Proposal for a COUNCIL DECISION relating to the conclusion of an Agreement between the European Community and the Republic of Malta concerning fish and fishery products, in the form of an additional Protocol completing the Agreement establishing an association between the European Economic Community and Malta.

(presented by the Commission)

EXPLANATORY MEMORANDUM

On 4 April 2001, the Council authorised the Commission to undertake negotiations on behalf of the Community with Malta in order to further liberalise reciprocal trade in fish and fishery products.

Negotiations with Malta were held on 23 April. The two parties agreed on a model for simple, gradual and reciprocal tariff concessions. The details of the bilateral concessions are contained in the Agreed Minutes signed by each head of delegation.

Malta has already eliminated all import duties (and similar financial instruments, with the exception of VAT) on fish and fishery imports from the Community. The Community has a large trade surplus vis-à-vis Malta in the fisheries sector and the major Maltese export interest is linked to sea bass and sea bream farmed entirely from raw materials imported from the Community.

In these conditions, as regards sea bass, sea bream and Gilt-head seabreams, it was agreed that the Community will establish a tariff quota common for these species. The tariff quota, based on the traditional trade, will be 1500 tonnes at 7.5% at the entry into force of this agreement. It will be increased to 1750 tonnes at 0% one year after the entry into force of this agreement and eliminated two years after the entry into force of this agreement.

From the date of entry into force of this agreement, a one third reduction of the tariff duties applied to all other fish and fishery products as covered by the definition, set out in Regulation (EC) No 104/2000, will be applied. The following year a further reduction of one third will be applied. Two years after the entry into force of the agreement, full free trade of all fish and fishery products will be applied.

The Commission is of the opinion that the results of the technical negotiations represent an acceptable result which, in a simple administrative manner, and on a gradual basis, will lead to full free trade.

In the light of the above, the Council is requested to adopt the present decision to add a Protocol concerning trade concessions in the fisheries sector to the Association Agreement with Malta.

2001/0206 (ACC)

Proposal for a COUNCIL DECISION relating to the conclusion of an Agreement between the European Community and the Republic of Malta concerning fish and fishery products, in the form of an additional Protocol completing the Agreement establishing an association between the European Economic Community and Malta.

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 133 in conjunction with Article 300(2), first sub-paragraph, first sentence, thereof,

Having regard to the proposal from the Commission,

Whereas:

(1) It is desirable to complete by means of an additional Protocol the Agreement establishing an association between the European Economic Community and Malta [1], so as to provide for preferential conditions for the importation into the Community of certain fish and fishery products originating in the Republic of Malta, and into the Republic of Malta of certain fish and fishery products originating in the Community;

[1] OJ L61, of 14.3.1971, p. 3.

(2) To that end a new Protocol laying down the trade arrangements for certain fish and fishery products should be added to the said Association Agreement;

(3) The Agreement in the form of a Protocol should be approved,

HAS DECIDED AS FOLLOWS:

Article 1

The Agreement between the European Community and the Republic of Malta in the form of an additional Protocol concerning fish and fishery products, completing the Agreement establishing an association between the European Economic Community and Malta, is hereby approved on behalf of the Community.

The text of the Agreement in the form of a Protocol is attached to this Decision.

Article 2

A tariff quota with order number 09.1461 covering the first 12 months of the agreement shall be opened for 1500 tonnes for Sea bass (Dicentrarchus labrax), Sea bream (Dentex dentex and Pagellus spp.) and Gilt-head seabreams (Sparus aurata) falling under subheadings 0302 69 94, 0302 69 61 and 0302 69 95 originating in Malta at a duty rate 7,5%. One year later the tariff quota will be settled for 1750 tonnes at 0%. This tariff quota shall be administrated by the Commission in accordance with Articles 308a and 308b of Regulation (EC) No 2454/93 [2].

[2] OJ L 253, 11.10.1993, p. 1. Regulation as last amended by Regulation (EC) No 993/2001 OJ L 141, 28.5.2001, p.1

Article 3

The President of the Council is authorised to designate the person empowered to sign the Agreement in order to bind the Community.

Done at Brussels,

For the Council

The President

ANNEX

AGREEMENT BETWEEN THE EUROPEAN COMMUNITY AND THE REPUBLIC OF MALTA CONCERNING FISH AND FISHERY PRODUCTS IN THE FORM OF AN ADDITIONAL PROTOCOL COMPLETING THE AGREEMENT ESTABLISHING AN ASSOCIATION BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND MALTA

DRAFT ADDITIONAL PROTOCOL

LAYING DOWN THE TRADE ARRANGEMENTS FOR CERTAIN FISH AND FISHERY PRODUCTS BETWEEN THE EUROPEAN COMMUNITY AND THE REPUBLIC OF MALTA

THE EUROPEAN COMMUNITY, hereinafter referred to as "the Community" of the one part, and

THE REPUBLIC OF MALTA, hereinafter referred to as "Malta", of the other part,

WHEREAS the Agreement establishing an association between the European Economic Communities and Malta, hereinafter referred to as 'the Association Agreement", was signed in Valetta on 5 December 1970 and entered into force in April 1971;

WHEREAS Council Regulation (EC) No 3010/95 suspending totally or partially the customs duties applicable to certain products falling within Chapters 1 to 24 originating in Malta was last amended by Council Regulation No 779/98;

WHEREAS technical negotiations based on Article 2 of the Association Agreement were carried out and successfully concluded between the Community and Malta to agree on reciprocal tariff concessions in the fisheries sector;

WHEREAS following the terms of Article 3(2) of this Association Agreement fish and fishery products originating in the Community are imported duty free into Malta;

WHEREAS the negotiated concessions in the fisheries sector shall affect the bilateral concessions granted under the Association Agreement, which should, therefore, be amended by means of a Protocol adjusting the trade aspects of the Association Agreement;

WHEREAS the Community and Malta also agreed on an administratively simple manner of implementing the negotiated tariff concessions as soon as possible on a gradual basis;

HAVE DECIDED to apply the agreed tariff concessions in view of establishing full free trade of all fish and fishery products:

Article 1

From the date of entry into force of this Protocol, the Community shall apply a one third reduction of the tariff duties for fish and fishery products as defined in Article 1 of Council Regulation (EC) No 104/2000, other than those mentioned in Article 2.

One year after the date of entry into force of this Protocol, the Community shall apply a further one third reduction of the tariff duties as they were at the time of entry into force of this Protocol.

Two years after the date of entry into force of this Protocol, full free trade of all fish and fishery products will be applied by both Parties, including for those mentioned in Article 2.

Article 2

From the date of entry into force of this Protocol, the Community will open a Community tariff quota of 1500 tonnes at 7,5 % for Sea bass (Dicentrarchus labrax), Sea bream (Dentex dentex and Pagellus spp.) and Gilt-head seabreams (Sparus aurata) falling under subheadings 0302 69 94, 0302 69 61 and 0302 69 95 originating in Malta. One year later the tariff quota will be settled for 1750 tonnes at 0 %; two years later the tariff quota will be eliminated.

For quantities imported into the Community above the tariff quotas, the provisions of Article 1 shall apply.

Article 3

The calculation of the reductions mentioned in Article 1 will be carried out using common mathematics principles taking into account that:

(a) all the figures which have less than 50 (included) after the decimal point should be rounded down to the nearest whole number;

(b) all the figures which have more than 50 after the decimal point should be rounded up to the nearest whole number;

(c) all the tariffs below 2 % should automatically be fixed at 0%.

Article 4

In case Malta's application for accession to the European Union is suspended, both parties will meet within a six month period to review the agreement in view of the new situation.

Article 5

This Protocol will enter into force on the first day of the month following the date on which the Parties have notified each other the accomplishment of their internal procedures.

FINANCIAL STATEMENT

1. Title of operation

Proposal to add a Protocol to the Association Agreement with Malta implementing an agreement on concessions on fish and fisheries products. These concessions have been agreed and will be implemented over a period of two years, leading to full trade liberalisation of the products concerned.

2. Budget heading(s) involved

Chapter 12, Article 120

3. Legal basis

Article 133 in conjunction with Article 300(2) of the Treaty establishing the European Community

4. Description of operation

4.1 General objective

Full trade liberalisation in fish and fishery products in preparation for accession of Malta to the European Community.

5. Classification of expenditure or revenue

5.1 Type of revenue involved

Import duties

6. Type of expenditure or revenue

- The proposed operation will cause a reduction in import duties levied on fish and fishery products originating in Malta.

7. Financial impact

7.1 Method of calculating total cost of operation (relation between individual and total costs)

Only a few products are imported from Malta, the following table gives the imports in 1998, 1999 and 2000 and the average duties paid.

The estimated average duty level for fresh and chilled fish is 12% and the estimated average duty level for canned fish is 24%.

>TABLE POSITION>

Import duties levied in 1999 showed an increase of approximately 25% over 1998; duties in 2000 showed a decrease of 2% over 1999. A decrease in production of fresh and chilled fish (sea bass and sea bream) is awaited in 2001 and 2002, but it seems that the canned fish imports could be the same as in 2000. In consequence Year 2002 could be similar to year 1999 for fresh fish but similar to 2000 for canned fish, and a reasonable increase of 20% could affect both sectors in year 2003.

7.2 Itemised breakdown of cost

Commitment appropriations EUR million (at current prices)

>TABLE POSITION>