EUROPEAN COMMISSION Brussels, 22.6.2017 COM(2017) 332 final 2017/0135(NLE) Proposal for a COUNCIL DECISION on the signing, on behalf of the European Union, of the Agreement in the form of an Exchange of Letters between the European Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union



EXPLANATORY MEMORANDUM 1.CONTEXT OF THE PROPOSAL •Reasons for and objectives of the proposal With the accession of the Republic of Croatia, the European Union enlarged its customs union. Consequently, the European Union was required under World Trade Organisation (WTO) rules (Article XXIV:6 of the GATT 1994) to enter into negotiations with WTO Members having negotiating rights related to the tariff schedule of Croatia in order to eventually agree on a compensatory adjustment. Such adjustment is due if the adoption of the EU’s external tariff regime results in an increase in tariff beyond the level for which the acceding country has bound itself at the WTO. On 15 July 2013, the Council authorised the Commission to open negotiations under Article XXIV:6 of the GATT 1994. The Commission has negotiated with the Members of the WTO holding negotiating rights with respect to the withdrawal of specific concessions in relation to the withdrawal of the schedule of the Republic of Croatia in the course of its accession to the European Union. Negotiations with New Zealand resulted in a draft Agreement in the form of an Exchange of Letters that was initialled on 18 May 2017 in Geneva (the Agreement). Consequently, the European Commission proposes to the Council to authorise the signature of the Agreement. •Consistency with existing policy provisions in the policy area The proposal is consistent with EU practice followed in previous EU enlargements. •Consistency with other Union policies The proposal follows EU practice which is consistent with the EU external action, industrial and agricultural policies. 2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY •Legal basis Article 207 of the Treaty on the Functioning of the European Union (TFEU), in conjuction with Article 218(5) of the TFEU for the signature of international agreements. •Subsidiarity (for non-exclusive competence) The proposal falls under exclusive competence of the Union, Article 3(1)(e) of the Treaty on the Functioning of the European Union. The subsidiarity principle therefore does not apply. •Proportionality New Zealand was affected by the withdrawal of Croatia's concessions. The compensatory adjustments do not exceed New Zealand's rights in this respect. The proposal complies with the proportionality treatment. •Choice of the instrument A Decision of the Council authorising the signature of the Agreement is required under Article 218(5) TFEU.

3.STAKEHOLDER CONSULTATIONS •Stakeholder consultations The Council (Trade Policy Committee) has been regularly consulted on the content and advancement of the negotiations. The European Parliament (INTA Committee) has been informed. 4.BUDGETARY IMPLICATIONS See Financial Statement. 5.OTHER ELEMENTS •Implementation plans The Commission proposes to the Council that the Agreement in the form of an Exchange of Letters with New Zealand be signed on behalf of the Union. In parallel, a separate proposal on the conclusion of this Agreement is also being submitted to the Council. The results of the Agreement are as follows: Add 1 875 tonnes to the EU tariff rate quota 'Meat of bovine animals, frozen – Edible offal of bovine animals, frozen', tariff item numbers 0202 and 0206.29.91, maintaining the present in-quota rate of 20%. The new tariff rate quota shall be 54 875 tonnes; Add 135 tonnes (carcase weight) to the allocation for New Zealand under the EU tariff rate quota 'Meat of sheep or goats, fresh, chilled or frozen', tariff item number 0204, maintaining the present in-quota rate of 0%. The new tariff rate quota allocation to New Zealand shall be 228 389 tonnes. The Commission will adopt implementing Regulations to expand and manage the relevant quotas, pursuant to Article 187(a) of the Single Common Market Organisation (CMO) Regulation (Regulation (EC) No 1308/2013). These implementation measures are being prepared in parallel to this proposal. 2017/0135 (NLE) Proposal for a COUNCIL DECISION on the signing, on behalf of the European Union, of the Agreement in the form of an Exchange of Letters between the European Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular first subparagraph of Article 207(4), in conjunction with Article 218(5) thereof, Having regard to the proposal from the European Commission,