ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (82)73
Vol.1982/0028

Disclaimer
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concerning theopening tothepublic ofthehistorical archives oftheEuropean Economic
Community andtheEuropean Atomic Energy Community (OJL43,15.2.1983, p.1),as
amended byRegulation (EC, Euratom) No1700/2003 of22September 2003 (OJL243,
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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(82)73final
Brussels,^March1982
Recommendation fora
COUNCILDECISION
onthedirectivestobefollowedinnegotiations withcertainthirdcountr
ontheframeworkagreementsrelatingtomultiannual supplyofagricultural
products
(submittedtotheCouncilbytheCommission )

-y-
1.InitsCommunication totheCouncilof10August1981onthenegotiation
offrameworkagreementsrelatingtothemultiannual supplyofagricultu­
ralproducts,theCommissionannouncedthat,followingadebateinthe
Councilbodiesandinthelightofthediscussions heldthereandthe
positionswhichhademerged,itwouldsubmitdraftdirectivesforthe
opening .ofnegotiations withcertainapplicantthirdcountries.
2.TheaimoftheannexeddraftDecisionwhichtheCommissionisforwarding
totheCouncilistoobtainauthorization fortheCommissiontostart
negotiations withtheassistanceoftheArticle113CommitteewithAlge­
ria,Egypt,MoroccoandTunisiawithaviewtoconcluding frameworkagree­
mentsrelatingtothemultiannual supplyofagricultural products.
3.Inordertoclarifythediscussions,theCommissionfeltitwouldbe
appropriatetoattachtothisdraftDecisionreportsonthefact-finding
missionscarriedoutintheabovementioned countries.

ANNEXI
COUNCILDECISION
Onthedirectivestobefollowedinthenegotiations withcertainthird
countriesontheframeworkagreementsrelatingtomultiannual supply
ofagricultural products.
THECOUNCILOFTHEEUROPEANCOMMUNITIES,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
HavingregardtotheRecommendation fromtheCommission,
Whereasanumberofthirdcountrieshaveexpressedinterestinbeingableto
forecastdeliveriesofagricultural productsfromMemberStatesoftheCommunity
Whereasagreementsrelatingtothemultiannual supplyofagricultural products
mayfacilitate orderlydevelopment ofexportsofagricultural productsby
theEuropeanEconomicCommunity;
Whereas,consequently,theCommissionshouldbeauthorizedtoenterinto
negotiations withaviewtoconcludingsuchagreementswiththecountriescon­
cernedinaccordance withthedirectives containedinamodelframework
agreement,
HASDECIDED ASFOLLOWS:
Article 1
TheCommissionisherebyauthorizedtoenterintonegotiations withaview
tosigningframeworkagreementsrelatingtomultiannual supplyofagricul­
turalproductswiththecompetentauthorities ofAlgeria,Egypt,Moroccoand
Tunisia.
Article2
TheCommissionwillconductthenegotiations inconsultation withtheSpecial
CommitteeprovidedforinArticle113oftheTreatyandinaccordancewiththe
directivescontainedinthemodelframeworkagreementcontainedintheAnnex.
FortheCouncil
ThePresident

ANNEX
MODELFORAFRAMEWORK AGREEMENT WITH RELATING TOTHE
MULTIANNUALSUPPLYOFAGRICULTURAL PRODUCTS
TheCounciloftheEuropeanCommunities,oftheonepart,andtheGovernmentof
nameofcountry..//
Desirousofcontributing tothedevelopment ofcommercialrelationsand
tothestrengthening ofcooperation between/...nameofcountry and
theEuropeanEconomicCommunity,
Concernedtocontributetothesecurityoffoodsuppliesin/'...name
ofcountry
HavedecidedtoconcludeaFrameworkAgreementrelatingtothesupplyof
agricultural productsandtothisendhavedesignatedastheirPlenipoten­
tiaries:/...namesofpersons..._/
Whohaveagreedasfollows:
TITLEI
GENERALPROVISIONS
ArticleI
ThisFrameworkAgreement,hereinaftercalledtheAgreement,isdesigned
toassure/...nameofcountry..._/ofsuppliesofagricultural products
andtheEuropeanEconomicCommunityofoutletsforthosesameproductsona
regular,plannedandmutuallysatisfactory basis.
Article2
Theauthoritiesauthorizedtoenterintotherequisitecommitments asre­
gardstheoperationoftheAgreementshallbe:
-^ortheEuropeanEconomicCommunity,theCommissionoftheEuropean
Communities ;

-Ϋ­
-for/...nameofcountry...//suchandsuchaBody/.
Article3
TheproductscoveredbythisAgreementshallbe/listofproducts/.
Article4
1.ThisAgreementshallconstitute anundertaking,inaccordancewiththe
conditionslaiddownintheArticlesfollowing :
-onthepartoftheEuropeanEconomicCommunitytosupply/..„nameof
country..._/withcertainquantitiesof/listofproductsJ;
-onthepartof/...nameofcountry...Jtoimportthesamequantities
ofproductsfromtheEuropeanEconomicCommunity.
2.ForthepurposesofthisAgreement :
-"undertaking tosupply"shallmeanthattheCommissionoftheEuropean
Communities undertakestoadoptalltheprovisionsnecessaryincom­
pliancewithCommunityrulestoensuretheavailabilityof/theproducts./
inaccordance withtheconditionslaiddowninthis
Agreement;
-"undertakingtoimport"shallmeanthat/...nameofcountry
undertakestoadoptallnecessarymeasurestoinsuretheimportation
of/theproducts./fromtheEuropeanEconomicCommunityinaccordance
withtheconditionslaiddowninthisAgreement.
Article5
Thetransactions pursuanttotheundertakingenteredintobytheEuropean
EconomicCommunityasspecifiedinArticle4ofthisAgreementshallbe
theresponsibility ofprivateoperators.

Article6
1./...nameofcountry..._/shalldoeverythingnecessarytoensurethat
theproceduresitlaysdownforimporting/theproducts1originating
intheCommunitydonotresultindiscrimination betweenoperatorsinthe
EuropeanEconomicCommunity.
2.Itherebyundertakestoexercisethegreatestpossiblecaretoensurethat
thetenderingarrangements fortransport byseashallnotbeprejudicial
tothefreeplayoffaircompetition
Article7
TheCommissionoftheEuropeanCommunities and/...nameofcountry
herebyundertaketonotifyeachotheroftheprovisions andmeasuresadopted
fortheimplementation andexecutionoftheobligations underthisAgreement.
Article8
1.AJointCommitteeshallbesetuptoensurethatthisAgreementisproperly
implemented .
2.TheJointCommitteeshallbecomposed,ontheonehand,ofrepresentatives
oftheCommissionoftheEuropeanCommunities and,ontheother,ofrepre­
sentativesof/...nameofcountry..._/.
3.TheJointCommitteeshallmeetonceeveryfourmonthsatadateandplace
arrangedbymutualagreement.Itshallalsomeeteachtimetheneed
arises,attherequestofeitherofthePartiestothisAgreement.
■!mmm
1Thisclauseisindenticaltoonecontainedinlong-termagreements with
anumberofcountries andintheFoodAidConvention .

TITLEII
SPECIALPROVISIOMS
Article9
1.Thequantitiesof[[products^which..nameofcountry...^undertakesto
importandtheEuropeanEconomicCommunityundertakestosupply,under ,the
conditionssetoutinArticle4ofthisAgreement,shallbethefollowing
foreachmarketingyear:
-commonwheat(orequivalentinwheatflour):
aminimumοτ
andamaximumof...tonnes
tonnes
-durumwheatmeal:
aminimumof tonnes
andamaximumof...tonnes
-barley:
aminimumof tonnes
andamaximumof...tonnes
-etc.
2.ThemarketingyearwithinthemeaningofthisAgreementfor[_theproduct^
shallbeginonandshallendonofthefollowingyear,and
for[[theotherproduct~Jshallbeginonandshallendon
Article10
The[productJcoveredbythisAgreementshallcomplywiththequalitiesand
specifications traditionally adoptedintransactions betweentheEuropean
EconomicCommunityand£"...nameofcountry..."!.
Article11
Approximately twomonthsbeforethebeginningofeachmarketingyear,the
JointCommitteeshallmeetinordertodecidepreciselywhatquantitiesshall
besuppliedandimportedduringthatmarketingyearunderthisAgreementand
howthepurchasesshallbespreadoverthatyear.

~
Article12
Ifowingtoexceptional circumstancestherearelargequantitiesavailablein
£•••nameofcountry../JsrinsufficientquantitiesintheCommunity,theJoint
CommitteeshallmeetinordertoamendthequantitiesreferredtoinArticle9(1)
accordingly .
Article13
nameofcountry...jandtheEuropeanEconomicCommunityherbyagree,each
foritspart,tomakesucharrangements asarenecessarytoensurethatthe
transactions arecarriedoutatthepricesorquotationsprevailingonthe
worldmarket.
2.ThetwoPartiestothisAgreementwillconsiderwhetherthecreditfacilities
accordedbytheMemberStatesoftheCommunityortheirauthorizedrepresentatives
canbeappliedtothecontractstobeconcludedunderthisAgreement.
TITLEIII
B
FINALPROVISIONS
Article14
ThisAgreementshallbevalidforaperiodofthreemarketingyears.Thisperiod
maybetacitlyrenewedforafurtherthreeyears.
Article15
ThisAgreementshallcomeintoforceonthefirstdayofthemarketingyear
followingthatinwhichtheJ^Office andtheCommissionoftheEuropean
Communitiesnotifyeachotherthattheproceduresnecessaryforthispurpose
havebeencompleted.

Article16
ThisAgreementisdrawnupinduplicateinoneofthelanguagesofthe
Communityandin[fofficiallanguageofthenon-membercountryj,eachtext
beingequallyauthentic.
Mr .fortheCommissionofthe
EuropeanCommunities
Mr. for
Doneat this

-y-
REPORTS ONFACT-FINDING MISSIONS
INALGERIA.EGYPT.TUNISIA ANDMOROCCO

REPORT
CONCERNING EXPLORA ORYTALKSWITHTHEALGERIAN
ANDEGYPTIAN AUTHORITISREGARDING AFRAMEWORK AGREEMENT
FORTHEMULTIANNUAL SUPPLY OFAGRICULTURAI PRODUCTS
I.MISSIONTOALGIERS
1.TworoundsoftalkswereheldinAlgiersfrom4to6May,one
with,andundertheauspicesof,theMinistryofTrac?,andthe
otherwiththe.MinistryofAgriculture andtheAgrarianRevolu­
tion(MARA).Theheads <ariddeputyheads)ofthestatecorpora­
tionsorpublicboards.

-/-/-
actingonbehalfofoneorother,ofthesetwoMinistries (1)indirecting
supplieswerepresentateachsetoftalks.Also,withtheagreementof
thePresidency,abriefingsessionwiththeMemberStates'representati­
veswasorganized bytheCommission Delegation inAlgiers,sincethe
Algerianauthorities hadsentformalanddetailedrequestsdirectto
certainembassiesattheendofFebruary,concerning theconclusionof
long-termagreements .
2.Onagenerallevelthegre?timportance attachedbytheAlgerianautho­
ritiestotherapidconclusionofaframework agreement betweenthe
Community andAlgeriaforthemultiannual supplyofagricultural products
shouldbestressed.Thefactthattheyhaveplacedsuchstrongemphasis
onthistiesinwithpolitical andalsoeconomicmotiveswhichwerevery
clearlystatedineachroundofdiscussions .
■ :TheAlgeriansconsidertheCommission asaspecial
discussionpartner,sincethetalksaremadeeasierfromtheirpoint
ofviewbytheabsence,whendealingwiththeEuropeanEconomic Com­
munityassuch,ofotherconsiderations orextrapolated political and
psychological conflictswhichstopanyfurtherprogressatacertain
:stageingovernment-to-governmentrelations.Algeriaconsidersit
necessarytostrengthen theAssociation AgreementwiththeEECby
meansofanewapproachtofoodsecurity(marketsandsupplies).
■§£2Q2Sl£_!I!2ilve£ ■Algeriahasrequirements whichbecomegreaterevery
year,particularly asaresultofpopulation growth(550000more
mouthstofeedeveryyear),ther'iseinthestandardofliving,and
theveryslowgrowthrateofagricultural production;theCommunity
isnearAlgeria,whichreducesthecostsoftransporting supplies
accordingly,andonlytheCommunitycanprovidetheveryvariedrange
ofproductswhichthiscountrywithapopulationofalmost20million
1requires;
■/••■
(1)0RGANIZATI0N_0F_IMP0RTS_INT0 _ALGERIA:TheGovernment hasgiventhemonopoly
forprocurement fromabroadtonationalcorporations orboards,someofwhich
comeundertheMinistryofTradewhileotherscomeundertheMinistryof
Agriculture (MARA).ThosecomingunderTradearethe0NAC0(OfficeNational
deCommercialisation ),responsible mainlyformilkproductsfordirectconsump
tion,andtheSNNGA(SocieteNationale desNouvellesGaleriesAlgeriennes ),
responsibleforallsuppliesforthelargestores.ThosecomingunderAgri­
culturearetheOAIC(OfficeAlgerieninterprofessionnel desCereales)which
isresponsible forwheatandbarley,theSNSEMPAC(SocieteNationaledes
Semouleries,Meuneries,Fabriquesdepatesalimentaires etCouscous)respon­
sibleforpurchasing meal,flourandpasta,theONAB(OfficeNationaldes
AlimentsduBetail)andONALAIT(OfficeNationalduLaitetProduitsLaitiers)
responsiblefordomesticproduction andthereconstitution ofmilk.

Algeriaisalsoanxioustoembarkuponaprogrammeforthedevelopmentof
agricultural production (poultry-raising anddairyfarming,oneofthese
tobefinancedbytheEECunderthe1976FinancialProtocol)andonlythe
Communitycanprovideeffectivehelpandsupportinallsectors.
3.Iplithregardtothegeneralscopeandformofalong-termagreement,the
Commissionrepresentatives notedthatthe"approachsuggestedinthedraft
Communication totheCouncil(C0M(81)75)corresponded "almostperfectly"
tothatenvisagedbytheAlgerianauthorities .
(i)Thetypeofagreementbeingconsidered byAlgeriawouldbeaframe­
workagreement (oraframeworkconvention )providinggeneralcriteria
forthenegotiation andconclusionofcommercialcontractsbetween
Communityoperatorsandthecorporations ,boardsororganizations
whichholdthepurchasingmonopolyinAlgeria;
(ii)Theframeworkagreementorframeworkconvention wouldbeconcluded
betweenaCommunityauthorityandanAlgerianministerialauthority.
Twoadditional remarksshouldbemadeonthissubject:theAlgerians
areawareofthefactthatwheretheexportofaCommunityagricultu­
ralproductentailsthegrantingofarefund,aframeworkagreement
formultiannualsuppliesinvolvesanundertaking onthepartofthe
Communityassuch,astheyhavelearntfromexperiencethataCommu­
nityoperatororevenaMemberStatealwayswaitsfor9Commission
refunddecisionbeforeacting.Theyhavealsoleftopenthematter
ofwhetheroneortwoframeworkagreementswouldhavetobeconcluded,
inviewofthefactthat,eventhoughtheMinistryofTrade'sDirec-
torate-General forCoordination andSupervision hasahorizontalrole
andisresponsibleforallexternalsupplies,certainsboardsorstate
corporations comeundertheMinistryofAgriculture .
(iii)Theprovisionstobeincludedintheframeworkagreementshould,in
theopinionofourAlgerianpartners,beflexibleandstraightforward ,
sothattheycan,ifnecessary,beadaptedascircumstances require
andalsosothattradecanbeconductedfreely,butthecommitments
madebythetwosidesshouldnotbemerelynominalorinsufficiently
binding.

-J3-
4.Onthematteroftheactualcontentoftheframeworkagreement,thereis
againastrikingsimilarityofapproachbetweenwhatwasproposedtothe
Commissionon19FebruaryandtheAlgerians'stancenow.
Theframeworkagreementwouldcoverthefollowing:theperiodofapplica­
tionCathree-yearperiodhasbeenmentioned,butarequesthasalsobeen
madeforlinkagewiththepresentfive-yearplan);therangeofproducts
covered;thequantitiesconcerned(averymarkedpreferencehasbeenstated
foraquantitybracket,theactualsupplyandpurchasefiguresforagiven
yearbeingfixedbycommonaccordbeforethebeginningofthatyearinthe
lightoftherespectivesituationsofthecontractingparties);thewording
oftheundertakings givenbythetwosides,includingthedescription of
theadministrative measuresadoptedtoensuretheagreementisimplemented
throughnormaltradingchannels;thetermsofreference-withparticular
regardtoprices-forthecommercialdeliveryorpurchasecontractsbetween
CommunityoperatorsandtheAlgerianstatecorporations ;lastlytheadminis­
trativemachinery (fortheannualnegotiation ofquantities,operationof
thearrangements,etc.).
TheAlgerianauthoritiesalsoputforwardcertainpointswhichitshould,
intheiropinion,bepossibletoincludeintheframeworkagreement.Assu­
rancesshouldthusbegiven,withproperbacking,thatproductswhoseavai­
labilityisguaranteedundertheframeworkagreementreallyareofCommunity
originandthatnosingleoperatororMemberStatecanartificially esta­
blishadefactomonopoly("thereisnosingleautomaticchannel"),asthis
wouldpreventAlgeriafromstabilizingitspurchaseflowsonthebasisof
otherexternalordomesticrequirements (equilibrium initstradebalance
withaparticularcountry,etc.).TheAlgerianauthoritiesalsoconsider
thatifsuchaframeworkagreementwereconcluded,ajointefforttoimprove
thequalityoftheproductssoldbytheEECshouldbeundertaken-hencethe
needtoincludequalitative termsofreferencecorresponding ,forexample,
tothestandardsoftheAlgerianMinistryofHealth-andthatthesyste­
maticuseoflettersofcreditbyCommunityoperators (signofmistrust)
shouldbeabandonedinpayingforsuppliesundertheAgreement.
5.Averydetaileddiscussion washeldonthematterofprices.Variouspoints
shouldbesingledout.Firstly,Algeriaconsidersthat,inthelightof
thetwosides,andaboveallinviewofthefactthat,forexample,the

-/y-
EECplaysonlyanindirectroleinpriceformationthroughtherefund
mechanism,fixedpurchasingorsellingpricesorevenapricebracket
cannotbeestablishedintheframeworkagreement.Itnotes,however,
thattheleveloftherefundanditsdegreeofcontinuityduringamar­
ketingyeararedeterminingfactorsfortheconclusionofcontractsby
operators.TheAlgerianauthorities havevoicedanumberofcriticisms
.inthisrespectconcerningthepresentsystemofadministering refunds,
pointingtoitssomewhatarbitrarynature,whichpreventstheAlgerian
authorities frombeingabletorelyontheCommunityatalltimes;in
theiropinion,a"preferential difference"shouldbeestablished between
therulesgoverningtherefundapplicabletosuppliesundertheAgreement
andtherulesrelatingtosuppliesnotcoveredbytheagreement.Inother
words,itdoesnotseemtobeamatteroffixingapreferential refund
levelbutoflayingdownspecialrulesforthefixingoftherefund
(advancefixing-durationoftheadvancefixingarrangement,termsof
referenceoftheworldpriceusedtocalculatetherefund)foronlythose
quantitiescoveredbytheframeworkagreement.
TheAlgerianauthorities haveraisedthematterofthefinancingfacilities
grantedtoAlgeriainoneformoranotherbyothertradingpartners:export
creditgrantedbySwedenunderthelong-termwheatagreement,virtually
free.installation-1%interestover50years-ofintakesilosunderthe
long-termdurumwheatandbarleyagreementwithCanada,deferredpayment
undertheredmeatsupplyagreementsconcludedwithArgentinaandAustralia
etc.TheyhaveexpressedthewishthattheEEC,which,asexplained,
doesnotyethaveanexportcreditmechanism,shouldfollowupanyopera­
tionsundertaken bytheMemberStatesandorfinancetheinstallation in
Algeriaofintakecapacityforsomeoftheproductssupplied(refrigeration
facilities,silos,warehouses,portinfrastructure ,etc.).
6.Asregardsproductsandquantities,theAlgerianshavesuppliedalistof
whattheyestimatetobetheirimportrequirements (seeAnnexI),speci­
fyingthatthisdidnotmeanthatalltheseproductsandquantitiesshould
comesolelyfromtheCommunityanathateventhequantitieswhichcould
comefromtheCommunityshouldbecoveredbytheframeworkagreementon
multiannualsupplies;thislastremarktiesinwiththeideasexpressed
inCOM(81)75(seeparagraph 5.(ii).

Theystressedthat,whennegotiations wereinitiated,theirauthorities
wouldmakepreciseproposalsconcerningtherangeofproductsandthe
quantities -tobecoveredbytheframeworkagreement.
Theyalsodrewattentiontothefactthattherewere,strictlyspeaking,
threecategoriesofproducts ,whichcouldcomeunderaframeworkagreement :
-agricultural commodities :wheat,sugar,milkproductsforreconstitution ;
-agricultural productsfordirectconsumption :redmeat,butter,flour,
meal,rice,pasta,eggsfordirectconsumption ;
-productsintendedfortheprogrammeforthedevelopment ofagricultural
production :eggsforhatching,day-oldchicks,dairycows,compound
feedingstuffs .
Inthecaseofthelastcategory,theMinistryofTradeandtheMinistryof
Agriculturestressedthisrequestandtheparticularurgencyofmakinga
startonmeetingit,evenifonlyonaverysmallscale(poultryfarming),
sincethiswouldprovideanadditionalsourceofproductsforoneofthe
projectsfinancedundertheEEC-Algeria FinancialProtocolandwouldbeof
greatimportancetotheimplementation ofthatproject.
.Conelusions:AlgeriaisobviouslyanxioustoconcludewiththeCommunitya
frameworkagreementforthemultiannual supplyofagricultural products,
andtodosoveryshortly.TheAlgerianauthorities expressedinthisres­
pecttheirheartfeltwishthattheCommission (andtheCouncil)should
passveryquicklyfromthisexploratorystagetoactualnegotiations,and
theyhopedthat1982couldbethefirstyearofapplication ofaframework
agreement.TheCommunitycanmeetthisrequestwithoutcausinganincrease
inCommunityagricultural production (theproductsandquantitiesrequested
arelessthanpresentsupplies),orexcessiveexpenditure onrefunds,or
adverseeffectsonothercountries'trade(supplementary orsolesourceof
supply).
Itisobvious,however,thattherealsignificance ofsuchaframework
agreementforthesupplyofagricultural productsgoesfarbeyondthetrade
sphere,foritwouldnotonlyprovidesuppliesfordirectconsumption but
alsoensureregularsuppliesofrawmaterialsforthefoodprocessingin­
dustryandofagricultural inputsforadevelopingfarmsector.Theim­
pressionobtainedwasthatAlgeriathusattributesdeeppoliticalsignifi­
cancetoit,thatitcouldhaveeconomicrepercussions onsectorsother
thanagriculture,andthatsuchamutualcommitmentwouldpavethewayfor
anewtypeofrelationsbetweenAlgeriaandtheEECanditsMemberStates
inthecontextofthenewinternational economicorder.

ANNEX I
ESTIMATED REQUIREMENTS FOR ANNUAL IMPORTS OFAGRICULTURAL PRODUCTS
INTO ALGERIA
MILK PRODUCTS
Milk for infant feeding
Flour forinfant feeding'
Evaporated and instant milk
Butter (not more than
3months old )
Cheese forprocessing
Cheese fordirect consumption :
Emmental .
Gouda -type
Butteroil15Q00 -20000 t
2000 - 3000 t
100 000 -120.000 t
25000 -30000 t
7000 -10000 t
3000 -
4000 ~4000 t
7000 t
10000 t
CEREALS
Wheat -flour and meal
Barley andmalt
Ricetobespecified bytheMARA andOIAC
OTHER PRODUCTS
Seed potatoes
Redmeat (mutton ,beef )
Eggs fordirect consumption
Powdered eggs
Animal fat
Eggs forhatching
Day-old chicks
Dairy cows
Cattle onthe hoof
Sugar
Point -of-laypullets
Colza oil
Colza seed10000 t
20000 -30000 t
1000 000 000 unit s
100 - 500 t
40000 t
100 000 000 -150000 000 unit s
1000 000 -2000000 units
2000 head
2000 -3000 head
500 000 t
100 000 -200 000 units
200 000 t
70000 -90000 t

II.MISSION TOCAIRO
8.Thegeneralobjectivewhich,intheviewoftheEgyptianauthorities,
shouldguideanyframeworkagreementconcludedbetweentheEECand
/
Egyptonthemutiannual supplyofagricultural productsissomewhat
differentfromthesituationinthecaseofAlgeria.Itshouldbe
basedonthenationalfoodstrategywhichPresident Sadathasmadethe
cornerstone ofhisinternalpolicyandwhichaimstosatisfythefood
requirements ofapopulation growingattherateofalmost100000per
monthandwhosestandardoflivingisimprovingeveryyear(whencethe
growingneedforhighproteinproductssuchasmeatandmilkproducts).
This"foodstrategypolicy"aspectwasemphasizedforcefullyateachof
themeetingswhichtheCommission representatives hadwiththeministers
responsible forsupply,financialaffairs,economicaffairsandagricul­
tureduringtheirvisittoCairofrom7to9June.Egyptbasesthis
policypartlyontheexpansionofdomesticagricultural production,which
requiresexternalfinancial andtechnicalSupport(bilateral,plurilateral
ormultilateral),andpartlyon"theconclusionofsupplyagreementswith
othercountries.TheCommission representatives wereaccordingly infor­
medoftheneedforanoverallcooperation agreement,thusconfirming
theimpressions formedbyMrCheysson .duringhisofficialvisittoEgypt
from27Octoberto2November 1980.
9.Onthemorespecificquestionofapossiblemultiannual supplyagreement,
whereasinAlgeriatheCommunityisable,itseems,toplaytheleading
part,inEgyptitfindsthatothercountriesarealreadyfulfillingthat
role.Inparticular,theUnitedStatesexportstoEgyptintheregion
oft750millionofagricultural products,thusaccountingforovera
thirdofitsagricultural imports,inadditiontowhichAustralia and
Argentinahaveconcludedlong-termagreementswithEgypt(oncerealsand
beefandvealrespectively).

TheEgyptianministersstressedtheneed,however,todiversifytheir
sourcesofsupplyand,inthiscontext,describedtherolewhichthey
envisagefortheCommunitywhichexportstoEgyptamerei375million
ofagricultural products (i.e.aroundhalftheUnitedStates'exports).
TheministersconsideredthattheCommunitypossessed animmenseadvan­
tageinbeingabletoofferawiderangeofthefoodproductswhich
Egyptrequires.
10.Anothernotabledifference comparedwithAlgeria,atleastatthisstage,
concernsthetermsund^rwhichtransactions arecarriedout;creditsales
seemtohavereachedunprecedented proportions inEgypt.'
Accordingtoinformation providedbytheMinisterforEconomicAffairs,
DrNourElDine(confirmed byaUSDAreport),approximately 70%ofUS
agricultural exportstoEgyptweresoldin1980throughUSGfinancing
programmes PL480andtheCommodityImportProgram.Egyptis,forthe
USA,theprincipalrecipientofPL480andallcerealssold(athird ,of
PL480toEgypt)arecoveredbythisaid(i.e.1.6milliontofwheat
endflourand100000tofmaize).Thetermsoftheagreementarethose
normallyapplicable (downpayment5%,thebalancepayablein31annui­
ties,tenyearsafterthefinaldelivery,interestrate2%risingto3%).
TheCommodityImportProgram(2129millionin1986)coversthegreater
partofotherUSagricultural exportstoEgypt:lard,maize,tobacco,
poultrymeat andlentils.
Australia,whichon5Februaryannouncedthesigningofalong-termagree­
ment(lastingfiveyears,the1977agreementhavinglastedthreeyears)
foranannualsupplyofonemilliont.ofwheat(possibly1.5milliont
intheeventofagoodAustralianharvest),isgrantingEgyptcreditfa­
cilities(forthreeyearswithinterestnegotiableatcommercialratesin
atrade-offwiththepriceformula).Inadditiontothiscontractthere
isafoodaidschemeinvolving20000to25000tofcereals.
France,attheendofApril,grantedEgyptaloanfevailableuntil1Au­
gust1982)toimportFrenchagricultural productsup1toavalueof
FF1500million(i.e.approximatelyi270million).Anearlierloan
ofthesametypewasworthFF930millionbutallowedCairotobuyonly
wheatandflour;thenewagreementofApril1981permitstheadditional
purchaseofsugar,milkproducts,meat,livecattle,eggsandoils.

_
Undoubtedly,othercountriesaresimilarlyinvolvedthoughnottosuch
anobviousextent.Egypthasalwaysattachedmajorimportancetothe
"specialconditionsofsale"aspectandalong-termagreementwiththat
countrycannotignoreit,
11.InrelationtoAlgeria,thefinaldifferenceconcernsthearrangements
formarketingEgyptianimports.Accordingtoinformation providedby
OrFouadHussein,MinisterforFinancialAffairs,athirdoftregc;ds
enteringthecountryareimportedbyprivatecompaniesdirect(under
monetaryauthorizations grantedbytheCentralBank).Thisfreetrade
isincreasingalongwiththeincreaseindemandforgoods(notcovered
byspecialconditionsofsalestipulated byexportingcountries)and
theirgreaterdiversification (linkedtotheimprovingstandardofli­
ving).ThereareinEgyptnorulesrequiringallimportstobecovered
bylong-termagreements,i.e.essentiallybilateralagreements between
governments .Afairlysubstantial shareofEgypt'sEECexportswould
notbecovered,therefore,byaframeworkagreementandprivateimports
wouldcontinue.
12.MrAhmedNouh,theMinisterforSupply,whohadalongmeetingwiththe
Commissionrepresentatives andwasaccompanied byMrDarwish,Deputy
MinisterandChairmanoftheGeneralAuthorityforSupplyCommodities
(GASC),thecentralimportagency,answereddetailedquestionsandargu­
mentsbyconfirmingthattheGovernment wasinterestedinenteringinto
negotiations withaviewtoconcludingbetweentheEECandEgyptan
agreementonthemultilateral supplyofagricultural products.
(i)Thegeneralpatternofsuchaframeworkagreementcould,according
totheEgyptians,bevirtuallyidenticaltothatenvisagedinthe
communication totheCommissionof19February1981(C0M(81)75);
Algeriaisthinkingalongthesamelines,asindicatedabove.
(ii)Withregardtotherangeofproductswhichcouldbecovered,the
MinisterforSupplymentioned :
-cereals:wheat,WesternWhitetypepreferablyrequired(EECstan­
dardwheatisnotfarbehind(1),wheatflour,maize(notcur­
rentlysuppliedbytheEEC,whichisanetimporter);
(1)Thecurrentquestionofa220-30/tpreferencepremiumforthis'typeof
wheatcomparedwithEECwheat-forwhichthereisnojustification inpurely
commercial terms-hasnotbeenclarified. '

*
-milk_PC°ducts :butter,butteroil,milkpowder,certaintypes
ofcheese(gouda,processedcheeses,blue);
-sugar:intheeyesofthepopulationthisproductisthekey
totheGovernment'ssuccessinthemanangement ofitsfoodpo­
licy,thoughaccountshouldbetakenofEgypt'smembershipof
theInternational AgreementandtheprovisionsofthatAgreement
concerningrestrictions onpurchasesfromnon-members (including
theEEC,whichnevertheless soldaround100000tonaveragein
1979and1980);
~vegetableoils:sunflowerorcottonseedoil;
-eggs;
-meat:redmeat(beefandsheepmeat),bone-inorboneless,live
animalsforslaughterorstock-building ,cornedbeef,poultry-
meatandday-oldchicks;
-fish:filletsandpreservedfish(mainlymackerel).
(iii)Noquantitywasmentioned .TheMinisterforSupplyrefusedto
giveanydetailsonthegroundsthatthepricesortermsofpayment
offeredbytheEECwoulddetermine whatEgyptwouldaskforduring
thenegotiations .Heexpressedinterestinreceivingofficialof­
fersfromtheEECregardingquantities induecourse.
(iv)Thequestionofpricesandpriceconditions wasthesubjectofa
longandwide-ranging exchangeofviews.
First,theEgyptianauthorities clearlyhadanerroneousviewof
therespectiveresponsibilities oftheCommission,the'MemberStates
andCommunityoperatorsineachexportoperation;theCommunity as
suchwasseenashavingmorepowerormoreresources (credit)than
itinfacthasatpresent,andcertainoperatorsorMemberStates
hadomittedtopointouttotheiroppositenumbersthattherefund,
whichwasnecessaryforeachoperation,wasaCommunityinstrument .

Secondly,itisclearthatbeingaccustomedtotradingon
thebasisofspecialconditionsofsale,theEgyptiansdo
notwishtocontemplate aframeworkagreementcontaining no
referencetosomesortof"preference",atleastformajor
products.Thetermsofpayment(credit)werediscussed,but
alsoalternative arrangements involvingalinkwithfoodaid.
Solutionstothesequestionsarefeasibleandincludethe
possibility ofaparallelarrangement involvingbothaframe­
workagreementandfoodaid,theincorporation intheframe­
workagreementofnationalcredit forthepurchase
byEgyptoffoodstuffs,orarrangements forfinancingdevelop­
mentprojects.ItappearsthatEgypthasrealizedthata
higherrefund(thepreferential priceidea)isnotnecessarily
reflectedinthepriceschargedbyCommunityoperators.