RESOLUTION(1)

on rum

The ACP-EU Joint Assembly,

- meeting in Nassau (Bahamas) from 11 October to 14 October 1999,

A. reaffirming its resolution on rum adopted at the 28th session held in Strasbourg (France) from 29 March to 1 April 1999,

B. recalling the resolution on rum adopted at the 69th session of the ACP Council of Ministers held in Brussels (Belgium) from 26-28 July, 1999,

C. recalling that the trade objective of the Lomé IV Convention is to promote trade between the ACP and the Community and whereas the provisions of Protocol 6 for the duty-free entry of ACP rum into the EU market were designed to ensure that developing ACP countries secure a share of the rum market commensurate with the needs of their economic development,

D. having regard to the importance of the rum trade with the EU to the economies of ACP rum producing states and the contribution of the rum industry to foreign exchange earnings, employment and hence, the socio-economic development and political stability of the states concerned,

E. whereas the white spirits agreement initiated during the first WTO ministerial conference and the subsequent EU/US Memorandum of Understanding of March 1997 for the elimination of tariffs on certain spiritious beverages eroded the ACP preferences in the rum trade and exposed ACP producers to competition from subsidised third-country suppliers,

F. recalling the March 24 1997 Declaration of the EU Council and the Commission to the effect that the EU/US Memorandum of Understanding will not change in any way the terms of access enjoyed by ACP rum exports to the Community market in the framework of the Lomé Convention and do not prejudge the future of the regime after the Convention expires in 2000,

G. considering the competition facing ACP rum from other products labelled as rum, and the substantial investments made in developing and marketing ACP rum within the constraints of the quota system, which to a large extent restricted trade to low-margin bulk rum,

H. noting the extensive promotion campaign that will need to be undertaken by the ACP to develop a market for higher-quality branded rums in order to reduce their dependence on commodity rum, and recognising that this process would require an extended period so as to ensure their ability to compete successfully in a tariff free market with rums from other regions,

I. having regard to the proposal submitted by the ACP outlining the requirements of the ACP rum industry during the post Lomé IV period,

1. Calls on the Community and Member States to:

i. fully honour their commitment under Protocol 6 on rum in the IV Lomé Convention and also extend the preferences beyond 2000 to permit the ACP to develop their traditional trade flows with the EU to its full potential;

ii. ensure that, as stated in the 24 March 1997 Declaration by the Council and Commission given in the context of the EU/US Memorandum of Understanding, the terms of access for ACP rum exports are not adversely affected and their competitive position in the market is maintained;

iii. index the pricing mechanism of the EU/US Memorandum of Understanding and retain the present tariff level on low-priced non-ACP rum as called for in the Memorandum of Understanding, thereby safeguarding the ACP against unfair competition from third-country suppliers;

iv. reconsider the ACP proposal on rum and ensure that arrangements are made prior to the year 2000 for the continuation of ACP preferences and that adequate resources are provided for marketing support to assist the ACP in promotion and expansion of sales on the Community market;

v. maintain strict enforcement without derogations of EU rules limiting commercial use of the term "rum" as described in Article 4 of the Council regulation (EC) N° 1576/89;

vi. support fully the pm budget line proposed by the European Parliament to fund preparatory actions to enhance competitiveness among traditional ACP exporters.

2. Instructs its Co-Presidents to forward this resolution to the ACP-EU Council and the Commission

(1) Adopted by the ACP-EU Joint Assembly on 14 October 1999 in Nassau (Bahamas).