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COM(76)263
Vol.1976/0083

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COMMISSION OFTHEEUROPEAN COMMUNITIE
«
COM(76)263 final .
Brussels .9 1976 .
Draft Commission Communication totheCouncil relating tothe
International Coffee Agreement ,1976
Recommendation forCouncil decisions concerning the signing
oftheAgreement on "behalf oftheCommunity andthenotificat­
ion ofprovisional application oftheAgreement
\
/
COK176 )'263 final

I. 'Activities oftheInternational Coffee Council inlQf?
relating tothenegotiation ofanew international arreement
TheInternational Coffee Agreement ,I968 ,extended in1973 without its
economic provisions ,expires on30September 1976 .Itwasthesubject of
fresh negotiations within theInternational Coffee Organization ,which led
totheconclusion oftheInternational Coff 4eeAgreement ,1976 , "the28th
session oftheInternational Coffee Council (London ,3November –3December 1975)«
ThenewAgreement ,which isopen forsignature from 31January to
31July 1976 ,should enter into force on1October 1976 foraperiod ofsix
years ,that istosayuntil 30September I982 .During thethird year ofits
life (i.e. before 30September 1979 )>"^heContracting Parties must notify
theUnited Nations oftheir intention tocontinue participating inthe
Agreement during thefollowing three years .
Like itsantecedents (I962 anclI968 ),thenewAgreement isbased on
export quotas calculated byreference tocertain price levels ,butmajor
adjustments have been made which should establish abetter balance between
theinterests oftheproducer and consumer countries .
Itishoped that theeconomic provisions ofthenewAgreement will prove
more flexible than those oftheearlier Agreements ,forwhile pursuing the
objective ofreducing fluctuations incoffee prices ,they should also beable
toadapt tothefundamental trends oftheworld market .
T-foin features ofthenew International Coffee Agreements 1J
-Export prices and quotas
TheInternational Coffee Council continues toplay nvital role inthis
area ;atthebeginning ofeach coffee year itfixes theprice bracket(s )
determining thelevel atwhich export quotas areintroduced ,suspended or
restored .Intheabsence ofaCouncil decision onprices ,however ,the
mechanism canfunction byrefereiioe totheaverage oftheprices of 'robustas 1
and'other mild arabicas' during 1975 (63.23 UScents/lb),which infact
constitutes thefloor price under theAgreement .Prom thesecond coffee year
t
(lOctober I977)i ifthere isstill noCouncil decision onprices ,theouota
%

machinery canoperate byreference to "theavorage oftheprices intho
preceding year ifthemarket prices depart from that average by15^or
moreeither waywithin aprice bracket ranging from63.23 to77.46 cents/lb^
itbeing understood that thelatter price isaceiling beyond which quotas
maynotbeintroduced unless theCouncil decides otherwise ".Itshould be.
noted that these prices mayberevised twice during thelife oftheAgreement ,
although this innoway implies indexation .
-Market cup-olios
The world market isdivided between the market ofthe member countries
subject toquota arrangements andthemarket ofnon-member countries not
r -
subject toquotas .Theconsumer countries that aremembers oftheAgreement ,
among which theEECaccoxxnts fornearly 40/f>ofworld imports ,should be
assured ,intheevent ofquotas being introduced ,that they will obtain
more regular coffee supplies than under thesystem setupbytheearlier
agreements ,forbasic quotas fixed inadvance foreach country arenolonger
laid down intheAgreement .Themethod ofcalculating annual export quotas ,
which theCouncil will fixeach year ,isbased ontheproportion of70$f >on
average exports effected inthepast andontheproportion of30$ontho
exporting member countries' ascertained stocks ,which should eliminate the
danger ofcertain exporting countries being allocated annual export quotas
which donotcorrespond totheir real export capacity during thereference
year ,ashappened inthepast ,particularly inthecase ofthemain exporting
country .Moreover ,theprovisions ontheredistribution ofanyproduction or
export shorfallo areaimed atdiscouraging producers from adopting aunilateral
policy ofdeliberately holding back stocks .Special measures areenvisaged
totake account oftheinterests ofsmall producer countries exporting ler.s
than 400,000 60-kilogramme bags ofcoffee peryear .
Intheevent ofquotas being established ,importing members
limit thoir imports from non-members ttoanannual volume which
reflects their traditional trade with those .calculated onthe
bapisoftheaverage for1971 to1974 orthat for197?to1974 ,whichever
ispreferred .
(l)77.46 cents «63.23 cents (Average ofprices ofrobustas andother
mild arabicas in1975 )+22.55 ».

-3-
–Promoting conr .utTmtion
Apromotion fund ,with resources which mayreach ^25million intwo
years thanks toacompulsory levy onthecoffee exports oftheexporting
members ,will contribute 50%ofthecost offinancing multiannual promotion
campaigns tostimulate consumption intheimporting countries ,with the
remainder being provided byinterested bodies inthose countries .
–Production and stocks nolicy
With aview tofacilitating thecoordination ofproduction policies ,
which mayrequire studies ox^hven technical assistance ,theCouncil may
fixafinancial contribution tobepaid bytheexporting countries tooffset
anyexpenditure thereon .TheCouncil will take measures toascertain the
stocks intheexporting countries andwill study onarrangement foran
international stock .
II.The r8le ofthe Community and theMember States inthenegotiations
Although theCommunity isnotamember oftheAgreement which was
extended in1973 without itseconomio provisions ,oneMember State nothaving
signed ,itparticipated inthenegotiations asanobserver ,asdidthat
Member State .Despite this unsatisfactory legal -situation
theCommission delegation ,pursuant tothe
Council Decision of18August 1972which wasvalid forthe1975negotiations ^^
made proposals atthepreparatory stage concerning theareas coming within
Community jurisdiction (Article 113)andthese were accepted byallthe
Member States andimplemented during thenegotiations ..Theprovisions enabling •
theCommunity toparticipate intheAgreement were oonfirmed andarrangements
were made toenable theCommunity tosign itonthesame basis asgovernments .
(l)Seedocument 247/75(COMER 33)of17February 1975 *

-4-
Thanks to "thespirit ofcooperation andthewill tosucceed displayed
"bythedelegations ,itwaspossible toharmonizo theMember States 1positions
'onthoother matters with aview tocommon action# Asatisfactory solution
wanthus found tothemost difficult questions ,such asthose concerning
prices and <ruo!,;».n .Inview oftheir important place inthenegotiations ,tho
spirit ofcompromise displayed bythedelegations ofthetwomain members of
theInternational Coffee Organization ,theUnited States andBrazil ,should
also beemphasized ,.
Onthoproducor countries' side ,thoAfrican countries ,including many
AGPStates ,andtheCentral American countries obtained satisfaction as
regards distribution ofthemarket ;they should nowobtain export quotas more
inline with their real production capacity since Brazil ,xvhose production
potential hasbeen cutfor some time byoneoftheworst frosts initshistory ,
has made concessions onthis vital issue .
Ill# The entry into force ofthe Agreement ;Comnusftion proposal
The1976 Agreement isopen forsignature until 31July 1976 inclusive
bytheContracting Parties totheextended I968 Agreement andbythe
Governments ^^invited tothenegotiating session *Itisscheduled toenter
into force provisionally ordefinitely on1October 1976 ,subject tothe
following conditions :notless than twenty exporting countries accounting
foratleast 80$ofthevotes andnotless than tonimporting countries
accounting foratleast 80$ofthevotes ,broken down asshown inAnnex IIto
theAgreement ,must have deposited their instrument ofratification orhave
(l)Pursuant toArtiole 4(3)ofthoAgreement ,theterm •Government 1is
deemed toapply totheEuropean Economio Community# .

-5-
given notification "bynotlater than 30September 1976 that they will apply
theAgreement provisionally .
Inview ofthegeneral satisfaction attheoutcome ofthenegotiations
onthin Agroomont ,which restores international cooperation inrenp^r.t of
thedeveloping countries' most important agricultural export following an
interruption ofthree years ,theCommission considers itmost derirable –
particularly as1976 is marked bythefourth session ofUNCTAD and
theConference onInternational Economic Cooperation -that theCommunity and
theMember States should Templets thenecessary procedures bythedate setso
astoenable thenew ^Agreement toenter into force .Asregards theprovision
coverod bythecommon commercial policy ,inorder tobeable toapply the
Agreement theCommunity will have toadopt before 30September 1976 thenecessary
rules fortheimport control system andforpossible restrictions onimports
from countries which arenotmembers oftheAgreement ,taking account ofthe
free movement offloods within thecommon customs territory and thecommon
measures forliberalizing trade with third countries .
The Commission therefore recommends that the Council :
-decidos that the1976 International Coffee Agreement will besigned aosoon
aspossible before 31July 1976 onbehalf oftheEuropean Economic Community
subject toconclusion oftheAgreement ;
-adopts ,inaccordance with thetext annexed hereto ,adecision tothe
effect that theCommunity will notify theSecretary –General ofthe
United Nations before 30September 1976that itwill apply theAgreement
provisionally ,asanimporting member ,when theAgreement enters into
force inaccordance with Article 61.Thetext oftheAgreement will be
annexed tothedecision ,which will bepublished intheOfficial Journal
oftheEuropean Communities .
Even ifone ormore Member States were unable tocomplete these formalities
within theperiod specified ,itshould still bepossible fortheCommunity to
dosoinorder toensure that throughout thecustoms territory oftheCommunity
therules oftheAgreement covered bythecommon commercial policy areapplied
asfrom theentry into force ofthenewAgreement on1October 1976 .
./•

-6-
Forconstitutional reasonsoneMemberStategaveanaccountduringthe
preparatorystageofthenegotiations ofthelogaldifficultiesitfaced
asregardstheprovisionalapplicationoftheAgreement,thatsuchan
undertakingentailedtheobligationtomakeafinanoialcontribution towards
theoostofadministering theAgreementforaperiodprecedingthecom­
pletionoftheratification procedures.
4
HeretheGommissioi^would pointoutthatinasimilarcasewhenthe
CounciladoptedtheDecisiononparticipation bytheCommunityinthe
negotiationofthesecondInternational CocoaAgreement,theCouncildrew
attentiontothespecialdifficulties ofthatMemberStateandexpressed
theviewthatasolutionshouldbeworkedoutatCommunitylevelsothat
thenewAgreementcouldbeappliedbyalltheMemberStatesandthe
Community.TheCommissionoonsidersthatthesameprocedureshouldbe
followedfortheInternational CoffeeAgreement.

COMMISSION
OFTHEEUROPEANCOMMUNITIES
Dirvctoratf-Ginvml forOw«'opir>«ntBrussels ,
DRAFT RECOMMENDATION FOR A.COUNCIL DECISION
onthenotification of -theprovisional application bythe
European Economic Community oftheInternational Coffee
i. Agreement ,1976
f :– : .
THECOUNCIL OPTHEEUROPEAN COMMUNITIES ,
Having regard totheTreaty establishing theEuropean Eoonomio
Community ,and inpartioular Article 113thereof ,
Having regard totherecommendation from theCommission ,
'rovisional Au«delaLo!200.8-1040Brunel»-T«l«phone7350040/7388040-
T«l«i"2J877COMEU 8"COMEUnBruiMIl"–

WhereaotheCouncilhasdecidedtosignbefore31July1976the
International CoffeeAgreement,1976,on"behalfoftheCommunity,
subjeottooonolusionoftheAgreement;
WhereastheCommunityshouldgivenotification thatitwillapply
theAgreementprovisionally pendingcompletionoftheinternal
proceduresnecessaryforitsoonolusion,
HASADOPTEDTHISDECISION:
SoleArticle
1.Inaccordance withArticle61oftheInternational Coffee
Agreement,1976,theEuropeanEconomioCommunitywillnotifythe
Secretary-General oftheUnitedNationsbefore30September1976
thatitwillapplytheAgreementprovisionally ,asanimporting
member,whentheAgreemententersintoforceinacoordanoewith
thoeaxdArticle.
ï
ThetextoftheAgreementisannexedtothisDecision.
*
2.ThePresidentoftheCounoilisherebyauthorizedtodesignate
thepersonempoweredtogivethisnotification ^*.
ThedatefromwhiohtheAgreementwillbeappliedprovisionally
willbepublishedintheOffioialJournaloftheEuropean
Communities .

Notification ofproviaional application
Inaccordance with Artiole 61ofthe International Coffee
Agreement ,1976 ,theEuropean Economic Community hereby gives
notification ofitsprovisional application .Ingiving this notifi­
cation theCommunity will oonsider itsolf provisionally an
importing member oftheabove Agreement ,with all therights
andobligations arising therefrom ,when theAgreement enters into
foroe inaccordance with the said Artiole and until the date on
which thedeoision ooncluding theAgreement isdeposited bythe
Counoil oftheEuropean Communities .
!
i