ARCHIVESHISTORIQUES
DELACOMMISSION
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DOCUMENTS "COM"
COM(79)521
Vol.1979/0179

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COMMISSION
OFTHE
EUROPEANCOMMUNITIES
GeneralSecretariatCOM(79)521 final
Brussels,3October1979
FOROFFICIAL USEONLY
ACCESSION NEGOTIATIONS WITHSPAIN
EuropeanCoalandSteelCommunity
(Commission Communication totheCouncil)

UPIfiODUCTIOH
WhenintroducingtheCommission CommunicationsonTaxationandtheCustoms
UnionforIndustrialProduots(l),atthemeetingoftheCommitteeofPermanent
Representatives on12July1979»Vice-President^KATALIinfomnedtheCommittee
oftheCommission *sintentiontosubmitafurtherseriesofCommunications
andWorkingPaperstotheCouncilduringtheremainingmonthsof1979covering
anumberoffieldsintheaccessionnegotiations withSpain*
ThisCommunication constitutesthefirstdocumentinthisseriesandconcerns,
theaccessionofSpaintotheEuropeanCoalandSteelCommunity.
I
TheCommunication isintwoparts:
-thefirstcontainsadescription oftheproblems
-thesecondgivestheCommission *sorientations regardingtheposition
tobetakenwithSpuntoenableacommonidentification oftheproblems
toberesolvedinthecourseofthenegotiations.
(1documentsCOM(79)392finaland393final

PARTI
PROBLEMSASSOCIATED WITHSPAIN'SACCESSION TOTHEECSC
Chapter1:Introduction
1.Thispaperisintendedtoindicatetheproblemswhichwillariseasa
resultofSpain'saccessiontotheEuropeanCoalandSteelCommunityboth
fortheCommunityandforSpain.Afterbrieflyexaminingtheframeworkof
relationsbetweenSpainandtheCommunityandthesituationoftheseotors
concernedinSpain,aswellastheirrelationship withsectorsintheCommunity,
thedooumentdealsinPartII,withallthedetailedaspeotsofSpain'saccession
totheCommunitywhichwillhavetobecoveredinthenegotiations.
2.InitsOpiniononSpain'sapplicationforaccession(l),theCommission
underlinedtheimportanceofthesteelsectorinSpainandoftheneedto
ensurethatitsfuturedevelopment -shouldbecoherentwiththatofthesector
intheCommunity.
3.Spainhasnopreferentialrelationship withtheECSCasithaswith
theEEC.
WhiletheSpanishexternaltariffforECSCproduotsismorethantwice
ashighastheECSCharmonisedexternaltariff(asimilarrelationshipto
thatforEECproducts),thefurtherdisequilibrium resultingfromthe19?0
AgreementdoesnotaffectECSCproducts.
4.Theproblemofharmonisation ofconditionsofcompetition ,particularly in
thefiscalfield,hasalreadybeencoveredinsomedetailintheCommission's
Communications ontheCustomsUnionforIndustrialProducts(l)andTaxation(3).
Thesameconsiderations applyintheECSCfield.
(l)COM(78)630finalof29.11.1978.
(a)Doc.C0M(79)393final.
(3)Doc.C0M(79)392final.

5»TheothermajorproblemmentionedbytheCommissioninitsOpinion
wastheneedtoensurecoherenceinthedevelopmentofthesectorinSpain
withthatoftheCommunity.Initialcontaotshave"beenmadeintheoontext
ofindustrialpolicyandenergypolicyco-ordination betweentheCommission's
staffandtheSpanishauthorities.Thesehaveallowedacomprehensive exchange
ofinformation.Itisimportantthattheseshouldbepursuedintoasecond
phasesothatinitiatives bythetwoparties,particularly inthefields
ofrestructuring anddevelopmentofthesectors,canbemadeinthecontext
ofaCommunityof*12.
6.SincenospecifiomentionoftheECSCchapterwasmadebyMr.CALT©SOTELO
duringhisdeclarationattheopeningoftheSpanishaccessionnegotiations
on5February19791itappearsthatacceptanceofthe"acquiscommunautaire ",
thebasisoftheaccessionnegotiations ,shouldposenoinsuperabledifficulties
forSpain.

y \
•3^
<:CHAPTER2:SITUATION OP1HESPANISHGOALANDSTEELSECTORS;
_A.SOLIDF0EL....
7*Spain'ssolidfuelresourcesrangefromanthracitethroughhardcoalto
lignite.
Thefollowingestimatesofworkablereservesinmilliontonnesaregiven
in"InventarioderecursosdecarbondeEspana"(MinisteriodeIndustria
yEnergia,'February1979)!
1) 2)Total .Saleable'Years''
Anthraciteandhardcoal2297 1601 58-104
Blacklignite 1026 92392-163
Brownlignite 405 405'32
Theprincipalareaofanthraciteandhardcoalproductionforboththermal
andcokingpurposesistothesouthofOviedoinNorthernSpainywhile
ligniteisproducedmainlyintheregionofTerueltotheeastofMadridt
inthefoothillsofthePyreneestothenorthofBarcelonaandnear
LaCorunainthenorth-westofSpain. ,
8.In1977,totalsolidfuelproductionamountedto17*7nit,ofwhich11.9rat
wasanthraciteandhardcoaland5*8ratlignite.Furthermoret4*3ratof
predominantly cokingcoaland0.3mtofcokewereimported,theformer
almostentirelyfromthirdcountries,mainlytheUS,PolandandAustralia,
whilecokeimportswerepredominantly fromtheCommunity.Exportswere
negligeable^.
Coalproductionisinthehandsofalargenumberofenterprises,manyofthem
verysmall.Themostimportantistheheavilysubsidizedstatecompany
HUNOSA,.producingabout4nitofhardcoalintheregionofOviedo.
Mechanization ofundergroundproductionismuchlessadvancedthaninthe
Communityandgeologicalconditionsseverelylimititsexpansion.Asa
result,averageundergroundproductivityisverylowandunderground
éproductioncostsaregenerallyhigh.
1)Inventario6.2.3*
2)AtproductionlevelsprojectedinInventario7»9«
3)Sourceforparagraph:UNCoalStatisticsforEuropeXXVIINo.4

-4-
9»Outoftotal consumption ofsolid fuel3 ofaround 22mtin1977 ,14mtof
mostly lowcalorie ,high ashcoal andlignite -about 80%ofindigenous
production ,with imports playing aninsignificant part -were used for
electricity generation .Coke production absorbed 6mt-about two-thirds
imported .Oftheremainder ,,around two-thirds were used ingeneral industry
andone-third fordomestic heating ^.
Plans forthefuture ofSpanish solid fuels centre around their expanded
useforelectricity generation .Itisproposed toextend installed capacity
intended touseindigenous solid fuels from 4055MWin1977 to6*{66MW
in1937 through adding 67BMWofanthracite andhard coal-fired capacity
and -2032KWtobelignite-fired .Tofuel thenewinstallations ,solid fuel
production istobedoubled ,mainly through expansion ofopen cast lignite
2)mining There isnodetailed information onsome 2.000 MWofnewcapacity
under consideration forcompletion "by1987 intended toburn imported coal .
10.Thegovernment fixes theprice -andsubsidizes theuseofindigenous solid
fuels forelectricity generation bycpnpensating generating undertakings
forprice differences between oilandcoal and ,incertain circumstances ,
bypaying thecost oftransport andofholding stocks .Coal prices for
other uses arefree ,thegovernment providing large subsidies forthestate
company HUNOpA which accounts forS5/cofSpain 'scoking coal production .
1)Source forparagraph :UNCoal Statistics forEurope ,XXVII No.4
2)Source forparagraph tothis point :Inventario Table 15

-5-
B.STEELINDUSTRY
11.Spain,withacurrentannualproductionofcrudesteelinthe
range11-12milliontonnes,ranksasthefifteenthlargestproducerin
theworld.Theabovequantityrepresents8-9%ofthecurrentCommunity
productionlevelandplacesSpainmarginallybehindBelgiumthefifth
largestproduceroftheCommunity.
Spainisalsooneofourlargestexternalsuppliersofsteelbeing
responsible in1978forca13%ofourtotalimportofECSCproductsin1978.
Thusitisimportantthattheintegration oftheSpanishsteel
industryintotheCommunityshouldbeaccomplished assmoothlyaspossible.
PhysicalStructureoftheSpanishSteelIndustry
12.Therearesome90crudesteelproducersincludingindependent
foundriesinSpain.Totalemploymentinthesteelindustryisoftheorder
of90000(thiscoversbothECSCandnon-ECSCproducts).Thefollowing
tableshowsanapproximate breakdownbycapacityoftheaboveworks:
Capacity Numberofworks
over1milliontonnes 3
200000-500000tonnes 6
100000-200000tonnes 13
50000-100000tonnes 13
25000-50000tonnes 2
-25000tonnes 55
Therearethreeintegratedworks,onebeingmedium/large-sized
(ca6milliontonsofcapacity)andtheothertwosmall(combinedcapa­
cityofca2.5milliontonnes),withatotalof45000employees.There
are18worksinvolvedintheproductionofspecialsteelswithacapacity
of2.2milliontonnesandacurrentproductionofca1.4milliontonnesin
crude.steelequivalent.Employmentinthissectoris21500.
13.TheindustryisprimarilylocatedalongtheNorthernAtlanticcoast,
thisregionaccountingforover80%oftheproduction.TwosmalI"pockets
accountingeachforca5%oftheproductionarelocatedintheregionof
BarcelonaandSaguntoontheMediterranean coast.Theremainderisspread
throughoutSpain.

-6-
14.Theequipmentoftheindustryisingeneralmodern,havingbeen
installedtoalargeextentduringthelasttenyears.Butsomeserious
plantimbalancesexisti.e.lackofprimaryrollingcapacityforflat
products.Theaverageageoftheinstallations isreputedtobebelow
theEuropeanaverage.Oxygenconvertorsaccountforsome50-55%ofthe
currentsteel*productionwithelectricfurnacesaccountingfor40-45%.
AsmallnumberofOpenHearthfurnacesarestillinoperationcovering
ca5%oftheproduction.IntheCommunitythisapproximates closelyto
theItalianpatternofproduction.AsintheCommunityapproximately 297.
oftheoutputiscontinuously cast.
Inrecentyearsproductionoflongproductsconsistinglargelyof
heavysectionsandrebarshasaccountedfor50-55%ofthetotal.Almost
80%oftheheavysectionsaredestinedforexport.
FinancialStructure
15.Twooftheintegratedplantsarestateowned-ENSIDESAandALTOS
H0RN0SDELMEDITERRANEO (nationalized inFebruary1979)andtheotherALTOS
H0RN0SDEVIZCAYAmaybenationalised . Ishasbeenproposed
thatastatecreditof4.5millionpesetaswillsoonbeconvertedintoAHV
Capital.
Thelargestsingleshareholderispresently USsteelwith27%.
Thesethreecompaniesaccountforalmost60%oftotalcrudesteelproduction.
TherestoftheindustrywiththeexceptionofAstillerosEspanoles,
aspecialsteelproducer,areprivatelyowned.
Since1974thefinancialsituationoftheindustryhasdeteriorated
significantly .Totalindebtedness hasincreasedinthelastthreeyearsby
over200billionpesetasandiscurrentlyestimatedtorepresent2/3of
totalassets.
CurrentProductionCapacity
16.ThecrudesteelproductionpotentialoftheSpanishindustryin1978
,wasoftheorderof15.4milliontonnesofwhich8.8milliontonnesarein
theintegratedmills.Some2.2milliontonnesoftheresidualaredevoted
tospecialsteelproduction. •
Therecentlypublishedlong-termplanindicatesthateffective
availablecapacityin1978wasonly13.9milliontonnesofwhich7.6million •
tonnesaretobefoundinintegratedworksand2.0milliontonnesinthe
specialsteelmiIIs.

17.In1978Spanishcrudesteelproductionamountedto11.35million
tonnesgivinganoverallcapacityutilisationrateof74%incomparison
withanutilisationfactorintheCommunityof66-67%.Theutilisation
rateinthespecialsteelmillswasconsiderably lowerat63%.
Steelproductionhas,unlikethesituationintheCommunityre­
mainedatmoreorlessthesamelevelas1974.Thiswasachievedin1975
and1976throughanextensivestockbuiIdingprogrammeinanticipation of
ashortrecessionbytheSpanishworkswhilstin1977and1978thisexcess
steelwasdivertedtowardsexports.In1978almost50%oftheproduction
wasexported.-Thesituationin1977/78hasbeenaggravated byfinancial
necessitytoreducethestocksbuiltupin1975/76andbytheserious
deterioration in1978indomesticdemand.
FutureDevelopments
18.Thenewlong-termplanupto1985publishedbytheMinistryof
IndustryandEnergyinthespringof1979foreseesaconsumption inthe
regionof14-15milliontonnesofcrudesteelequivalentinthehorizon
year.Thisrepresents anincreaseoftheorderof6milliontonnesover
currentlevels.Withnetexportsremainingatthesamelevelas1978the
increaseofeffectiveproductioncapacityfrom13.9milliontonnesto18.6
milliontonnesisapparentlydesignatedtocoverinternaldemand.
Themainelementsoftheplanare
-thereplacement oftheexistingSiemens-Martin capacitybyOxygen
furnaces.ThusthenetincreaseinOxygenandelectricfurnacecapacity
willbeoftheorderof2milliontonnesforeachprocess.
-themodernization ofrollingcapacityincludingtheinstallation
ofanewwidestripmillofca2milliontonnescapacity.
-arapidincreaseincontinuouscastingcapacitytoalevelof
10.6milliontonnes,i.e.57%oftotalcrudesteelcapacity.
19.Intermsoffinishedproductsthemajorincreaseinproduction
capacity ^isplannedinlongproducts-from6.7milliontonnesto8.5
million-tonnes.Ofthisincreasesome.1milliontonnesareplannedin
productioncapacityforwirerod-aproductwhereaconsiderable excess
ofnewmoderncapacityalreadyexistsintheCommunity.Therestofthe
increaseislargelyinrebarcapacity.Productioncapacityforflat
finishedproductswillinfactdecline^duetotheclosureofpLatemill
capacity.

-8-
20.Theroleofthenewwidestripmillisthreefold :
-toeliminatethenecessitytoexportslabsforrollinginto
coils(inrecentmonthsCommunityworkshaverolledapprox.400000
tonnesofSpanishslabs),
-toeliminatetheimportofcoilscurrentlyrunningatca
300000tonnesperannum,
-tocontributetocoveringtheprojectedincreaseininternal
demandthroughto1985ofca2.5milliontonnes.
SincetheCommunityhasalreadyandwillhaveinthefuturea
considerable -ex'cessofcapacityinthisproductareaitseemsnecessary
tofindareasofcooperation infuturedevelopments inrespectofcoil
production.
Specialsteelcapacitywillincreaseby0.6milliontonnesof
crudesteelequivalentduringtheperiodupto1985.
Ifthisprogrammeisachieveditwillleadtoaconsiderable scrap
deficitoftheorderof4.5milliontonnes.Scrapimportsin1979areal­
readyontheincreasewithagrowthof27%intheproductionofelectric
steelinthefirstmonthsoftheyear.In1979arecordimportcanbe
anticipated ofca3milliontonnes.Upto1977withastableoverallpro­
ductiontheclosuresofSiemens-Martin furnacesmorethancompensated
forthemodestgrowthinuseofelectricfurnacesandthusthescrapdeficit
wascontainedatca2milliontonnesperannum.Sincetheformerprogramme
willbeterminatedinnext1-2yearsthescrapdeficitcanbeexpectedto
growwiththeincreasingpartofelectricsteelintheSpanishproduction.
TheCommunityiscurrentlythelargestsingleexternalsupplierofscrap
toSpainwithcurrentimportsrunningattheannualrateof1.5million
tonnes.TheSpanishplanswillaggravatetheproblemswhichalreadyexist
inrespectofqualityscrap.
TheSpanishassumptions ondomesticscraparisingsin1985would
alsoseemtoberatheroptimistic.Currentlevelsorarisingsareca5
milliontonnes.Itwouldseemsomewhathopefultoexpectthistoincrease
to9-10milliontonnessinceinparticulargrowthinthesteelindustry's
ownarisingswiththeincreasedproductionwillberestrainedbytheconsi­
derableincreaseincontinuouscasting. ^
Plansexistfortheconstruction ofca%3milliontonnesofpre­
reductioncapacity.Thiscouldbeanotherareaofnecessarycooperation
betweentheCommunityandSpain.

22.'ThemajorproblemoftheSpanishsteelindustryinrespectof
thelong-termplanisfinance.Investmentinrecentyearshasaveraged
27billionpesetas,whereasthenewplanrequiresalmost34billion
1979pesetasperyearwithaboveaverageoutgoingsin1981and1982.
ExternalTrade
23.Uptoyear1976theexternaltradeoftheSpanishsteelindustry
remainedmoreorlessinoverallbalance?insomeyearstherewasasmall
surplusandir\othersasmalldeficitwhichintotalmoreorlesscancelled
oneanotherout.In1977and1978Spainbecameanetexporterofsteel
withsurplusesof2.1and4.5milliontonnesincrudesteelequivalent.
In1978exportsreached5.45milliontonnes(ECSC+nonECSCproducts)or
4.'8%oftotalproduction.TheCommunityreceived23%ofthisquantity
directlyandapartofthe10%exportedtootherWesternEuropeandesti­
nations.Afurther15%ofthetotalwasexportedtotheUSA,10%toIran
and9%toEasternEurope.Othermajordestinations wereP.R.Chinaand
Algeria.
Exportshavefallenmarginallyin1979-.
Importsin1978felltoarecordlowlevelfortheseventiesof
1.01milliontonnesandhavefurtherdeclinedin1979.Inrecentyears
theCommunityhasaccountedfor65-70%ofthetotal.Thisshareofthe
totalimporthasincreasedto83%in1979.

-10-
PARTII
ORIENTATIONS
CHAPTER 1:•GENERALCONSIDERATIONS
1.Intheframeworkoftheaccessionnegotiations withSpainpapers
havealreadybeenpresentedregardingtheCustomsUnionforindustrial
productsandtaxation.Theformerpaperspecifically excludedproducts
comingundertheE.C.S.C.Treaty.Thispapercoversallaspectsof
SpanishaccessiontotheEuropeanCoalandSteelCommunity :totheextent
thatthesoareapplicable andrelevant,itadoptsorientations similarto
thosechosenintheprevioustwofields.
2- Thestartingpointofintegrationwillbethesituation which
existsatthe'dateofaccession.UnlikethecaseofE.E.C.products,no
specialprovisions coverrelationsbetweentheCommunity andSpainfor
E.C.S.C.products,andathirdcountryrelationship isappliedonboth
sides.However,Spainalreadyapplies,onanautonomousbasis,certain
oftheE.C.S.C.pricingrules.
3. AswasrecalledintheCommunity'sdeclaration attheopening
ofaccessionnegotiations on5February1979,thesenegotiations arebased
ontheprincipleoftheacceptance bySpainofthe"acquiscommunautai re".
Spain'sapplication ofthis"acquis"shouldoccurfromthemomentof
accessionunlesstransitional measuresortemporaryderogations arefound
tobenecessaryfcraharmoniousintegration .Thedetailsofsuchmeasures
orderogations shouldbefixedintheAccessionTreaty.Theobjectiveof
thejointexamination ofthischapteristoseetowhatextenteitherparty
requiressuchprovisions inordertofacilitate Spain'saccessiontothe
EuropeanCoalandSteelCommunity.
A. TheCommission considersthat,theintegralapplication ofcertain
provisionswillrequiretransitional measures.Detailsaregivenin
Chapters 2(paragraphs 11and12),3,8and9.Notransitional measures
seemnecessaryforotherprovisions .
InadditiontheCommission considersthat,inordertopermit
harmoniousintegration andtoovercomeunforeseendifficulties ,measures
permitting theorderlyintroduction offreemovementsofgoodsandin
particular areciprocal safeguardclauseshouldbeincludedofaduration
sufficient tocovertheperiodofapplication oftransitional measuresor
temporaryderogations invarousdomains.Itsdurationshouldthusnotbe
limitedsimplytotheperiodoftariffdismantlement orsimilartransitional
mechanisms .Thesafeguardclausewouldpermitthetwopartiestoovercome
specificdifficulties bytheapplication,underthecontrolofthe
Commission,oftarifforquantitative derogations .
L

-11-
5.Sincetheaccessionnegotiations constitute awhole,any
agreementwhichmaybereachedonspecificchaptersduringthecourseof
thenegotiations canonlybeconsideredasfinalonceoverallagreement
hasbeenreached.
TheCommission wouldfurthermore underlinethefactthatany
positiontakenregardingthedurationoftransitional measuresinthis
chapterofthenegotiations shouldnotprejudicetheCommunity'sposition
regardingthedurationoftransitional measuresinotherchapters.
6.'.Itisvital,whenconsideringthespecificchapteroftheE.C.S.C.,
totakeaccount'oftheeconomiclinkwhichexistsbetweendifferentareas
ofCommunitylaw.
Fbrthisreason,andwithoutprejudicetothenegotiation,the
CommissiontakesforgrantedthatthefiscalprovisionsofCommunityLaw
willapplyfromthemomentofaccession,andinparticulartheentire
rangeofCommunityregulations regardingV.A.T.(1).
?•*Furthermore-althoughthisdoesnot'formadirectpartofthe
accessionnegotiations-theCommissionconsidersthatintheperiod
leadingu|jtoSpain'saccessionexchangesofviewsonsteelandenergy .
policiesshouldbeencouragedwithaviewtotakingsuitableautonomous
measureswhereverpossible.
Thev.Commissionshouldundertaketheseexchangesofviewswith
theSpanishauthorities .
Asregardsinparticulartheproblemsofthesteelsector,theCommission
will,intheframeworkoftheexistingbilateralarrangement,undertakeexchanges
ofviewsconcerningtheprogressiveinsertionofthe-Spanishauthoritiesinto
theCommunity'srestructuring processinthesteelsector.
-"withwhirls6trf?s^lonaLregimewhichwillapplybetweenSpainandGreecewithwhichnegotiationswerecompletedwiththesignatureoftheAccession
accessionJT28Hay1979'andPortU9al'candidateforaccessiontotheCommunity,willbedealtwithlaterinthecourseofnegotiations .
nfprsr?r0mrk'USh0uldbe^calledthatthestructureItTreatydiffersfromthatoftheEECTreaty.LinksarecreatednrirH?•f-1.theenterPrises>particularlyinsuchfieldsas
tothe9Comrlunit1nvolvetheenterprisesthemselvesindirectobligations
<1)Cf.ComissionCommunication N°C0M(79)392onfiscalquestions

-12-
CHAPTER2:FREECIRCULATION OFGOODSBETWEENSPAINANDTHECOMMUNITY
10.TheaccessionofSpaintotheEuropeanCoalandSteelCommunity
impliestheelimination ofalltariffandnon-tariffbarrierstotrade
betweenSpainandtheCommunity
"(Article4(a)oftheE.C.S.C.Treaty).~
IntheCommission'sview,aprogressiv/etransitional mechanism
(a"timetable")shouldonlybeappliedtothreeoperations :theelimination
ofimportduties,theeliminationofquantitativerestrictions onexports
betweenSpainandtheothermemberstatesandtheadoptionbySpainof
theE.C.S.C.harmonisedCustomstariff.Allotheraspectsdonotappear
torequirethesetting-upoftransitional mechanisms.
11.Intheframeworkoftheaccession,allcustomsdutieson
importswillhavetobeabolished.TheCommissionconsidersthatit
wouldbeunrealistictoenvisagethetotalabolition,onbothsides,
ofallsuchdutiesonaccessionparticularly inviewofthefactsthat
notariffdisarmamenthassofarbeenundertakenintheESCSCsector.
Itwillthereforebenecessarytodrawupatimetablefortheprogressive
reductionofsuchduties,inannualinstalments,sothattheywillbe
phasedoutbytheendoftheperiod(whilenotrulingoutanacceleration
ofthisprocess).
TheCommissionconsidersthatthebestapproachwouldbetofixa
timetableofthesamelengthasforindustrialproductsfallingunderthe
EECTreatywhichwouldensure,,byphasingoutcustomsdutiesbysymmetrical
annualinstalments,arapidandreciprocalopeningofmarkets.Without
creatingtooseriousproblemsforthesectorsinquestiononeitherside,
thisapproachwouldavoidthepossibility oftradedeflectionwhichmight
ariseifthetimetablesfortariffdisarmament weredifferentforEECand
ECSCproducts,sinceveryrealpossibilities forsubstitution existbetween
productsfallingunderthetwoTreaties.
12.Intheframeworkoftheaccessionallquantitative restrictions
onexportswillhavetobeabolished.TheCommunityatpresentapplies
restrictions totheexportofironandsteelscrap(1).Themodalitiesfor
theabolitionoftheserestrictions withregardtoSpainwillrequire
furtherstudy.
Spainshouldindicatewhetherithasanysimilarrestrictions
whichcouldnotbeabolishedfromaccession.
(1)DecisionbytheRepresentatives oftheMemberStatesmeetinginthe
Council,of6March1953.

-13-
13.Theelimination ofotherobstaclestofreecirculation mentioned
inArticle4(a)oftheE.C.S.C.Treatyshould,intheCommission'sview,
takeplaceatthemomentofaccession,sincenoproblemsappeartobe
posedbythese.Theyare:
(a)elimination ofchargesequivalenttoimportduties:
theCommunitydoesnotapplytheseand,giventheir
natureandlowlevelprogressiveelimination bySpain
appearsunnecessary .
(b)customsdutiesonexportandtaxesofequivalenteffect:
theCommunitydoesnotapplycustomsdutiesonexport.
,TheydonotappeartoexistontheSpanishside.However,
shouldanysuchdutiesbeinstitutedbeforeaccession,
itseemsappropriatetoindicatethattheseshouldbe
abolishedimmediately uponaccession.
(c)quantitative restrictions onimportsandmeasuresofequivalent
effect :
theCommunityappliesnosuchrestrictions onimports
andSpainonlyalimitednumber.Theirelimination should
posenospecificproblems.
(d)measuresofequivalenteffecttoexportrestrictions :
thebanningofsuchmeasuresfromthemomentofaccession
wouldnotappeartoposeanyproblem.

-14-
CHAPTER3:ALIGNMENT ONTHEECSCHARMONISED TARIFF
14.Inthecontextofaccession,Spainwillhavetotakeover
theECSCharmonisedtariff.InviewofthegapbetweentheLevelof
dutiesinthistariff(average5.6%)andtheSpanishtariff(average
13.5%),transitional measureswillhavetobeprovidedfor,asinthe
caseofabolitionofcustomsdutiesbetweentheCommunityandSpain.
Assumingthistobethecase,theCommissionconsidersthat:
-forreasonsofadministrative simplicity,Spanishcustomsduties ,which
donotdivergefromcorresponding dutiesintheECSCharmonisedtariffby
morethan15%shouldbefullyalignedimmediately uponaccession;
-inthecaseofothercustomsduties,thegapbetweentheSpanishduty
andthecorresponding ECSCdutiescouldbereducedbyannualinstalments,
withoutrulingoutthepossibility ofadvanceimplementation ofthe
ECSCharmonisedtariffbySpain.
Furthermore,itisunderstoodthatSpainmustatnotimeaccord
theMemberStateslessfavourabletreatmentthanitgivesnon-member
countriesenjoyingmost-favoured-nationstatus.
Therateofalignment'oftheSpanishcustomstarifftotheECSC
harmonisedtariffwillhavetobecoordinated withthatadoptedforthe
abolitionofcustomsdutiesbetweentheCommunityandSpaininorderto
avoidanydeflectionoftradeintheeventofdiscrepancy betweenthe
twotimetables .
15.Wheretotalorpartialsuspensionsofcustomsdutiesareapplied
bySpain,theyshouldeitherbeabolisheduponaccessionormodifiedso
thattheycanbeprogressively alignedontotheECSCharmonisedtariffat
aratetobefixedinthecourseofthenegotiations .
Spanishtariffquotaswillhavetobeabolishedimmediately upon
accession .

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Theapplication bySpainofCommunitytariffsuspensions
shouldtakeplaceeitherimmediately uponaccessionorprogressively
inparallelwithSpain'simplementation oftheECSCharmonisedtariff.
Inthiscontext.onlytwoCommunitytariffsuspensionsapplicableby
allMemberStatesexistatpresent:productsintendedforcertaintypes
ofship(construction,repairs,maintenance,etc.)-TitleIIAofthe
preliminaryprovisionsoftheCCT-andspongeironandsteel(73.05of
theCCT).
Itshouldalsobenotedthatdutyfreetariffquotasareapplied
onsomeproductsbycertainMemberStates.Thesequotasarefixedevery
sixmonthsbyunanimousagreementofMemberStatesrepresentatives meeting
withintheCouncil.,Inorderforthesemeasurestobeapplicable,the
CommissionmustauthoriseMemberStatestoderogatefromHighAuthority
Recommendation 1/64(modifiedbyDecision663/68)establishing minimum
duties.

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CHAPTER4:BASICDUTIESANDADMINISTRATIVE COOPERATION
16.'Basicduties'willhavetobefixedforoperationsoftariff
reductionandalignment.AsforEECproducts,theseshouldbethe
"dutieseffectivelyapplied"atadatetobedecidedwhich,forpractical
reasons,shouldbethesameasthatdecidedonforEECproducts.In
additionthisdateshould,inconformitywithCommunitypractice,beeither
1Januaryor1Julyofayeartobedecided;
17.Administrative cooperation
(a)Inordertoguaranteetheproperfunctioning offreemovement
ofgoodsduringtheperiodofapplication oftransitional measuresfor
abolishingcustomsduties(andalsoforapplyingtheECSCharmonisedtariff),
itwillbenecessarytolaydownspecialrules,andinparticularto
determinemethodsofadministrative co-operation whichwillensurethat
customsdutiesandchargeshavingequivalenteffectareabolishedinrespect
ofgoodsmeetingthenecessaryrequirements .
(b)Itwillalsobenecessarytodeterminehowgoodsobtained
intheCommunityorinSpainfromgoodsfromnon-membercountries,under
arrangements involvingthesuspensionorrefundingofcustomsdutiesor
otherimportcharges,couldbebroughtunderCommunityarrangements in
tradebetweentheCommunityandSpain.
(c)Lastly,saveforcertainexceptionstobedetermined,
Communitycustomslegislationgoverningtradewithnon-membercountries
willcontinuetoapplyinthesamewaytotradebetweentheCommunity
andSpainaslongascustomsdutiesareleviedbetweenthem.

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CHAPTER5;PRICINGSYSTEM
18.OnaccessionSpanishenterpriseswillhavetoapplythe
pricingrulescontainedintheECSCTreaty(articles4b,60to64)
anddecisionsrelatingthereto.
19.ThebasicrulesoftheECSCTreatyinthisfieldarethose
ofnon-discriminatory pricingandfaircompetition.Theserulesforbidsecret
reductions,purelytemporaryorpurelylocalpricereductionstending
towardstheacquisition ofamonopolypositionwithinthecommonmarket
anddiscriminatory practicesinvolving,withinthecommonmarket,the
application by,asellerofdissimilarconditionstocomparabletransactions
especiallyongroundsofthenationality ofthebuyer.
Theaimoftransparency ofpricesisabovealltoinform
competitors inordertofacilitatealignments,toinformtheuserof
marketpricesandtoinformtheauthorities ofthecorrectapplicationof
thepricingsystem.
Underthepricelist.systemeachproducermustdiscloseaprice
exasinglebasingpointforthesameproduct.

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CHAPTER6:TRANSPORT
20.Communityrules(article70oftheTreatyandsecondary
legislation )prohibitdiscrimination andsupportinratesandconditions
ofcarriageandimposetheobligationtoensureadequatepublicityof
ratesandconditionssothattheserulescanbeobservedandtheprovisions
ofArticle60applied(pricelists,calculation ofprices,alignment).
Spainwillthusberequirecj,fromaccession
(i)toabolishdiscrimination inratesandconditionsofcarriage
foeE.C.S.C.products;
(ii)toestablishinternational directratesfortrafficbetween
MemberStatesandtobringaboutadequatetransparency inthe
ratesandconditionseffectivelyappliedthatarecompatible
withtheproperfunctioning ofthecommonmarket;
(iii)toabolishcarriageratesandconditionsinvolvinganyelement
ofsupportorobtaintheagreementoftheCommissionforthemin
accordancewiththefourthparagraphofArticle70ofthe
E.C.S.C.Treaty.

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CHAPTER7:RULESOFCOMPETITION
21.Thissectioncoversbothundertakings andstateaids.The
relevantTreatyprovisions (articles4candd,65to67)andthe
secondarylegislationtowhichtheseprovisionshavegivenrise,
constituteavitalelementofthe"acquiscommunautaire".Assuchthey
shouldapplytoSpainwithoutexceptionfromthemomentofaccession
ifdistortions intheprocessofintegrationaretobeavoided.
Particularattentionshouldthereforebepaidtotherules
andproceduresgoverningthissectorasregardscompetition whetherat
thelevelofundertakings (Articles60,65and66oftheTreaty)orof
stateaids(Articles4(c)and67oftheTreaty).

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CHAPTER8;FINANCIAL CONTRIBUTION TOE.C.S.C. FUNDSANDLEVIES
22.AsaMemberState/Spainwillberequiredtomakeafinancial
contribution to.thefundsoftheEuropeanCoalandSteelCommunity.
Spainshouldmakeitscontribution onaccessioninaccordancewith
arrangements tobeworkedoutatalaterstageofthenegotiations .
Thecriteriaonwhichthiscontribution shouldbefixedwillinclude,
inparticular,theimportanceofSpain'sproductionofE.C.S.C.products
inrelationtotherestoftheCommunityatthetimeofaccessionand
afterwards .
23.Onaccessionthelevyontheproductionofcoalandsteel
providedforinArticles49and50oftheE.C;S.C.Treatywillhaveto
beappliedinrespectofundertakings inaccordancewiththeruleslaid
downintherelevantgeneraldecisions.

CHAPTER 9:EXTERNAL RELATIONS
24. Certain Member States operate avery limited number ofnational
restrictions onsome imports ,butnorestrictions assuch exist atCommunity
ievel .
However ,national regimes forimports ofECSC products from State -
trading countries (l)aresubject totheprovisions oftheDecision ofMember
States' representatives meeting inCouncil of21April 1975 *This decision
establishes Community safeguard procedures aswell asaharmonised liberalisation
list . "Spain will ,.onaccession ,bebound bytheprovisions ofthis Decision *
National quotas arefixed annually forfive Member States forimports
from these countries ofcertain other products ,bytheMember States'
Representatives meeting inCouncil ,incollaboration with theCommission .
Should Spain wish tooperate national restrictions onimports from these
countries ,these must beintegrated into this procedure .TheCommunity
safeguard procedures established bytheDecision of21April 1975w®
applicable irrespective oftheexistence ornotofnational import quotas .
25. Itshould benoted that Spain 'sacceptance' ofthe "acquis communautaire "
also involves acceptance intheir entirety oftheagreements concluded with
third countries bytheCommunity "orjointly bytheMember States .This
applies totheagreements concluded with Turkey ,theE.F.T.A. countries ,
theMaghreb andMashrak countries ,Israel andtheAiC.P. -States .Inall
'cases protocols ofadaptation will berequired forthese agreements .
26, Spain will have toadopt theE.C.S.C. -E.F.T.A. agreements inplace
^--Qfitsrecently-signed trade agreement with E.F.T.A. countries andtoabolish
anybther preferential treatment accorded tothird countries .
27, Inaddition Spain will have toadopt thenon-contractual preferential
rules infavour ofOverseas Countries andTerritories andthedeveloping
countries inthecontext oftheG.S.P. aswell asthespecial rtfgime for
imports from theFaeroe Islands .Qfit
anr o
(1)
Albania ,Gennan Democratic Republio ,Bulgaria ,China ,N.Korea ,Hungary ,
Mongolia ,Foland ,Rumania ,Czechoslovakia ,USSR ,Vietnam .

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28.Asageneralruleitshouldbeforeseenthattheapplication
bySpainofthecontractual andnon-contractual tariffpreferences
shouldbeimplementedgradually,accordingtotransitional arrangements,
whichinthecaseofcontractual engagementswillhavetobeagreed
withthethirdcountriesconcerned,soastoenterintoforceonthe
dateofSpain'saccessiontotheCommunity.
29.AsaMemberStateSpainshallnotgiveamorefavourable
treatmenttothirdcountriesthartthatgiventotheotherMemberStates.

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CHAPTER10;OTHERPROBLEMS
30.Spainmustonaccessionadoptsuchmeasuresandobligations
asmayexistwi-thintheframeworkofaspecificCommunitysectoral
policyoncoalandsteel.