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•it -tt COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 17.06 1997 
COM(97) 301 final 
97/0167 (ACC) 
Proposal for a 
COUNCIL REGULATION (EC) 
re-introducing a 12% rate of duty to be applied by the 
Community on certain products falling within CN heading 5607. 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
1. In January 1989 the Brazilian authorities imposed an export tax on sisal fibres at 13% of 
the fob price. Brazilian exporters of processed sisal products were exempt from the tax. 
Given the risk of injury to the EC processing industry the Community entered into 
consultations with Brazil in GATT under Article XXII(l) but failed to reach a mutually 
satisfactory solution. To encourage Brazil to change its discriminatory system, the 
Community therefore took action under Article XXVIII, suspending its 12% bound rate on 
the following products: 
5607 Twine, cordage, ropes and cables, whether or not plaited or braided and 
whether or not impregnated, coated, covered or sheathed with rubber or 
plastics: 
- of sisal: 
5607 21 00 Binder or baler twine 
5607 29 Other: 
5607 29 10 Measuring more than 100 000 décitex (10 grammes per metre) 
5607 29 90 Measuring 100 000 décitex (10 grammes per metre) or less 
The Community opted to suspend the bound rates rather than change them permanently as 
this allowed it to continue negotiating with Brazil for a mutually satisfactory solution.. 
Concomitantly, Council Regulation (EEC) No 283/911 set the Community's autonomous 
rate of duty for these products at 25%. 
2. During the Uruguay Round negotiations the Community offered to bind duties for sisal 
fibres at 12%. An exchange of letters between the EC and Brazil stipulated that this 
concession would apply once the Brazilian authorities eliminated export taxes on the 
products, and for such time as no further such taxes were imposed. 
The Community undertook to apply the 12% concession as soon as the Brazilian authorities 
could confirm that the export taxes applied by the States of Paraiba and Bahia, the main 
producers and exporters of sisal fibre, had been definitively eliminated. 
Brazil confirmed by letter its approval of "Convenio ICMS 33/94" and adoption of Decrees 
Nos 16293/94 and 3237 making sisal fibre exports from those two States definitively 
exempt from the export tax. 
However, these measures did not remove all tax discrimination against sisal fibre exports. 
As Brazil has confirmed by letter, only by supplementary law No 87/96 of 13 September 
1996 were exports of all primary products and semi-finished industrial products, including 
sisal fibres, made exempt from the ICMS in all States of Brazil. 
Council Regulation (EEC) N° 283/91 of 4.2.91, OJ No L 35 of 7.2.91, p.l 
Conclusion 
The Commission believes this arrangement constitutes a mutually satisfactory solution, 
taking both sides back to the situation that existed before 1989. It recommends that the 
Council restore the 12% duty concession on the products concerned forthwith. 
The concession remains conditional on Brazil refraining from any future action to 
reintroduce export taxes or charges having equivalent effect on sisal fibres. 
Proposal for a 
COUNCIL REGULATION (EC) 
re-introducing a 12% rate of duty to be applied by the 
Community on certain products falling within CN heading 5607. 
The Council of the European Union 
Having regard to the Treaty establishing the European Community and in particular Article 113. 
Having regard to the proposal from the Commission, 
Whereas the import duty on processed products of sisal or other textile fibres of the genus Agave 
falling within CN headings 5607 21.00, 5607 29.10 and 5607 29.90 was reduced and bound at 
12% by the Community in the context of the Tokyo Round of Multilateral Trade Negotiations. 
Whereas the bound rate of 12% on these products was subsequently withdrawn in accordance 
with the provisions of GATT Article XXVIII and replaced by an autonomous rate of 25% in 
Council Regulation (EEC) 283/91. 
Whereas, in the context of the Uruguay Round of Multilateral Trade Negotiations, the 
Community undertook to reintroduce the 12% duty rate once Brazil had definitely eliminated 
the tax applied on exports of sisal fibres by the States of Paraiba and Bahia; whereas the 
Community made this undertaking on condition that no new export taxes or taxes having an 
equivalent effect are applied to exports of these products by Brazil. 
Whereas Brazil has confirmed that exports of sisal fibres are exempted from ICMS taxes in all 
Brazilian States under Complementary Law 87/96 of 13 September 1996: whereas, as a 
consequence it is now appropriate to reintroduce the 12% duty rate and to repeal Council 
Regulation (EEC) 283/91 in order to take account of the above: whereas the condition 
mentioned above remains valid. 
HAS ADOPTED THIS REGULATION 
Article 1 
Annex I to Council Regulation (EEC) No. 2658/87 is modified as follows: 
CN 
Code 
1 
5607 
5607 10 00 
5607 21 00 
5607 29 
5607 2910 
5607 29 90 Description 
2 
Twine, cordage, ropes and cables, 
whether or not plaited or braided 
and whether or not impregnated, 
coated, covered or sheathed with 
rubber or plastics : 
- Unchanged 
- Of sisal or other textile fibres of 
the genus Agave 
- - Binder or baler twine. 
- - Other : 
- - - Measuring more than 100 
000 decitex (10 g/m) 
- - -Measuring 100 000 decitex 
(10 g/m) or less Rate of Duty Supplementary 
unit 
autonomous conventional 
(%) (%) 
3 
Unchanged 
16 
16 
16 4 
Unchanged 
12 
12 
12 5 
-
ArtMe I 
Council Regulation (EEC) No. 283/91 is hereby repealed. 
Article 3 
The present regulation shall enter into force the day following that of its publication in the 
Official Journal of the European Communities. 
This Regulation shall be binding in its entirety and directly applicable in all Member States. 
Done at Brussels 1997 For the Council 
The President 
FINANCIAL STATEMENT 
Section I. Financial Implications 
1. Proposal for a Council Regulation reintroducing a 12% duty rate for certain sisal products. 
2. Budget heading: (loss of revenue: not known) 
3. Legal basis: Article 113 
4. Description 
The proposed regulation is a consequence of an undertaking made by the Community in the 
Uruguay Round to restore the original 12% duty once Brazil had eliminated their export 
taxes on sisal fibres which had caused the Community to increase the duty on sisal products 
to 25%. 
5. Type of revenue: Loss of revenue for duties paid on third country imports. 
6. Change in level of revenue: 
The reduction of the existing 25% duty to 12% will result in a duty loss of around 0.2 
MECU. 

ISSN 0254-1475 
COM(97) 301 final 
DOCUMENTS 
EN 11 10 03 
Catalogue number : CB-CO-97-289-EN-C 
ISBN 92-78-21432-9 
Office for Official Publications of the European Communities 
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