative of a problem, the Parties shall consider any recommendations arising out of the technical consultations for the resolution of the problem. If the problem identified is attributable to the prices at which Australian frozen lamb carcases are being sold in those Member States by Australian exporters then Australia would take what action is available to it to restore the price relationship between frozen lamb carcases and Community-produced lamb in those Member States to the benchmark levels.

4. Should the Parties in the technical consultations fail to reach agreement on appropriate measures to resolve the problem, the Consultative Committee established under Clause 10 of the Principal Agreement may be convened at a senior policy level at the request of either Party to give the matter urgent consideration.

If agreement cannot be reached at official level, the matter may be referred by either party to the EC Commissioner for Agriculture and the Australian Minister of Trade Negotiations for resolution.

5. Australia and the European Community adopt as targets for achievement by the end of 1992 an improvement in the previously defined benchmark levels for Northern Member States by 5 percentage points and for Southern Member States by 8 percentage points.