No C 131/76 Official  Journal  of the European  Communities 12. 6. 76 
Organization  —  particularly  on  the  World 
Employment  Conference,  the negotiation  of new 
conventions  and  work  on the implications  of the 
new international  division  of labour  for employ-
ment  in the industrialized  countries. 
3.4.8.  As  far  as the  Economic  and  Social 
Committee  is concerned,  this  cooperation  should 
take the form  of, for instance: 
— systematic  exchange  of information  and 
documents  by the International  Labour  Office 
and the Committee; 
— participation  — on lines  to be determined  — 
of Committee  representatives  in  certain 
activities  of the  International  Labour  Office 
(employment  conference,  regional  conferen-
ces, seminars,  etc.); 
Done  at Brussels,  1 April  1976. — arrangements  allowing  the Committee  to fur-
ther and  arrange  contacts  and  consultations 
between  the 'social  partners'  of the Member 
States,  in particular  on the  occasion  of the 
annual  labour  conference. 
General  conclusions 
4. If  the Committee  proposals  are implemen-
ted, they  will  open  the way  to improved  cooper-
ation  between  the national  and  EEC  authorities. 
This would  seem  to be a prerequisite  for  any 
major  progress  towards  the  coordination  of 
employment  policies  proper.  Progress  in the coor-
dination  of employment  policies  will  also  depend 
on: (i) the formulation  of common  aims  in the 
field  of full  and  better  employment;  and  (ii) the 
amount  of progress  made  towards  economic  and 
monetary  union. 
The Chairman 
of the Economic  and  Social  Committee 
Henri  CANONGE 
Opinion  on the proposal  for a Council  Regulation  on the transitional  common 
organization  of the market  in sheepmeat 
The text  referred  to the Committee  has been  published  in Official  Journal  of the 
European  Communities  No  C 243  of 23 October  1975,  page  6. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 26 September  1975,  the Council  referred  the abovementioned  proposal  to the 
Economic  and  Social  Committee  in accordance  with  Articles  43 and  198  of the 
Treaty  establishing  the European  Economic  Community. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at 
its 138th  plenary  session,  held  in Brussels  on 31 March  and 1 April  1976. 
The full text of the opinion  is as follows: 
12. 6. 76 Official  Journal  of the European  Communities No C 131/77 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the request  for an opinion  made 
by the Council  of the European  Communities  on 
26 September  1975, 
Having  regard  to the  Treaty  establishing  the 
European  Economic  Community,  and  in partic-
ular Articles  43 and  198  thereof, 
Having  regard  to the decision  taken  by its Bureau 
on 25 October  1975,  instructing  the Section  for 
Agriculture  to draw  up an opinion  on the matter, 
Having  regard  to the  oral  report  made  by the 
rapporteur,  Sir Gwilym  Williams, 
Having  regard  to the opinion  of the Section  for 
Agriculture  of March  1976, 
Having  regard  to the discussions  at its meeting  on 
31 March  1976  (138th  plenary  session  of 31 
March  and  1 April  1976), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 49 votes  to 13 with  11 abstentions: 
After  carefully  studying  the Commission  propo-
sal, the  Committee  would  make  the  following 
comments,  which  fall in three  parts: 
1. General  observations  on the  need  for a per-
manent  market  organization; 
2. General  observations  on the proposal  presen-
ted by the  Commission  conceriing  a transi-
tional  organization; 
3. Specific  observations  on the Commission  pro-
posal. 
1. General  observations  on the  need  for a per-
manent  market  organization 
1.1. The  Economic  and  Social  Committee 
demanded  the establishment  of a comn  on market organization  for sheep  production  as long  ago  as 
1960.  The  Committee  regrets  that  15 years  later 
and about  three  years  after  the accession  of the 
new Member  States  no  definitive  proposal 
regarding  such  a market  organization  has  yet 
been  presented  by the Commission.  The  Commit-
tee therefore  urges  the  Commission  to present 
without  delay  the  proposal  for  a Regulation 
establishing  a permanent  and  comprehensive 
organization  of the  sheep  production  sector.  At 
the same  time  the  Committee  firmly  advocates 
that effective  proposals  be made  for wool  which 
is an integral  part  of sheep  production. 
1.2. In  this  connection  the Committee  emphas-
izes that  the lack  of a common  market  organiza-
tion in the sheepmeat  and  wool  sectors  has had 
serious  consequences  for all sheep  farmers,  par-
ticularly  in areas  where  sheep  rearing  is the 
mainstay  of the agricultural  economy  such  as, for 
example,  in certain  Mediterranean  and  other 
Community  regions  where  sheep  raising  is wide-
spread.  Attention  has  been  drawn  to the  pro-
blems  and  potential  of sheep  production  in these 
areas,  in particular  in the study  of the Section  for 
Agriculture  on current  prospects  for agricultural 
products  of the EEC's  Mediterranean  areas.  The 
accession  of the  United  Kingdom  and  Ireland, 
where  sheepmeat  is produced  and  consumed  on a 
large  scale,  has  added  a new  dimension  to the 
consideration  of future  policies  on sheepmeat 
production  and  marketing. 
1.3. The  Committee  is of the opinion  that  it is 
not possible  to envisage  transitional  measures  for 
the approximation  of prices  in order  to arrive  at a 
single  Community  market  for sheepmeat  until  the 
principles  have  been  defined  on which  the future 
organization  of the market  will  be based,  govern-
ing not only  the system  for trade  between  Mem-
ber States,  but likewise,  the system  for trade  with 
third  countries.  These  principles  should  be aimed 
at attaining  the  objectives  of Article  39 of the 
EEC  Treaty,  and  guarantee  not only  the develop-
ment  of trade  between  Member  States,  but also  a 
fair income  for farmers  and  reasonable  prices  for 
consumers. 
1.4. The  final  common  market  organization  to 
which  the transitional  organization  must  lead  as 
soon  as possible,  should  respect  the  following 
principles  which  form  an indivisible  unity  and 
should  always  be applied  simultaneously. 
— the principle  of Community  preference  involv-
ing effective  supervision  of imports  from  third 
No C 131/78 Official  Journal  of the European  Communities 12. 6. 76 
countries  — which  supply  major  quantities  of 
sheepmeat  to the  Community  — at the same 
time  bearing  in mind  the agreements  in oper-
ation  between  the EEC  and  third  countries; 
— a common  frontier  with  regard  to third  coun-
tries; 
— free  movement  of goods  within  the  Com-
munity; 
— a common  market  management  and  price 
policy; 
— the  introduction  of a policy  for modernization 
of production  structures. 
1.5. The  Committee  considers  that  any  com-
mon  market  organization  to be set  up must 
promote,  forthwith,  by the adoption  of common 
action,  the  development  of consumption  and 
production  throughout  the  Community.  The 
measures  provided  for  within  the framework  of 
the Directive  on farming  in hill  and  mountain 
areas  and  in certain  less-favoured  areas  should 
contribute  to achieving  these  objectives. 
1.6. The  Committee  insists  that  the guide  price 
(with  the necessary  seasonal  variations)  for sheep-
meat  be fixed  annually,  and  at a level  which  takes 
full account  of the various  production  costs  in all 
regions  of the  EEC.  An  appropriate  safeguard 
clause,  specifically  designed  for  sheepmeat  mar-
keting,  should  be included  as well. 
The common  market  organization  must  ensure 
that sheepmeat  producers  throughout  the  Com-
munity  receive  a remunerative  price  for  their 
production.  Consequently,  an intervention  system 
should  be introduced;  this  system  should  be 
related  to the guide  price. 
1.7. The  common  system  for trade  with  third 
countries  must  also  include  provision  for export 
refunds  and  import  levies  to be applied  under 
certain  conditions. 
2. General  observations  on the Commission  pro-
posal 
2.1. The  Committee  expresses  its disappoint-
ment  that  the proposal  presented  by the Commis-
sion only  applies  to three  Member  States,  and draws  attention  to the fact  that,  in the application 
of the  proposal  certain  distortions  of trade  may 
arise  which  could  be of some  disadvantage  to the 
trade  in sheepmeat  in other  Member  States.  The 
Committee  urges  the Commission  to give  imme-
diate  consideration  to preventing  any  such  distor-
tions  from  arising. 
2.2. The  Committee  regrets  that  during  the 
transitional  period  the two  essential  elements  of a 
Community  organization  in the sheepmeat  sector, 
namely,  a system  supervising  imports  from  third 
countries  and  a support  system  for  the  Com-
munity  market  price,  are absent  from  the Com-
mission  proposal. 
2.3. The  Committee  recognizes  the  Commis-
sion's  intention  of improving  the structure  of the 
sheepmeat  sector,  but  notes  that  no concrete 
financial  or other  guarantees  are envisaged.  The 
Committee  insists  that  such  measures  must  serve 
to stimulate  sheep  farming,  particularly  in the 
less-favoured  regions  of the Community. 
2.4. The  Committee  is concerned  that  the 
Commission  proposal  fails  to consider  the  im-
portance  of the wool  sector  of the sheep  industry. 
It has  an important  bearing  on development  of 
sheep  production  in many  areas  of the Commun-
ity where  wool  plays  an important  part  in the 
income  of the producers.  The  Committee  realizes 
that there  may  be some  difficulties  in incorporat-
ing measures  concerning  the  problems  of wool 
within  the  scope  of the  transitional  Regulation 
currently  proposed  by the Commission,  but advo-
cates  in the strongest  terms  that  the Commission 
forthwith  take  steps  to ensure  that  the problems 
of wool  producers  are adequately  catered  for in a 
regulation  to be enacted  as soon  as possible. 
2.5. The  Committee  stresses  that  the system  of 
compensatory  amounts  envisaged  by the present 
proposal  is not satisfactory  because: 
— it will  apply  in one  direction  only,  since 
according  to Article  4, paragraph  1, it may 
take the  form  of a levy  only  with  regard  to 
imports  into  France; 
— it will  be based  not  on the transitional  dom-
estic  guide  prices,  but on market  prices; 
12. 6. 76 Official  Journal  of the European  Communities No C 131/79 
— it will  cover  only  three  Community  countries, 
namely,  France,  the  United  Kingdom  and 
Ireland; 
— all in all, it is feared  that  these  factors  could 
lead to undesirable  distortions  of trade  and 
losses  of income. 
2.6. The  safeguard  clause  contained  in Article 
6 is dangerously  inadequate  for  a transitional 
market  organization,  since  it only  affords  the 
possibility  of intervention  in trade  with  non-
member  countries.  The  obligations  arising  from 
the GATT  and  any  limitations  imposed  thereby 
must  be taken  into  account. 
The Committee  thinks  that  pending  standardiza-
tion of national  import  arrangements  and  systems 
of aids  to producers,  the Commission  must  pro-
vide arrangements  to guard  against  national  mar-
kets being  disrupted  by trade  with  other  Member 
States.  Such  arrangements  are  quite  possible 
under  Article  115  of the EEC  Treaty. 
Finally,  the Committee  stresses  that  here  too the 
absence  of clear  criteria,  such  as guide  prices,  will 
make  the  operation  of the  safeguard  clause 
arbitrary  and  uncertain. 
2.7. The  Committee  points  out that  the Com-
munity  has  in the  past  adopted  transitional 
systems  for  organizing  the  market,  e.g.  the 
regulation  on  the  gradual  establishment  of a 
common  market  organization  in the beef  sector 
(Regulation  No 14/64/EEC(')),  which  could  serve 
as a basis  for a regulation  on transitional  com-
mon  organization  of the market  in the sheepmeat 
sector. 
2.8. The  Committee  urges  that  the transitional 
system  be based  on the  transitional  common 
organization  of the markets  which  the Commun-
ity has adopted  in the past  and  which,  in parallel 
with  the  liberalization  of Community  trade  and 
over an appropriate  period,  provide  for: 
— the gradual  approximation  of guide  prices  in 
the various  member  countries  of the  Com-
munity; 
— the progressive  phasing  in of the abovemen-
tioned  common  external  regime  which  should 
be part  of the  definitive  organization  of the 
market. 
0) OJ No 34,  27. 2. 1964,  p. 562/64. 2.9. In  view  of the  important  general  points 
made  above,  the  Committee  considers  that  the 
Commission's  proposal  is inadequate  to cope 
with  the problems  involved  in organizing  a single 
market  in sheepmeat. 
Nevertheless,  the Committee  would  like,  for the 
record,  to comment  on some  of the  specific 
clauses  of the proposed  regulation. 
3. Specific  observations 
Article  1 
Without  entering  into  detail,  the  Committee 
suggests  that  there  is a need  for a closer  examin-
ation  of the system  of identification  of live  sheep 
and carcasses,  in order  to improve  the application 
of the Regulation. 
Owing  to the  systems  of aid  applied  in the 
Member  States,  the fat sheep  and  fat lamb  market 
is liable  to be affected  by a fairly  substantial  trade 
in breeding  animals.  The  organization  of the 
sheepmeat  market  must  therefore  include 
arrangements  to ensure  that  the two  sectors  are 
treated  alike. 
Cf. also  what  has  been  said  in item  1.1  above 
about  wool. 
Article  2 
This  Article  should  be reworded  as follows: 
'In order  to encourage  action  furthering  the 
objectives  of Article  39 of the  Treaty,  the 
following  Community  measures  shall  be adopt-
ed: 
(a) measures  intended  to provide  better  guid-
ance  for sheep  rearing; 
(b) measures  intended  to promote  better  orga-
nization  of production,  processing  and mar-
keting; 
(c) measures  intended  to improve  quality; 
(d) measures  to permit  the  establishment  of 
short-  and  long-term  forecasts  on the basis 
of the means  of production  used; 
(e) measures  to facilitate  the recording  of mar-
ket price  trends. 
No C 131/80 Official  Journal  of the European  Communities 12. 6. 76 
The above  joint  measures  shall  constitute  com-
mon measures  within  the meaning  of Article  6 
(1) of Regulation  (EEC)  No 729/70.  The  total 
cost of these  common  measures  shall  be borne 
by the EAGGF,  and  they  shall  apply  for the 
duration  of the  transitional  period.  The  best 
current  estimate  of the  total  cost  of these 
measures  is in the region  of 80 million  units  of 
account  for the two  years  1976  and 1977. 
General  rules  concerning  these  measures  shall 
be adopted  in accordance  with  the procedure 
laid down  in Article  43 (2) of the Treaty.' 
Article  4 
The Committee  recommends  that  the Commis-
sion institute  forthwith  a system  of market 
reporting  that  will  be reliable,  consistent  and 
equitable  to all concerned. 
Article  5 
The Committee  is of the opinion  that  the phas-
ing-out  of the compensatory  amounts  as well  as 
the subsidies  for  producers  should  be done  in 
such  a way  that  the producers  concerned  suffer 
no loss  in income. 
Article  8 
The Committee  emphasizes  the necessity  to aid 
producers  in areas  affected  by control  measures applied  under  the animal  health  regulations,  and 
which  may  cause  losses  to producers  due  to a 
distortion  of normal  trading  procedures. 
Article  11 
The Committee  recommends  the setting  up of an 
advisory  Committee  drawn  from  a broad  basis  of 
interests  in the  production  and  marketing  of 
sheep  and  sheep  products  and including  represen-
tation  of consumers. 
Article  14 
The Committee  recommends  that  sufficient  finan-
cial aid be made  available  from  the EAGGF  to 
support,  where  needed,  the measures  of Article  2 
in assistance  of the sheep  sector. 
Article  16 
The Committee  stresses  the  importance  of the 
Commission  presenting  without  delay  proposals 
for the definitive  Regulation  which  must  come 
into force  on the expiry  of the transitional  period. 
Done  at Brussels,  31 March  1976. 
The Chairman 
of the Economic  and  Social  Committee 
Henri  CANONGE 
12. 6. 76 Official  Journal  of the European  Communities No C 131/81 
ANNEX 
to the opinion  of the Economic  and  Social  Committee 
The following  amendment  was  rejected  during  the discussions: 
Paragraph  2.5 
Delete  the four  indents  and  substitute: 
'(a) It is essentially  similar  in effect  to the present  system  of countervailing  charges  levied 
by France  on imports  from  new  member  countries. 
(b) It is based  on market  prices  rather  than  domestic  guide  prices. 
(c) It is discriminatory  as between  members  of the  Community  and  incompatible  with 
the development  of the common  market. 
(d) It is feared  that  these  factors  could  lead  to undesirable  distortions  of trade  and  losses 
of income.' 
Reason 
The amendment  is intended  to remove  the  implication  that  similar  compensatory  amounts 
should  be levied  by the  other  six  Community  countries.  As the  proposal  also  prohibits 
quantitative  restrictions  (which  would  embrace  quotas  and  embargoes)  in Article  7.1,  the 
Commission  proposal  might  logically  seek  to remove  the  remaining  barrier  to trade  in 
sheepmeat  (of Community  origin)  between  France  and  the new  Member  States. 
Voting 
For: 11, against:  28, abstentions:  29. 
The following  passage  in the  section  opinion  was  deleted  as the  result  of the  following 
amendment  accepted  during  the discussion: 
Article  4 
Article  4(1)  should  be amended  to read: 
'A compensatory  amount  shall  be levied  on imports  into  other  Member  States  of the 
products  listed  in Article  1 (a) originating  in Ireland  or the United  Kingdom.' 
Voting 
For: 21, against:  17, abstentions:  35.