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DOCUMENTS "COM"
COM(75)116
Vol.1975/0041

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COMMISSION OFTHESUROEBANCOMMUM7IE
COM(75)116final
Brussels,24March1975
COMMUNICATION FROMTHE
COMMISSION TOTHECOUNCIL
ontheCommunity'sandMemberStates'
participation intheUnitedNations
Conferenceconcerningnegotiation of
the5th1975TinAgreement
Recommandation fora
COUNCILDECISION
onthenegotiation oftheFifth
International TinAgreement
(submittedtotheCouncil "bytheCommission)
COM(75)116final

Conmission Communication totheCouncil
ÏNTRODUCTORY NOTE
TherenevjaloftheFourthInternational TinAgreement,whichexpireson
30June1976,istobenegotiatedunderUNCTADauspicesataconference
tobeheldinGeneva,from20Mayto20June1975*ThePreparatory ;
Committee,setupbytheInternational TinCouncil,hasdrawnupadraft
ofaFifthAgreementwhich,togetherwithalternativeproposals,willbe
submittedtotheConferenceasaworkingpaper.
.Thepurposeofthiscommunication istoindicatethebroadlinesofthe
Community'spositioninthenegotiations tobeconductedatthe
Conference.
Inviewoftheurgencyofthismatter,thisdocumentmustbestudiedand
adecisiontakenassoonaspossible,certainlybeforethebeginningof
thenegotiations (20May),byasuitableprocedurecommensuratewith
thisurgency.' ''' '

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V\
1*niltheMemberStatesarcpartiestotheFourthTinAgreementadopted
on15May1970.TheCommunity,whichsignedandapprovedtheAgreement
on27January1971an&22ITarch1972,respectively ,alsoparticipates
"buthasnovotingrights.
2*Theobjectiveofthe,International TinAgreementistostabilizethetin
marketsoasto:
1
(a)provideforadjustmentbetweensupplyanddemandandalleviateserious
difficulties arisingfromasurplusorshortageoftin;
(b)preventexcessivefluctuationsinthepriceoftin;
.(c)safeguardandhelptoincreasetheearningsoftheproducer
countries;
(d)ensureanadéquatesupplyatéquitablepricesforconsuners.
■1
3«Accordingly,theAgreementcontainsthefollowingprovisions;
(a)abufferstock,themaximumtargetofwhich,inthecaseofthe
FourthAgreement,isequivalentto20000metrictonsoftinmetal;
(b)apriceintervention systemwithfloorandceilingprices;
(c)bufferstockregulationswhichgovernoperationsbytheBufferStock
Manager(BSM)inthecontextoftherelationship betweenthemarket
pricefortinandtheintervention prices;
(d)exportcontrolmeasures;
(e)measurestobetakenintimesofshortage.
1

-3-
4.ThenewAgreement -isaimedparticularlyatstrengthening cooperation
betweenproducerandcbnsumercountriestohelpthedevelopingpro­
ducedcountriesobtaintheresourcesnecessaryforfastereconomic
growthand'Socialdevelopment ,whiletakingaccountoftheinterests
ofconsumers.Consequently ,themainissuesattheforthcoming nego-
ciationswillincludethefollowing }
-thepriceintervention system,inparticularthefixingofthefloor
'price|
-thesizeandfinancingofthebufferstock,especiallythecompulsory
financialparticipation bytheconsumercountries;
-managementofthestock,andinparticularthepossibilityarothers-
wiseofthemanagerinterveninginthemiddlesector^^j
-exportcontrolandthefixingofthestocklevelsoftintobereached
beforeacontrolperiodmaybedeclared;
-measurestobetakeninperiodsofshortageandhowtheycanbemade
moreeffective.
5*Thesemattersdirectlyaffectthevolumeandtermsoftradeintinand,
takenasawhole,constitutecommercialpolicymeasuresforthepurposes
ofArticle113oftheEECTreaty.Negotiations onthesemattersmust
thereforebeconductedinaccordancewiththeprovisionsofArticle113.
Therangebetweenthefloorandtheceilingpriceisdividedintothree
sectors.Atpresentthebufferstockmanager'may"buy"andsell'^xri""ii!i
theupperandlowersectors.Hemayonlyinterveneinthemiddiesector'
ifspeciallyauthorizedtodosobytheInternational TinCouncil,which
iscomposedofrepresentatives ofallthecontractingparties.

6.Only,iftheproblemsinquestionareproperlyexposedcantheobjectives
oftheAgreementbeachievedandtheinterestsofproducersandcon­
sumersbeguaranteed.SincetheIfemberStatesatpresentcontrol45%
ofthetotalvotesoftheconsumercountriesintheTinCouncil,the
Communitycanplay;adecisivepartinthesearchforeffectiveand
balancedsolutions.
Apartfromthe,commercialimplications oftheseproblems,attention
shouldbepaidtotheirimpactonsuppliestoindustriesoftheCommunity
-theCommunityisalmosttotallydependentonimportedtin,andits
importsrepresent35f°oftotalworldtradeinthiscommodity-andon
theeconomicgrowthofthedevelopingproducercountries.
TheCommissionworkingpaper^^presentedtotheCouncilWorkingParty
onCommodities on15January1975setoutvariousapproachestothe
problemsinquestion.
a)Prloeintervention s.ystem
TheCommissionfeelsthatthethreesectorsoftherangebetween
floorandceilingpriceshouldbebetterdistributedsothatthe
middlesectorisonceagainanareawherethepricemightfluctuate
,freely. :
b)Bufferstock
-Size.Thecurrentmaximumtargetforthebufferstockis20000metric
tonsoftinItwouldberealistictoincreasethisto20$ofthe
•volumeofworldtrade(around35000metrictons).
Experienceandmarkettrendshaveshownthatthecurrentmaximum
targetisinsufficienttofulfiltheaimsofthe--Agreement.■".
Vl85/75(C0MER30)

-5-
-Financialaspects.ThepreambletotheAgreementreferstoco­
operationbetweenproducerandconsumercountries,butatpresent,
thiscommunityofinterestsisnotreflectedintherespective
financialcontributions ofthesetwocategoriesofcountries.Apart
fromthesignificance ofthisproblemfortheCommunity'sdevelop­
mentpolicy,itisclearthattheinterestsoftheconsumercountries
wouldbebettersafeguardediftheyagreedtomakefinancialcon­
tributionstowardsthestock^^.
Thenon-participation ofconsumercountriesinthefinancingofthe
stockmaypreventthemfromparticipating initsmanagementand
indeedmightfurtherencouragetheproducerstoconcludeanagree-
mexvi;betweenthemselves .\ ■. " *
-Operation.Themainpointatissuehereiswhetherasdemandedby
theproducercountries,theB.S.M.shouldbeallowedtointervenein
(2)themiddlesector^.
•Thiswouldtransformthedefenceofthefloorandceilingpricesinto
asupportofacentralprice,introducingadegreeofrigidityinto
theoperationsthatwouldimplyfar-reaching changesinthenature
^andtheobjectivesoftheAgreement.
c)JJcportcontrol•• ; -
Theseprovisions maybytheirverynaturealsoaffectthesecurityof
suppliestotheimportingcountries'andthe'Communityinparticular.
■Byitslimitations ofstocksintheproducercountriesexportcontrol
caninvolve -afallinproductionwhichcouldhaveashort-andmedium­
....termimpactontheavailability oftinonthemarket.Itwilltherefore
;>•••'be-necessaryindefining -thecriteriaforits;applicationtomakeit
clearthatthisisameasureoflastresort.
(1)Considerationwillhavetobegiventothepossibilityofintervention
bycertaininternational financialinstitutions .
(2)Seefootnote1onpage3.

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d)Measurestotetakeninperiodsofshortage
TheCommissionagreeswiththePreparatory Committeethatthepresent
provisionsarenotsufficienttoguaranteetheconsumercountries
securityofsupplyintimeofshortage.Itthereforeconsidersthat
theexistingmeasuresshouldbestrengthened andshouldinclude
bindingprovisionssimilartothoseforexportcontrol.
Enlargementofthestocktogetherwithjointfinancingonanequal
basiswouldinanycasecreateasituationwhereshortageswouldbeun­
likelytooccur.
7.Thecurrentprovisionsontheparticipation ofintergovernmental organi­
zations,whichwerelargelydraftedbynon-Memberstates,donotadequately
covertheCommunity'sposition.
TheCommissionconsidersthatthetextshouldbeamendedinordertoclarify
thispositionandmoreadequatelysafeguardCommunityinterests,whileat
thesametimegivingallthecontractingpartiesessentiallegalsecurity.
Anewtextbasedontextsalreadyapprovedinthewheat,coffeeandcocoa
agreementshasalreadybeenpresented^\
8.ItwouldalsobeadvisableatthenextTinConferencetohaveasingle
delegationcomprisingtheMemberStatesandtheCommunity,withthe.
Commissionrepresentative puttingforwardtheCommunitypositiononmat­
tersforwhichtheCommunityisresponsible .
ThedraftCouncilDecisionannexedtothisdocumentauthorizestheCony-
missiontoparticipateinnegotiations onmattersrelatingtothecommon
commercialpolicy,particularly thoselistedintheannextothedraft,
andontheconditionsconcerningCommunity'sparticipation intheFifth
Agreement.
(1)R/185/75(COMER30)

*Recommendat ionfor
aCouncilDécision
onthenegotiation oftheFifthInternational "-'
TinAgreement
THE-COUNCILOPTHEEUROPEANCOMMUNITIES ,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
andinparticularArticle113thereof?
Havingregardtotherecommendation fromtheCommission !
WhereastheCommunitysignedtheFourthInternational TinAgreementon
27January1971andapprovediton22March1972^^andisapartytothe
Agreement;
Whereasthesaidagreementexpireson30JunQ19765
WhereastheFifthInternational TinAgreementistobenegotiatedunderthe
auspicesofUNCTADataninternational conferencetobeheldinGenevafrom
20Mayto20June19751andwhereastheCommunityshouldtakepartin
thesenegotiations ,whichwillcovermattersrelatingtoitscommoncommer­
cialpolicy,-' -
HASADOFTEDTHISDECISION?
•-.Solearticle ,-.
TheCommissionisherebyauthorized ^to'conduct,onbehalfoftheCommunity,
r•.:'t
thenegotiation of'theFifthInternational TinAgreementin-matterswithin
theCommunitycompetence -.-- -.:v...
TheCommissionshallconductthesenegotiations inaccordancewiththe
-instructions annexedheretoandinconsultation withtheSpecial "Committee
setupunderArticle113.
DoneatBrussels,
FortheCouncil
ThePrésident
(1)OJNoL90,17.4.72p.1

Annex tothe Recommendation for aCouncil Decision :Directives for the
nego tiation oftheFifth International TinAgreement
1.Intervention prices
Thedivision oftherange between thefloor price andtheceiling
price into three sectors should beachieved insuch away asto
reconstitute themiddle sector asthearea within which theprice
mayfluctuate freely .
2.Buffer stock
(a)Size
Themaximum target of .thestock should beapproximately equivalent
to20%ofworld trade (around 35000metric tons ).
(b)Financial arrangements
Theprinciple ofcompulsory joint financing ofthestock onane<jual
basis should beadopted .
(c)Opération
Arestrictive position should betaken uponthequestion ofallowing
thebuffer stock manager tointervene inthemiddle sector .
3»Export control
Amendments should beproposed tothecriteria fortheapplication
ofsuch control toensure that this isameasure oflast resort .
4.Measures tobetaken intimes ofshortage
This article should bestrengthened forthebenefit oftheconsumer
countries bytheadoption ofbinding provisions similar 'tothose for
export control ,
5.Community participation intheAgreement
(a)Article 54ofthedraft Agreement should bereplaced bythefollowing
addition toArticle 4»based onthetext oftheInternational Coffee
Agreement (1973 )s

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"AnyreferenceinthisAgreementtoaGovernment,participating country
orparticipantshallbeconstruedasincludingareferencetotheEuro­
peanEconomicCommunityortoanintergovernmental organization having
comparableresponsibilities inrespectofthenegotiation,conclusionand
application ofinternational agreements,inparticularcommodityagree­
ments.Accordingly ,referenceinthisAgreementtosignature,ortothe
depositofinstrumentsofratification ,approvaloracceptance,orofa
notification ofintentiontoratify,approveoraccept,orofaccession,
byaGovernment,participating countryorparticipantis,inthecaseof
suchorganizations ,tobeconstruedasincludingareferencetothesig­
nature,orthedepositofinstrumentsofratification ,approvaloraccep­
tance,orofanotification ofintentiontoratify,approveoraccept,or
ofaccessionbysuchanorganization .
Suchanorganizationshallnotitselfhaveanyvotes,butinthecaseofa
voteonmatterswithinitscompetence,itshallbeentitledtocastthe
voteofitsMemberStatesandshallcastthemcollectively .Insuchcases,
theMemberStatesoftheorganization inquestionshallnotbeentitled
toexercisetheirindividualvotingrights".
(b)ItwouldalsobenecessarytoinsertinArticle2(Definitions)underthe
heading"Participating country",thewords"oranorganizationreferredto
inArticle4".
1