Proposal for a COUNCIL DECISION concerning the suspension of the trade and trade-related provisions of the Cooperation Agreement between the European Community and the former Yugoslav Republic of Macedonia signed on 29 April 1997

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. The exceptional trade measures for countries and territories participating in or linked to the European Union's Stabilisation and Association process adopted by the Council on 18 September 2000 (Council Regulation (EC) 2007/2000 of 18 September 2000) [1] introduced a very high degree of duty-free access to the EC market (around 95%) for Albania, Bosnia and Herzegovina, Croatia and Kosovo as defined by UNSC Resolution 1244 of 10 June 1999, granted limited concessions for Montenegrin aluminium products originating in the FRY and continued the granting of wine concessions in form of a global tariff quota which equally applies to the former Yugoslav Republic of Macedonia and Slovenia pending the conclusion of wine agreements with these countries. These improved preferences are linked to specific conditions to be respected by the beneficiaries (economic reforms, regional cooperation, standstill clause) and contain specific anti-fraud provisions underpinned by a strengthened temporary suspension clause.

[1] OJ L 240, 23.09.2000, p.1.

2. In the light of recent developments in the Federal Republic of Yugoslavia (FRY), the General Affairs Council of 9 October 2000 asked the Commission to submit a proposal on extending to the FRY the benefit of these exceptional trade measures.

The full extension to the FRY of these autonomous trade preferences will overrule the limited concessions (tariff quotas) for Montenegrin aluminium products originating in the FRY contained in Council Regulation (EC) 2007/2000. It is, therefore, proposed to repeal these quotas. On the other hand, Kosovo, as defined by UNSC Resolution 1244 of 10 June 1999, is subject to international civil administration by the United Nations Mission in Kosovo (UNMIK) which has established a separate customs administration. Therefore, it is proposed to maintain Kosovo as a separate beneficiary for the autonomous trade preferences.

3. Recital (11) of Council Regulation (EC) 2007/2000 already indicated that the equivalent of improved autonomous trade preferences under this Regulation would be granted to the former Yugoslav Republic of Macedonia, currently linked to the European Community by a Cooperation Agreement (with trade preferences at a less preferential level), pending completion of the negotiations on a Stabilisation and Association Agreement with the European Community and its Member States. The former Yugoslav Republic of Macedonia already benefits from concessions for wine under Regulation (EC) 2007/2000. In order to achieve the objective of granting improved trade preferences, it would have been necessary to either amend the existing Cooperation Agreement or to suspend its trade and trade-related provisions and apply the autonomous trade preferences on an interim basis.

Given that the former option would have entailed lengthy procedures resulting in discrimination of the former Yugoslav Republic of Macedonia relative to the other countries covered by the Regulation, the option of suspending the trade provisions of the existing Cooperation Agreement by means of an exchange of letters between the European Community and the former Yugoslav Republic of Macedonia, based on a Council Decision and extending the autonomous trade preferences has been chosen. This extension is of course of provisional nature until the entry into force of a Stabilisation and Association Agreement or of an Interim Agreement on trade and trade-related matters related to the Stabilisation and Association Agreement with this country.

4. The aim of the attached proposal for a Council Regulation (EC) amending Council Regulation (EC) No 2007/2000 is:

* to extend the autonomous trade preferences contained in Council Regulation 2007/2000 to the FRY while repealing the tariff quotas for aluminium products and keeping Kosovo as defined by UNSC Resolution of 10 June 1999 as a separate beneficiary;

* to extend provisionally the autonomous trade preferences to the former Yugoslav Republic of Macedonia;

* to adjust the tariff quotas for certain fishery products in the light of the extension of the autonomous trade regime to both countries;

* to remove the former Yugoslav Republic of Macedonia from the GSP.

5. For both countries the granting of these trade preferences is linked to their readiness to engage in effective economic reforms and in regional cooperation with the other countries concerned by the EU Stabilisation and Association process. In practice, the implementation of the trade preferences for the FRY will equally require full cooperation between all relevant authorities within the FRY (between the Republics of Serbia and Montenegro) and between the FRY and UNMIK, because of the latter's specific responsabilities for Kosovo.

6. The aim of the attached proposal for a Council Decision (EC) is:

* to approve the suspension of the trade and trade-related provisions of the Cooperation Agreement between the European Community and the former Yugoslav Republic of Macedonia by means of an exchange of letters;

* to authorize the President of the Council to designate the person empowered to sign the letter in order to bind the Community.

7. The Commission proposes the attached proposals for a Council Regulation (EC) amending Council Regulation (EC) No 2007/2000 by extending to the former Yugoslav Republic of Macedonia and the Federal Republic of Yugoslavia the exceptional trade measures for countries and territories participating in or linked to the European Union's Stabilisation and Association process and amending Regulation (EC) No 2820/98 and for a Council Decision concerning the suspension of the trade and trade-related provisions of the Cooperation Agreement between the European Community and the former Yugoslav Republic of Macedonia signed on 29 April 1997 for adoption to the Council.

2000/0285 (ACC)

Proposal for a COUNCIL DECISION concerning the suspension of the trade and trade-related provisions of the Cooperation Agreement between the European Community and the former Yugoslav Republic of Macedonia signed on 29 April 1997

THE COUNCIL OF THE EUROPEAN UNION

Having regard to the Treaty establishing the European Community, and in particular Art. 133 thereof, in conjunction with Art. 300, 2, second indent;

Having regard to the proposal from the Commission,

Whereas,

(1) A Cooperation Agreement between the European Community and the former Yugoslav Republic of Macedonia was signed by way of an exchange of letters on 29 April 1997, and entered into force on 1 January 1998;

(2) Council Regulation (EC) No. 2007/2000 [2] introducing exceptional trade measures for countries and territories participating in or linked to the European Union's Stabilisation and Association process, amending Regulation (EC) No 2820/98, and repealing Regulations (EC) Nos 1763/1999 and 6/2000, does not apply to imports into the Community of products originating in the former Yugoslav Republic of Macedonia with the exception of wine imports;

[2] OJ L 240, 23.09.2000, p.1.

(3) By Council Regulation (EC) No...../2000 amending Council Regulation (EC) No. 2007/2000 the equivalent of improved autonomous trade preferences under Council Regulation No. 2007/2000 has been granted to the former Yugoslav Republic of Macedonia, with the exception of concessions for wine, until the entry into force of an Interim Agreement on trade and trade-related matters in the context of the Stabilisation and Association Agreement between the Community and its Member States and the former Yugoslav Republic of Macedonia or the Stabilisation and Association Agreement between the Community and its Member States and the former Yugoslav Republic of Macedonia;

(4) The trade provisions and related annexes of the Cooperation Agreement therefore need to be suspended in order to apply to the former Yugoslav Republic of Macedonia the improved autonomous trade preferences under Council Regulation No. 2007/2000, as amended by Council Regulation (EC) No...../2000 .

HAS DECIDED AS FOLLOWS

Article 1

The exchange of letters, attached in the Annex, between the European Community and the former Yugoslav Republic of Macedonia concerning the suspension of Title II on trade and trade related provisions, including the relevant Annexes, of the Co-operation Agreement between the European Community and the former Yugoslav Republic of Macedonia signed by way of exchange of letters on 29 April 1997 is hereby approved on behalf of the European Community.

The President of the Council is hereby authorised to designate the person empowered to sign the letter in order to bind the Community.

Article 2

The decision shall be published in the Official Journal of the European Communities. It shall apply from the day of application of the Council Regulation (EC) amending Council Regulation (EC) No. 2007/2000.

Done at Brussels, .....

For the Council

The President

ANNEX

EXCHANGE OF LETTERS

Between the European Community and the former Yugoslav Republic of Macedonia concerning the suspension of trade and trade-related provisions of the Cooperation Agreement

Letter from the European Community

Sir,

In view of the improved autonomous trade preferences approved by the Council Regulation (Ec) No 2007/2000 of 18 September 2000, introducing exceptional trade measures for countries and territories participating in or linked to the European Union's Stabilisation and Association process, amending Regulation (EC) No 2820/98, and repealing Regulations (EC) Nos 1763/1999 and 6/2000, as last amended by Council Regulation No. .... , it has been agreed between the European Community and the former Yugoslav Republic of Macedonia to suspend the provisions of Title II on trade and trade related provisions, including all related Annexes, of the Cooperation Agreement between the European Community and the former Yugoslav Republic of Macedonia signed by way of exchange of letters on 29 April 1997.

Council Regulation (EC) No. 2007/2000 of 18 September 2000, as amended by Council Regulation no. ....will therefore regulate, as from its date of application, the trade regime between the European Community and the former Yugoslav Republic of Macedonia and the Title II on trade and trade related provisions, including all related Annexes, of the Cooperation Agreement between the European Community and the former Yugoslav Republic of Macedonia, shall cease to apply to former Yugoslav Republic of Macedonia at the same date.

The suspension of Title II, and all trade related provisions of the Cooperation Agreement shall cease whenever the Council Regulation (EC) No. 2007/2000 will cease to apply to the former Yugoslav Republic of Macedonia.

Council Regulation (EC) No. 2007/2000, as amended, shall cease to apply to products originating in former Yugoslav Republic of Macedonia upon entry into force of an Interim Agreement on trade and trade-related matters in the context of the Stabilisation and Association Agreement between the Community and its Member States and the former Yugoslav Republic of Macedonia or the Stabilisation and Association Agreement between the Community and its Member States and the former Yugoslav Republic of Macedonia.

I would be grateful if you could confirm the agreement of the former Yugoslav Republic of Macedonia to the above.

[formule de politesse]

On behalf of the European Community

Letter from the former Yugoslav Republic of Macedonia

Sir,

I have the honour to acknowledge receipt of your letter, herewith attached, concerning the suspension of Title II on trade and trade related provisions, including all related Annexes, of the Cooperation Agreement between the European Community and the former Yugoslav Republic of Macedonia signed by way of exchange of letters on 29 April 1997.

The former Yugoslav Republic of Macedonia has the honour to confirm its agreement with the content of this letter.

[formule de politesse]

For the Government of the

former Yugoslav Republic of Macedonia