Proposal for a COUNCIL DECISION establishing the position to be adopted on behalf of the Community in the International Grains Council

EXPLANATORY MEMORANDUM

1. The International Wheat Agreement 1949 was revised, renewed, updated and extended several times, resulting in the conclusion of the International Wheat Agreement 1986.

The International Wheat Agreement 1986, comprising the Wheat Trade Convention 1986, and the Food Aid Convention 1986, as extended, expired on 30 June 1995.

2. The signatories to these Agreements agreed that the International Wheat Agreement 1986, should be updated and entitled the International Grains Agreement 1995 and that it should comprise two distinct legal instruments:

A. the Grains Trade Convention 1995, and

B. the Food Aid Convention 1999.

Both Conventions, initially due to expire on 30 June 1998, were extended for a year (to 30 June 1999) in order to provide sufficient time for the re-negotiation of the Food Aid Convention.

A. The Grains Trade Convention 1995

The Grains Trade Convention was substantially modified in 1995. Therefore there are no changes foreseen in the future Convention. According to Article 33(2) of the Grains Trade Convention, the IGC Council may, by special vote, extend this convention beyond 30 June 1998 for successive periods not exceeding two years on each occasion.

On the basis of a Council Decision of January 1998 the Commission was authorised to vote on behalf of the European Community in favour of the extension of this Convention for the period from 1 July 1998 to 30 June 1999.

The Commission is requesting the Council for authorisation to vote in favour of the extension of this Convention for the period from 1 July 1999 to 30 June 2001.

B. The Food Aid Convention 1999

(1) Members of the Food Aid Committee decided to open the Food Aid Convention 1995 for re-negotiation, thus following up on the recommendations that the WTO Ministers adopted at the Singapore Conference in respect of the Marrakech decision on measures concerning Least-developed and Net Food-Importing Developing Countries.

(2) The Commission was authorised by the Council Decision of January 1998 to negotiate a successor agreement to the Food Aid Convention 1995 on the basis of guidelines for negotiations established by the Council.

(3) The text of the Food Aid Convention 1999, was finalised at a meeting of the FAC Working Group on 24 March 1999, at which the Community participated.

(4) The Agreement will be open for signature by governments wishing to become members of the Food Aid Convention from 1 May to 30 June 1999 inclusive, at the headquarters of the United Nations in New York.

(5) The objectives of the FAC 1999 are "to contribute to world food security and to improve the ability of the international community to respond to emergency food situations and other food needs of developing countries".

(6) The new Agreement differs from the previous Agreement mainly in the following ways:

- - the list of eligible products which may be supplied has been broadened significantly beyond cereals,

- - the provisions for covering transportation and other operational costs associated with food aid transactions have been reinforced, especially when food aid is available directly to the Least Developed Countries and in emergencies,

- - FAC donors may now express their commitments in tonnage, or in value, or in a combination of tonnage and value,

- - priority to the Least Developed Countries and Low-Income Countries has to be given by FAC members when allocating their Food Aid,

- - the new FAC contains stronger provisions for promoting local agricultural development, including possible "Triangular transactions" and "local purchases",

- - all FAC food aid to Least Developed Country recipients covered by members' commitments will be in the form of grants. Overall, food aid provided in the form of grants under this convention will represent not less than 80 per cent of a member's contributions and, to the extent possible, members will seek progressively to exceed this percentage,

- - in determining whether, and to what extent, the food aid provision on long-term confessional credit terms should continue to be covered under any Food Aid Convention, FAC members will take account of the results of the relevant multilateral negotiations with a bearing on food aid,

- - all FAC members agreed that the provisions of the new Convention should neither prejudice nor constrain future negotiations, including those in the framework of the WTO, on the status of food aid provisions on concessional credit terms. The EU and some other members re-affirmed their opinion that food aid provided under credit terms should no longer be included in the list of food aid operations,

- - the new FAC will seek to improve the effectiveness and the impact of food aid transactions, inter alia, in terms of the assessment of food aid needs, the monitoring of the aid provided, and co-operation between food aid donors, recipients and others concerned. In addition, the provision of food aid under the FAC will not be tied in any way to the commercial exports of goods or services to recipient countries,

- - during the negotiations, dialogue was maintained with food aid recipient countries. Efforts to broaden the list of FAC donors were also made and will continue.

3. The new Food Aid Convention, will be open for signature by governments wishing to become members of the Agreement at the headquarters of the United Nations in New York from 1 May to 30 June 1999 inclusive.

During that period, the governments signing the Agreements shall also deposit their instruments of ratification, acceptance or approval at the headquarters of the United Nations in New York. Signatories may, however, be granted an extension of the time limit. They may also deposit a declaration of provisional application to ensure application of the Agreement on 1 July 1999.

4. A governmental conference will take place as soon as possible after 30 June 1999 to determine whether the conditions necessary for the entry into force of the Agreement on 1 July 1999 have been fulfilled. For the Food Aid Convention to enter into force automatically on that date, governments holding at least 75% of the votes must have deposited an instrument of ratification, acceptance, approval, accession or provisional application before 30 June 1999.

5. Since it is not possible to complete the Community procedures for approval of the Convention within the given time frame, the Community should sign the Convention and avail itself of the opportunity of depositing a declaration of provisional application. The European Parliament shall be immediately and fully informed.

6. The Member States are also requested to become signatories to the Food Aid Convention with regard to the food aid measures provided for, although the simultaneous accession of the Community and the Member States is not obligatory.

Proposal for a COUNCIL DECISION establishing the position to be adopted on behalf of the Community in the International Grains Council 99/0129 (ACC)

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),

Having regard to the proposal from the Commission,

Whereas the Grains Trade Convention 1995, which was approved by the Community by Council Decision 96/88/EC of 19 December 1995 on the signing and conclusion of the International Grains Trade Convention 1995 Agreement [1], remains in force until 30 June 1999 unless it is extended beyond that date by decision of the International Grains Council for a period of no more than two years; whereas extension of the Agreement is in the interest of the Community; whereas the Commission which represents the Community in the International Grains Council should therefore be authorised to vote in favour of such extension,

[1] OJ L 21, 27.1.1996, p. 47.

HAS DECIDED AS FOLLOWS:

Sole Article

1. The European Community is hereby in favour of the extension of the Grains Trade Convention 1995 for a further two-year period.

2. The Commission is hereby authorised to express this position within the International Grains Council.

Done at Brussels,

For the Council

The President