[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 25.11.2005

COM(2005) 601 final

2005/0230 (ACC)

Proposal for a

COUNCIL DECISION

on the conclusion of an agreement in the form of an exchange of letters between the European Community and Thailand pursuant to Article XXVIII of GATT 1994 relating to the modification of concessions with respect to rice provided for in EC Schedule CXL annexed to GATT 1994

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. On 26 June 2003, the Council authorised the Commission to notify the WTO that the European Community intended to modify concessions on products of HS codes 1006 20 (husked rice), 1006 30 (milled rice) included in Schedule CXL of the European Community annexed to GATT 1994. Accordingly, the European Community has notified the WTO on 2 July 2003 of its intention to modify certain concessions in EC Schedule CXL.

2. Negotiations have been conducted by the Commission in consultation with the Committee established by Article 133 of the Treaty and within the framework of the negotiating directives issued by the Council.

The Commission has negotiated with the United States of America, having a principal supplying interest in products of HS code 1006 20 (husked rice) and substantial supplier interest in product of HS code 1006 30 (milled rice), Thailand, having a principal supplying interest in product of HS code 1006 30 (milled rice) and substantial supplier interest in product of HS code 1006 20 (husked rice) and India and Pakistan, each having a substantial supplier interest in product of HS code 1006 20 (husked rice).

3. The agreements with India and Pakistan have been approved on behalf of the Community by Council Decision 2004/617/EC and Council Decision 2004/618/EC of 11 August 2004. A new tariff rate for husked and milled rice was fixed by Council Decision 2004/619/EC of 11 August 2004. The agreement with the United States was approved by Council Decision 2005/476/EC of 21 June 2005.

4. This proposal asks the Council to approve the agreement in the form of an exchange of letters between the European Community and Thailand. This completes the negotiations under Article XXVIII of GATT 1994 relating to the modification of concessions with respect to rice provided for in EC Schedule CXL annexed to GATT 1994.

5. As the necessary modifications to Council Regulation (EC) No 1785/2003 require the European Parliament’s opinion it is necessary to provide for the Commission to put in place the necessary transitional arrangements. Therefore, in order to ensure the application of this agreement from 1 September 2005, the decision enables the Commission to derogate from Regulation (EC) No 1785/2003 for a transitional period, i.e. until the modification has entered into force, but not later than 30 June 2006. This is the same date as provided in Council Decisions 2004/617/EC, 2004/618/EC, 2004/619/EC and 2005/476/EC.

The Commission will present a proposal for the necessary modification to the Council Regulation as soon as possible.

2005/0230 (ACC)

Proposal for a

COUNCIL DECISION

on the conclusion of an agreement in the form of an exchange of letters between the European Community and Thailand pursuant to Article XXVIII of GATT 1994 relating to the modification of concessions with respect to rice provided for in EC Schedule CXL annexed to GATT 1994

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal from the Commission,

Whereas:

(1) On 26 June 2003, the Council authorised the Commission to open negotiations under Article XXVIII of the GATT 1994 with a view to modify certain concessions for rice. Accordingly, the European Community notified the WTO on 2 July 2003 of its intention to modify certain concessions in EC Schedule CXL.

(2) Negotiations have been conducted by the Commission in consultation with the Committee established by Article 133 of the Treaty and within the framework of the negotiating directives issued by the Council.

(3) The Commission has negotiated with the United States of America, having a principal supplying interest in products of HS code 1006 20 (husked rice) and substantial supplier interest in products of HS code 1006 30 (milled rice), Thailand, having a principal supplying interest in products of HS code 1006 30 (milled rice) and substantial supplier interest in products of HS code 1006 20 (husked rice) and India and Pakistan, each having a substantial supplier interest in products of HS code 1006 20 (husked rice).

(4) The agreements with India and with Pakistan have been approved on behalf of the Community by Council Decisions 2004/617/EC[1] and 2004/618/EC[2] respectively. A new tariff rate for husked rice (CN code 1006 20) and milled rice (CN code 1006 30) was fixed by Council Decision 2004/619/EC[3]. The agreement with the United States was approved by Council Decision 2005/476/EC[4].

(5) The Commission has now successfully negotiated an agreement in the form of an exchange of letters between the European Community and Thailand which should therefore be approved.

(6) In order to ensure that the agreement may be fully applied as from 1 September 2005 and pending the amendment of Council Regulation (EC) No 1785/2003 of 29 September 2003 on the common organisation of the market in rice[5], the Commission should be authorised to adopt temporary derogations from that Regulation and to adopt the necessary implementing measures.

(7) The measures necessary for the implementation of this Decision should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission[6],

HAS DECIDED AS FOLLOWS:

Article 1

The agreement in the form of an exchange of letters between the European Community and Thailand pursuant to Article XXVIII of GATT 1994 relating to the modification of concessions with respect to rice provided for in EC Schedule CXL annexed to GATT 1994 is hereby approved on behalf of the Community.

The text of the agreement is attached to this Decision.

Article 2

1. To the extent necessary to permit the full application of this agreement as from 1 September 2005, the Commission may derogate from Regulation (EC) No 1785/2003, in accordance with the procedure referred to in Article 3(2) of this Decision, until that Regulation is amended but at the latest until 30 June 2006.

2. The Commission shall adopt the detailed rules for implementing the agreement in accordance with the procedure laid down in Article 3(2) of this Decision.

Article 3

1. The Commission shall be assisted by the Management Committee for Cereals instituted by Article 25 of Regulation (EC) No 1784/2003[7].

2. Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply.

The period provided for in Article 4(3) of Decision 1999/468/EC shall be one month.

Article 4

The President of the Council is hereby authorised to designate the person empowered to sign the agreement in order to express the consent of the Community to be bound thereby [8].

Done at Brussels,

For the Council

The President

ANNEX

AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS between the European Community and Thailand pursuant to Article XXVIII of GATT 1994 relating to the modification of concessions with respect to rice provided for in EC Schedule CXL annexed to GATT 1994

Letter No 1 Letter from the European Community

Brussels, ………..

Sir,

Following negotiations between the European Community (EC) and the Kingdom of Thailand (Thailand) under Article XXVIII of GATT 1994 for the modification of concessions with respect to rice provided for in the EC Schedule CXL annexed to the General Agreement on Tariffs and Trade 1994 (GATT 1994), the EC and Thailand agree to the conclusions as outlined below.

1. The bound rates of duty for husked rice (HS subheading 1006 20), for semi-milled and milled rice (HS subheading 1006 30) and for broken rice (HS subheading 1006 40) shall be respectively EUR 65/t, EUR 175/t and EUR 128/t.

2. The EC shall apply a rate of duty for semi-milled and milled rice (HS subheading 1006 30) in accordance with paragraphs 3 to 6.

3. The Annual Reference Import Level shall be calculated as the average volume of total semi-milled and milled rice imports entering the EC-25 from all origins in the marketing years (from 1 September to 31 August) 2001/02–2003/04 plus 10% (i.e. 337 168 tonnes).

4. Six-Month Reference Import Level : in each marketing year, a six-month reference import level shall be calculated as 47 percent of the annual reference import level calculated in paragraph 3 above (i.e. 158 469 tonnes).

5. Mid-Year Adjustment to Applied Tariff Rate : within 10 days after the end of the first six months of each marketing year, the EC shall review and, if necessary, adjust the applied tariff rate as follows:

(a) if actual semi-milled and milled rice imports for the just-completed six-month period are more than 15 percent above the six-month reference import level for that period, as calculated under paragraph 4 above (i.e. more than 182 239 tonnes), the EC shall apply a tariff rate of EUR 175/t;

(b) if actual semi-milled and milled rice imports for the just-completed six-month period are less than or equal to the six-month reference import level for that period, as calculated under paragraph 4 above, increased by 15 percent (i.e. less than or equal to 182 239 tonnes), the EC shall apply a tariff rate of EUR 145/t.

For purposes of (a) and (b) above, actual semi-milled and milled rice imports are all imports entering the EC-25 from all origins under the HS subheading 1006 30.

6. End-of-Year Adjustment to Applied Tariff Rate : within 10 days after the end of the marketing year, the EC shall review and, if necessary, adjust the applied tariff rate as follows:

(a) if actual semi-milled and milled rice imports for the just-completed marketing year are more than 15 percent above the annual reference import level for that 12-month period, as calculated under paragraph 3 above (i.e. more than 387 743 tonnes), the EC shall apply a tariff rate of EUR 175/t;

(b) if actual semi-milled and milled rice imports for the just-completed marketing year are less than or equal to the annual reference import level for that 12-month period, as calculated under paragraph 3 above, increased by 15 percent (i.e. less than or equal to 387 743 tonnes), the EC shall apply a tariff rate of EUR 145/t.

For purposes of (a) and (b) above, actual semi-milled and milled rice imports are all imports entering the EC-25 from all origins under the HS subheading 1006 30.

7. TRQ : the EC shall open a new annual TRQ of 13 500 tonnes of semi-milled and milled rice of which 4 313 tonnes shall be allocated to Thailand. The in-quota rate shall be zero.

8. Broken rice : for rice with HS subheading 1006 40, the EC shall apply an import duty of EUR 65/t.

9. The volume of the current TRQ of broken rice shall be increased to 100 000 tonnes. The in-quota duty shall be equal to the duty of paragraph 8 above less 30.77 percent.

10. Data : the calculation of the annual and six-month actual import levels under paragraphs 5 and 6 above shall be determined using EC rice imports license data. The EC shall publish these data on the internet on a weekly basis.

11. Transparency : the EC shall promptly provide public notice of any adjustment in the applied tariff rate.

12. Consultation : at the request of either party, the parties shall, within 30 days of the receipt of such a request, enter into consultations on matters covered by this agreement.

13. The provisions of this agreement shall be applicable as from 1 September 2005.

I would be grateful if you could confirm the agreement of your Government to the above.

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

On behalf of the European Community

Letter No 2 Letter from Thailand

Bangkok, ………..

Sir,

Following negotiations between the European Community (EC) and the Kingdom of Thailand (Thailand) under Article XXVIII of GATT 1994 for the modification of concessions with respect to rice provided for in the EC Schedule CXL annexed to the General Agreement on Tariffs and Trade 1994 (GATT 1994), the EC and Thailand agree to the conclusions as outlined below.

1. The bound rates of duty for husked rice (HS subheading 1006 20), for semi-milled and milled rice (HS subheading 1006 30) and for broken rice (HS subheading 1006 40) shall be respectively EUR 65/t, EUR 175/t and EUR 128/t.

2. The EC shall apply a rate of duty for semi-milled and milled rice (HS subheading 1006 30) in accordance with paragraphs 3 to 6.

3. The Annual Reference Import Level shall be calculated as the average volume of total semi-milled and milled rice imports entering the EC-25 from all origins in the marketing years (from 1 September to 31 August) 2001/02–2003/04 plus 10% (i.e. 337 168 tonnes).

4. Six-Month Reference Import Level : in each marketing year, a six-month reference import level shall be calculated as 47 percent of the annual reference import level calculated in paragraph 3 above (i.e. 158 469 tonnes).

5. Mid-Year Adjustment to Applied Tariff Rate : within 10 days after the end of the first six months of each marketing year, the EC shall review and, if necessary, adjust the applied tariff rate as follows:

(a) if actual semi-milled and milled rice imports for the just-completed six-month period are more than 15 percent above the six-month reference import level for that period, as calculated under paragraph 4 above (i.e. more than 182 239 tonnes), the EC shall apply a tariff rate of EUR 175/t;

(b) if actual semi-milled and milled rice imports for the just-completed six-month period are less than or equal to the six-month reference import level for that period, as calculated under paragraph 4 above, increased by 15 percent (i.e. less than or equal to 182 239 tonnes), the EC shall apply a tariff rate of EUR 145/t.

For purposes of (a) and (b) above, actual semi-milled and milled rice imports are all imports entering the EC-25 from all origins under the HS subheading 1006 30.

6. End-of-Year Adjustment to Applied Tariff Rate : within 10 days after the end of the marketing year, the EC shall review and, if necessary, adjust the applied tariff rate as follows:

(a) if actual semi-milled and milled rice imports for the just-completed marketing year are more than 15 percent above the annual reference import level for that 12-month period, as calculated under paragraph 3 above (i.e. more than 387 743 tonnes), the EC shall apply a tariff rate of EUR 175/t;

(b) if actual semi-milled and milled rice imports for the just-completed marketing year are less than or equal to the annual reference import level for that 12-month period, as calculated under paragraph 3 above, increased by 15 percent (i.e. less than or equal to 387 743 tonnes), the EC shall apply a tariff rate of EUR 145/t.

For purposes of (a) and (b) above, actual semi-milled and milled rice imports are all imports entering the EC-25 from all origins under the HS subheading 1006 30.

7. TRQ : the EC shall open a new annual TRQ of 13 500 tonnes of semi-milled and milled rice of which 4 313 tonnes shall be allocated to Thailand. The in-quota rate shall be zero.

8. Broken rice : for rice with HS subheading 1006 40, the EC shall apply an import duty of EUR 65/t.

9. The volume of the current TRQ of broken rice shall be increased to 100 000 tonnes. The in-quota duty shall be equal to the duty of paragraph 8 above less 30.77 percent.

10. Data : the calculation of the annual and six-month actual import levels under paragraphs 5 and 6 above shall be determined using EC rice imports license data. The EC shall publish these data on the internet on a weekly basis.

11. Transparency : the EC shall promptly provide public notice of any adjustment in the applied tariff rate.

12. Consultation : at the request of either party, the parties shall, within 30 days of the receipt of such a request, enter into consultations on matters covered by this agreement.

13. The provisions of this agreement shall be applicable as from 1 September 2005.

I would be grateful if you could confirm the agreement of your Government to the above.

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

For the Kingdom of Thailand

FINANCIAL STATEMENT |

1. | BUDGET HEADING: Chapter 10 – Agricultural duties | PDB 2006 APPROPRIATIONS: EUR 763,5 Mio |

2. | TITLE: Proposal for a Council Decision on the conclusion of an agreement in the form of an exchange of letters between the European Community and Thailand pursuant to Article XXVIII of GATT 1994 relating to the modification of concessions with respect to rice provided for in EC Schedule CXL annexed to GATT 1994 |

3. | LEGAL BASIS: Article 133 of the Treaty in conjunction with the first sentence of the first subparagraph of Article 300(2). |

4. | AIMS: To set out the method of calculation of applied duties for rice. |

5. | FINANCIAL IMPLICATIONS | 12-MONTH PERIOD (EUR million) | CURRENT FINANCIAL YEAR 2005 (EUR million) | FINANCIAL YEAR 2006 and following years (EUR million) |

5.0 | EXPENDITURE – CHARGED TO THE EC BUDGET (REFUNDS/INTERVENTIONS) – NATIONAL AUTHORITIES – OTHER | – | – | – |

5.1 | REVENUE – OWN RESOURCES OF THE EC (LEVIES/CUSTOMS DUTIES) – NATIONAL | – | – | (1) – 6,3 |

2007 | 2008 | 2009 | 2010 |

5.0.1 | ESTIMATED EXPENDITURE | – | – | – | – |

5.1.1 | ESTIMATED REVENUE | (1) | (1) | (1) | (1) |

5.2 | METHOD OF CALCULATION: – |

6.0 | CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE CURRENT BUDGET? | N / A |

6.1 | CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET? | N / A |

6.2 | WILL A SUPPLEMENTARY BUDGET BE NECESSARY? | YES NO |

6.3 | WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? | YES NO |

OBSERVATIONS: (1) It is estimated that the measure has a negative financial impact on forecast of own resources for the 2006 financial year and the following financial years. The level of the net amount is estimated to – EUR 6,3 million. |

[1] OJ L 279, 28.8.2004, p. 17.

[2] OJ L 279, 28.8.2004, p. 23.

[3] OJ L 279, 28.8.2004, p. 29.

[4] OJ L 170, 1.7.2005, p. 67.

[5] OJ L 270, 21.10.2003, p. 96.

[6] OJ L 184, 17.7.1999, p. 23.

[7] OJ L 270, 21.10.2003, p. 78.

[8] The date of entry into force of the agreement will be published in the Official Journal of the European Union .