OMMISSION OF THE EUROPEAN COMMUNITIES 
COMC89) 674 final 
Brussels, 20 December 1989 
Proposal for a 
COUNCIL DECISION 
concerning adjustments to the voluntary restraint agreement 
for sheepmeat and goatmeat concluded with Uruguay 
(presented by the Commission) 
EXPLANATORY MEMORANDUM 
1. The changes recently decided on for Improving the operation of the 
common organization of the market in sheepmeat and goatmeat will 
result in tighter discipline and a decrease In support for Community 
producers. 
As the Commission has emphasized several times in Its communications 
to the Council on the future of the CAP, the extra effort being 
required from the Community's agricultural producers must be backed 
up by parallel import measures. This in turn will make It necessary 
to make adjustments to the voluntary restraint agreements concluded 
between the Community and the main supplier countries. 
2. It was against this background and in line with the conclusions of 
the European Council of February 1988 that the Council adopted 
negotiating directives for this subject on 15 November of the same 
year. Negotiations, notably with Uruguay, followed and resulted in 
the attached draft agreement. 
3. The essential elements of the adjustments to be made are as follows: 
- reducing the quantities initially provided for, which are reduced 
from 5 800 t to 5 220 t. However, until 31 December 1990, Uruguay 
may deliver a part of the quota attributed to another supplying 
country which has not been used in 1989. This (non-utilized) 
quantity is fixed at 1 700 t of which 500 tonnes is a form which 
has never been frozen. 
- setting up a system of Import price surveillance; 
- restricting the opportunities for importing chilled meat; 
- total suspension of import levies-, 
- provisions for sensitive areas of the Community for 1989 and 1990. 
4. The issue of sensitive areas will be addressed in an additional 
exchange of letters between the Commission and Uruguay. For the 
quantities Involved, Uruguay will undertake that for 1989 the exports 
to France are limited to 400 t and to 100 t for Ireland (carcass 
weigh equivalent). In 1990, these limits will be increased by 20%. 
PROPOSAL FOR A COUNCIL DECISION 
concerning adjustments to the voluntary restraint agreement 
for sheepmeat and goatmeat concluded with Uruguay 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
and in particular Article 113 thereof, 
Having regard to the proposal from the Commission, 
Whereas the Community has taken measures to stabilize the market in 
sheepmeat and goatmeat and whereas it intends to bring about better 
Integration of that market; 
Whereas in the context of those adjustments to the common organization of 
the market it would be opportune to make adjustments to the voluntary 
restraint agreements concluded in the sector with certain third countries, 
in order to stabilize imports and improve import prices, 
Whereas the Commission has held negotiations on the matter which have led 
to an agreement with Uruguay, 
HAS DECIDED AS FOLLOWS: 
Article 1 
1. The Agreement in the form of an exchange of letters concerning 
adjustments to the voluntary restraint agreement for sheepmeat and 
goatmeat with Uruguay, 
is hereby approved on behalf of the European Economic Community. 
The text of the Agreement Is attached to this Decision. 
Article 2 
The President of the Council is hereby authorized to designate the person 
empowered to sign the Agreement in order to bind the Community. 
Done at Brussels, For the Council, 
The President 
FINANCIAL STATEMENT 
DATE: 11 December 1989 
1. BUDGET HEADING: 100 APPROPRIATIONS: ECU 1 152,8 mi II ion 
1990 draft budget 
2. TITLE: Proposal for a Council Decision concerning the adaptation of the voluntary restraint agreement 
between the European Economic Camunity and Uruguay on trade in sheepmeat and goatmeat 
3. LEGAL BASIS: Article 113 of the Treaty 
4. AIMS OF PROJECT: To import a quota of 5 220 tonnes of sheepmeat frcm Uruguay subject to zero levy. 
5. FINANCIAL IMPLICATIONS 
5.0 EXPENDITURE 
- CHARGED TO THE EC BUDGET 
- (REFUNDS/INTERVENT ION) 
- NATIONAL ADMINISTRATION 
-OTHER 
5.1 REVENUE 
- OWN RESOURCES OF THE EC 
(LEVIES/CUSTOMS DUTIES) 
- NATIONAL Period of 12 months 
p.m. (1) 
- ECU 0,9 mi 11 ion Current Financial Year 
1990 
p.m. (1) 
- ECU 1,4 mi 11 Ion Following Financial Year 
1991 
p.m. (1) 
- ECU 0,9 ml 11 Ion 
1992 
5.0.1 ESTIMATED EXPENDITURE 
5.1.1 ESTIMATED REVENUE p.m. 
ECU 0,9 ml 11 Ion 
5.2 METHOD OF CALCULATION: The average levy appl led to imports of sheepmeat Is ECU 1,750/t. However, for 
imports frcm Uruguay the levy is limited to the autonomous 10% duty arising frcm binding within the 
GATT, i.e. approximately ECU 150/t. The abolition of this duty would result in a loss of revenue over 
12 months of: 5 220 t x ECU 150/t x 1,14 (DR) - ECU 0,9 m ill ion 
Since the measure applies retroactively from 1 January 1989, In 1990 levies collected In 1989 on Imports 
of meat frcm Uruguay must be refunded. The cost of reimbursement In the 1990 financial year is estimated 
at ECU 0,5 mi 11 ion. 
(TÔTCAN THE PROJECT BE FINANCED FRCM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE CURRETFBUX* n "" 
Hi 
6.1 CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET? 
6.2 IS A SUPPLEMENTARY BUDGET NECESSARY? m 
M> 
6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? 
YFS 
OBSERVATIONS: 
(1) No precise ccnmltment appears In the agreement as regards import prices and the zero Import levy on such 
meat could result in a fall in prices on the Camunity market with a corresponding rise in premluns 
granted and therefore In expenditure to the Camunity budget. It is difficult to estimate the scale. 
cost. 
- 7 -
FICHE D'IMPACT SUR LA COMPETITIVITE ET L'EMPLO 
Proposition de Décision du Conseil 
concernant l'adaptation de l'accord d'auto-lImitât ion avec l'Uruguay 
Ce projet d'accord envisage une modification du régime à l'importation des 
viandes ovine et caprine, actuellement applicable dans le cadre de l'accord 
d'auto-limitation conclu avec l'Uruguay. 
Dans la mesure où il prévoit essentiellement, d'une part, le maintien des 
quantités importées et, d'autre part, l'instauration d'une procédure de 
surveillance des prix à l'importation, ce projet n'a pratiquement pas 
d'impact sur les entreprises. On peut également considérer que les 
modifications proposées ne leur Imposeront pas de coûts supplémentaires. 
EXCHANGE OF LETTERS RELATING TO THE 1980 AGREEMENT BETWEEN 
THE EUROPEAN COMMUNITY AND URUGUAY ON TRADE 
IN MUTTON AND LAMB. 
A. Letter N°1 
Sir, 
I have the honour to refer to the exchange of letters of 14 October 1980 
constituting an Agreement between the European Community and Uruguay 
establishing provisions relating to import of mutton and lamb Into the 
Community from Uruguay and to negotiations held between our respective 
delegations for the purpose of establishing temporary derogations from 
certain of those provisions concurrent with the implementation of measures to 
stabilise the European Community sheepmeat sector and to reform the European 
Community's Internal regime In order to achieve a unified European Community 
sheepmeat market. Accordingly, they have agreed on the following derogations 
from the Principal Agreement which shall remain in force for the duration of 
this Agreement. 
Clause 1 
Access and quant ity 
In Clause 2 of the Principal Agreement, as modified by Clause 6 of the 
Principal Agreement, the celling figure of 5.800 t shall be deemed to 
have been replaced by the figure of 5.220 t. This ceiling shall be 
deemed to include a maximum in 1989 of 2.000 t metric tonnes of lamb 
imported into the European Community from Uruguay in a form which has 
never been frozen, a maximum of 2.200 metric tonnes in 1990, a maximum 
of 2.400 metric tonnes In 1991, and a maximum of 2.600 metric tonnes 
in 1992. 
B. Tariff 
In Clause 5 of the Principal Agreement, the words "a maximum amount of 
10%, ad valorem" shall be deemed to be replaced by the word "zero". 
C. Price surveillance • 
With a view to improved sheepmeat prices within the European 
Community, prices for lamb Imported from Uruguay will be monitored in 
accordance with the procedures contained in the annex to this 
Agreement. 
Clause 2 
Consultation 
Notwithstanding Clause 1 C) of this Agreement either Party may request 
consultations concerning the operation of this Agreement at any time. 
CI ause 3_ 
GATT obi I gat Ions 
The provisions of this Agreement shall be agreed without prejudice to the 
rights of Uruguay and the European Community under GATT. 
Clause 4 
This Agreement shall enter into force on 1 January 1989 and shall remain in 
force until 31 December 1992. 
CI ause 5. 
Within 6 months prior to expiration of this Agreement, Its provisions shall 
be reviewed. 
I have the honour to propose that, if the foregoing is acceptable to your 
Goverment, this letter and your confirmatory reply shall together constitute 
and evidence an Agreement between the European Economic Community and Uruguay 
on the matter. 
Please accept, Sir, the assurance of my highest consideration. 
For the CounclI 
of the European 
Commun 111 es 
tJ 
ANNEX 
Price Surveillance Procedure 
1. The European Community will monitor the prices In each Member State 
for Imported frozen lamb carcasses from Uruguay on the basis of the 
average prices over each monthly period. 
2. The relationship between the prices for Imported frozen lamb carcasses 
from Uruguay In each Member State and the market prices for Community 
produced lamb In each such Member State will be compared with the 
benchmark level specified below for each such Member State. If this 
comparison Indicates that the price relationship has, in two Member 
States In the same month, moved below the benchmark levels for those 
Member States, technical consultations will take place at the request 
of either Party to determine factors causing the downward movement. 
The factors that will be taken into account by the parties in such 
consultations shall include traditional and seasonal price 
relationships and fluctuations, the prices of cuts, the impact of 
prices of other meats, and other exceptional factors. 
Me-roer States by region Benchmark levels for the 
: relationship between 
: pr ices of imported 
frozen 
lamb carcasses and 
pr Ices of 
domestically produced 
lamb. 
Northern Member States (Belgium, 
Denmark, Federal Republic of Germany, 
France, Ireland, Luxembourg, 
Netherlands, United Kingdom) 55 percent 
Southern Member States 
(Greece, Italy, Portugal, Spain 45 percent 
In the event that the downward movement of the relationship between 
prices for Uruguayan frozen lamb carcasses and Community produced lamb 
below the benchmark levels in the particular Member States under 
consideration Is indicative of a problem, the Parties shall consider 
any recommendations arising out of the technical consultations for the 
resolution of the problem. If the problem Identified is attributable 
to the prices at which Uruguayan frozen lamb carcasses are being sold 
In those member states by Uruguayan exporters then Uruguay would take 
what action is available to It to restore the price relationship 
between frozen lamb carcasses and Community produced lamb in those 
member states to the benchmark levels. 
Should the Parties In the technical consultations fail to reach 
agreement on appropriate measures to resolve the problem, the 
Consultative Committee established under Clause 10 of the Principal 
Agreement may be convened at a senior policy level at the request of 
either Party to give the matter urgent consideration. If agreement 
cannot be reached at official level, the matter may De referred by 
either party to the EC Commissioner for Agriculture and the Uruguayan 
*/.i-i/«iiltiir« 1r\r resolution. ~ •£ 
5. Uruguay and the European Community adopt as targets for achievement by 
the end of 1992 an improvement In the previously defined benchmark 
levels for Northern Member States by 5 percentage points and for 
Southern Member States by 8 percentage points. 
B. Letter N° 2 
Sir, 
I have the honour to acknowledge receipt of your letter of today's date, 
which reads as follows : 
"I have the honour to refer to the exchange of letters of 14 October 1980 
constituting an Agreement between the European Community and Uruguay 
establishing provisions relating to import of mutton and lamb Into the 
Community from Uruguay and to negotiations held between our respective 
delegations for the purpose of establishing temporary derogations from 
certain of those provisions concurrent with the Implementation of measures to 
stabilise the European Community sheepmeat sector and to reform the European 
Community's internal regime in order to achieve a unified European Community 
sheepmeat market. Accordingly, they have agreed on the following derogations 
from the Principal Agreement which shall remain In force for the duration of 
this Agreement. 
Clause i 
A. Access and quantIty 
In Clause 2 of the Principal Agreement, as modified by Clause 6 of the 
Principal Agreement, the ceiling figure of 5.800 t shall be deemed to 
have been replaced by the figure of 5.220 t. This celling shall be 
deemed to include a maximum In 1989 of 2.000 t metric tonnes of lamb 
imported Into the European Community from Uruguay In a form which has 
never been frozen, a maximum of 2.200 metric tonnes In 1990, a maximum 
of 2.400 metric tonnes In 1991, and a maximum of 2.600 metric tonnes 
In 1992. 
B. Tariff 
In Clause 5 of the Principal Agreement, the words "a maximum amount of 
10%, ad valorem" shall be deemed to be replaced by the word "zero". 
C. PrIce survelI lance 
With a view to improved sheepmeat prices within the European 
Community, prices for lamb imported from Uruguay will be monitored In 
accordance with the procedures contained in the annex to this 
Agreement. 
Clause 2 
Consultation 
Notwithstanding Clause 1 C) of this Agreement either Party may request 
consultations concerning the operation of this Agreement at any time. 
CIause 3 
GATT obi I gat Ions 
The provisions of this Agreement shall be agreed without prejudice to the 
rights of Uruguay and the European Community under GATT. 
CIause ± 
This Agreement shall enter Into force on 1 January 1989 and shall remain in 
force until 31 December 1992. 
CI ause 5_ 
Within 6 months prior to expiration of this Agreement, Its provisions shall 
be reviewed. 
I have the honour to propose that, If the foregoing is acceptable to your 
Goverment, this letter and your confirmatory reply shall together constitute 
and evidence an Agreement between the European Economic Community and Uruguay 
on the matter." 
I have the honour to confirm the foregoing is acceptable to my Government and 
that your letter together with this reply shall constitute an Agreement In 
accordance with your proposal. 
Please accept, Sir, the assurance of my highest consideration. 
For the Government 
of Uruguay 
ANNEX 
Price Surveillance Procedure 
1. The European Community will monitor the prices in each Member State 
for Imported frozen lamb carcasses from Uruguay on the basis of the 
average prices over each monthly period. 
2. The relationship between the prices for imported frozen lamb carcasses 
from Uruguay In each Member State and the market prices for Community 
produced lamb in each such Member State will be compared with the 
benchmark level specified below for each such Member State. If this 
comparison indicates that the price relationship has, in two Member 
States in the same month, moved below the benchmark levels for those 
Member States, technical consultations will take place at the request 
of either Party to determine factors causing the downward movement. 
The factors that will be taken into account by the parties in such 
consultations shall include traditional and seasonal price 
relationships and fluctuations, the prices of cuts, the impact of 
prices of other meats, and other exceptional factors. 
Member States by region Benchmark levels for the 
relationship between 
pr ices of imported 
frozen 
lamb carcasses and 
pr Ices of 
domestically produced 
lamb. 
Northern Member States (Belgium, 
Denmark, Federal Republic of Germany, 
France, Ireland, Luxembourg, 
Netherlands, United Kingdom) 
Southern Member States 
(Greece, Italy, Portugal, Spain 55 percent 
45 percent 
3. In the event that the downward movement of the relationship between 
prices for Uruguayan frozen lamb carcasses and Community produced lamb 
below the benchmark levels In the particular Member States under 
consideration Is indicative of a problem, the Parties shall consider 
any recommendations arising out of the technical consultations for the 
resolution of the problem. If the problem Identified is attributable 
to the prices at which Uruguayan frozen lamb carcasses are being sold 
In those member states by Uruguayan exporters then Uruguay would take 
what action is available to It to restore the price relationship 
between frozen lamb carcasses and Community produced iamb in those 
member states to the benchmark levels. 
Should the Parties in the technical consultations fail to reach 
agreement on appropriate measures to resolve the problem, the 
Consultative Committee established under Clause 10 of the Principal 
Agreement may be convened at a senior policy level at the request of 
either Party to give the matter urgent consideration. If agreement 
cannot be reached at official level, the matter may be referred by 
either party to the EC Commissioner for Agriculture and the Uruguayan 
Minister of Agriculture for resolution. 
5. Uruguay and the European Community adopt as targets for 
achievement by the end of 1992 an improvement in the 
previously defined benchmark levels for Northern Member States 
by 5 percentage points and for Southern Member States by 8 
percentage points. 
- 8 -
Letter No 1 
Brussels, 
Sir, 
I have the honour to refer to Clause 1 of the Exchange of letters dated 
relating to the 1980 Agreement between the European Community and Uruguay on 
trade In mutton and lamb. 
I also have the honour to confirm that before 31 December 1990, In addition 
to the celling of 5 220 metric tonnes, a quantity of 1 700 tonnes may be 
delIvered. 
This additional volume shall be deemed to include a maximum of 500 metric 
tonnes of lamb Imported Into the European Community from Uruguay in a form 
which has never been frozen. 
I should be obliged if you would kindly acknowledge receipt of this letter. 
For the Council of the 
European Communities 
- 9 -
B. Letter No 2 
Brussels, 
Sir, 
I have to acknowledge receipt of your letter of today's date which reads as 
fol lows : 
"I have the honour to refer to Clause 1 of the Exchange of letters "-ted 
..... relating to the 1980 Agreement between the European Community and 
Uruguay on trade In mutton and lamb. 
I also have the honour to confirm that before 31 December 1990, in addition 
to the celling of 5 220 metric tonnes, a quantity of 1 700 tonnes may te 
delivered. 
This additional volume shall be deemed to include a mnximum of 500 metric 
tonnes of lamb imported into the European Community from Uruguay in a form 
which has never been frozen. 
I should be obliged if you would kindly acknowledge receipt of this letter." 
Please accept, Sir, the assurance of my highest consideration. 
For the Government o-
Uruguay . 

ISSN 0254-1475 
COM(89) 674 final 
DOCUMENTS 
EN 03 il 
Catalogue number : CB-CO-89-614-EN-C 
ISBN 92-77-56263-3 
Office for Official Publications of the European Communities 
L-2985 Luxembourg