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Vol.1976/0168

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(76)552final.
Strasbourg ,13October1976.
COMMUNICATION OPTHE,COMMISSION TOTHECOUNCIL
\ _
concerningtheparticipation oftheCommunityinPreparatory Meetingsonjute
andjuteproductsintheframeworkoftheIntegrated Programmeoncommodities
,adoptedbythe4thUNCTAD
COM(76)552final.
\

I. General Observations
1.Theintegrated programme adopted byResolution 93IVofthe
4thUNCTAD foresees among other things theholding ofpreparatory -
meetings followed byeventual negotiations onacertain number of
products among which areincluded jute and jute products * The
first preparatory meeting onthis product will "beheld inGeneva ,from
the25to29October 1976 .
2.These activities ,asmuch onthepolitical asontheeconomio level
fitinwith the efforts theCommunity hasbeen making forsome time
initssearch foramore balanced and just framework forinternational
economic relations *
3*Their objectives asfixed bytheintegrated programme areofgreat
political andeconomic significance inthat they seek toassure the
stability oftrade incommodities .............. toimprove andmaintain
thereal income ofdiverse developing countries ••••*•., toimprove
market access andsecurity ofsupply todiversify theproduction
ofdeveloping countries toimprove thecompetitiveness of
natural products inface ofcompetition from andreplacement bysynthetic
products ,toimprove themarket structures intherawmaterial and
commodity sectors whose export isofinterest tothedeveloping countries ••<
and toimprove structures for marketing distribution andtransport .
4.Therealisation ofsuch objectives effects anumber ofaspects ofthe
Community *seconomy ,andtouches itsgeneral commercial policy ,its
development policy anditspolicy regarding thesupply ofrawmaterials .
5*TheCommunity ,assuch must participate inthis ,inorder toassure
theprotection ofitsinterests . Theconstructive andrational role
that ithasplayedin such international discussions is .acknowledged byall*

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Itwill bemuch more difficult tosafeguard its interests inthe
absence ofacommon position ,ascertain recent experiences have shown .
Isolated anddivergent actions ofMember States ,
cannot have the same impact onthe trend ofthe discussions and
negotiations . They will prove ,ontheother hand ,that acommon
position does not exist and ourpartners ,industrialized aswell as
developing countries ,cannot fail todraw such conclusions within
theframework ofthecurrent discussions and equally onthemore general
level oftheir economic andpolitical relations with the Convmunity .
6.Theprovisions oftheEECTreaty provide forthis situation . Article 113»
ineffect ,foresees negotiation bytheCommunity alone ,represented bythe
Commission ,inconsultation with aCommittee composed ofrepresentatives of
theMember States ,ofagreements concerning trade policy .
The Commission recalls inthis context itsproposals contained inits
Communication No359 (76)of6July 1976 .
7.Itisfitting ,ontheother hand ,toemphasize that inthecase ofjute
alloftheMember States find themselves inthesame position ,that ofa
net importer ofthis product .
Inaddition ,theCommunity hasconcluded ,onthebasis ofArticle 113,
trade agreements with thetwoprinciple jute producing countries ,
Bangladesh andIndia .These agreements cover theperiod 1.1.76 -
31.12.79 ;both countries concerned benefit from thegeneralized
tariff preferences forfinished products . TheCommunity has
undertaken unilaterally totariff suspensions leading toanilduty
on1July 1978 ;fortheir part thetwoexporting countries have
accepted self-restraint •«tkeir exports totheCommunity ofcertain
products atagreed levels . Moreover ,these agreements
have established joint cooperation committieG
whose aim istopromote onabilateral basis cooperative activities
onquestions ofresearch ,development anddiversification ofproduction .
These activities andparticularly theorganization ofcontacts between
theEuropean industries andtheindustries oftheexporting countries
have already begun .

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II.The situation ofjute
Jute andjute products present ,incomparison toother •commodities
pp^dwis covered "bytheintegrated programme ,thefollowing specific
characteristics :
-concentration ofraw jute production intheBengal Delta :
Bangladesh produces 85ofrawjute forcommercial purposes ;
India ;
–irregulairy ofproduction duetoclimatic problems :more or
less abundant rains ,floods ;
-production ofraw jute entirely tied totheproduction ofrice ,
jute lands being thesame asrice lands .Theareas devoted each
season depend therefore onthegapthat exists between theprice
ofjute ,produoed forprofit andthat ofrice produced forconsumption ;
-ruling prices fixed bytheBangladesh authorities which have
influenced theprices asked byneighbouring countries intheframework
■oftheun-official tagreement worked outwith theFAO (the
international group onjute ,kenaf ,andrelated fibres );
–constant fall indemands forthefinished products intheprincipal
markets (theCommunity ,theUS,Japan )owing tocompetition from
substitute products :polyethylene ,rubber ,andpaper . This
phenomenon ofsubstitution hasmoreover been accelerated since 1970
inthenotably because theCommunity 'sjute industries were abruptly
deprived oftheir supply ofraw jute asaresult ofthewarbetween .
Pakistan andwhat wasthen itseastern province .
–theexistence ofbilateral agreements between theCommunity on
onepart andIndia andBangladesh ontheother ,ontrade andtrade
cooperation forjute products . 5
III .Directives
1*Taking account oftheabove ,theCommunity 'sposition can ,atthe
present preparatory stage besetoutasfollows :
(a)improvement instability ofsupply anddemand with theeventual
aidofnational stock regulators ;

(b)themaintenanceofunofficialagreementuntilanewagreement
isestablishedandpursuingtheworkoftheFAOJuteGroup
ifthepreparatorymeetingdoesnotcreateanadhoo"body;
(o)accelerationoftheestablishment of"JuteInternational".
Thisorganization whosecreationhasbeenplannedforseveral
yearsshouldgroupIndia,BangladeshandNepal.Themain
consumercountriescanalsoparticipateinit.
Itsaimistoassuretheresponsibility ofallforresearch,
development andthepromotionofjute;particularly ,the
improvementofyield,qualityofthefibre,andresearchon
finalusesandbypublicitycampaigns.
2.TheCommissionproposesthatitexpress,inthenameofthe
Community,thesefirstpositionsatthetimeofthepreparatory
meeting.
Later,aftermoreextensivestudyofdocumentTD/B/IPC/JUTE/L2
oftheUNCTADSecretariat,andinlightofprogressmadeduring
thepreparatorymeetingwhichwillpermittoconsiderthe
negotiationofaninternational agreement,theCommissionwill
puttotheCouncilthebasicproposalswhichbythenappearnecessary,
onthebasisoftheprincipleslaiddowninthepresentpaper.