Proposal for a COUNCIL DECISION on the conclusion of a Protocol adjusting the trade aspects of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, to take account of the outcome of negotiations between the parties on new mutual agricultural concessions

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. On 30 March 1999, the Council authorised the Commission to open negotiations for additional mutual agricultural concessions in the framework of the Europe Agreements between the European Community and the associated Central and Eastern European Countries.

2. The negotiations with the Republic of Hungary, which were undertaken in the overall context of the accession process, were based on Article 20(5) of the Europe Agreement. This article provides that the Community and Hungary shall examine in the Association Council, product by product and on an orderly and reciprocal basis, the possibility of granting each other further concessions, taking account of the volume of trade in agricultural products between them, of their particular sensitivity, of the rules of the common agricultural policy of the Community and of the role of agriculture in Hungary's economy.

3. According to the Council directives, the negotiations should lead to a fair equilibrium, both in terms of exports and imports, between the interests of the European Community and its Member States and those of the associated countries. On this basis, negotiations were undertaken and concluded between the parties on 25 April 2002.

4. The results of the negotiations between the Commission and Hungary on additional agricultural concessions involve immediate, full and reciprocal liberalisation of trade in some agricultural products. Agreement was also reached on opening new tariff quotas in certain sectors and increasing certain previously existing quotas.

5. The results of the negotiations have so far been implemented by the respective parties in the form of autonomous measures. On the Community side, the autonomous measures were implemented by Council Regulation (EC) No 1408/2002 of 29 July 2002. Similar legislative measures were adopted and implemented by the Republic of Hungary.

6. The present Protocol on new mutual agricultural concessions would replace the aforementioned autonomous and transitional measures at the date of its entry into force.

2002/0291 (COD)

Proposal for a COUNCIL DECISION on the conclusion of a Protocol adjusting the trade aspects of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, to take account of the outcome of negotiations between the parties on new mutual agricultural concessions

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 133, in conjunction with Article 300(2), subparagraph 1, first sentence thereof,

Having regard to the proposal from the Commission [1],

[1] OJ C , , p. .

Whereas:

(1) The Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part [2], provides for certain reciprocal trade concessions for certain agricultural products.

[2] OJ L 347, 31.12.1993, p.2

(2) Article 20(5) of the Europe Agreement provides that the Community and Hungary shall examine product by product and on an orderly and reciprocal basis the possibilities of granting each other further concessions.

(3) The first improvements to the preferential arrangements of the Europe Agreement with Hungary were provided for in the Protocol adjusting trade aspects of the Europe Agreement to take account of the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the European Union and the outcome of the Uruguay Round negotiations on agriculture, including improvements to the existing preferential arrangements, approved by Decision 1999/67/EC [3].

[3] OJ L 28, 2.2.1999, p.1

(4) Improvements to the preferential arrangements were also provided for as a result of negotiations to liberalise agricultural trade concluded in 2000. On the Community side, these were implemented from 1 July 2000 by Regulation (EC) No 1727/2000 establishing certain concessions in the form of Community tariff quotas for certain agricultural products and providing for an adjustment, as an autonomous and transitional measure, of certain agricultural concessions provided for in the Europe Agreement with Hungary [4]. This second adjustment of the preferential arrangements has not yet been incorporated in the Europe Agreement in the form of an Additional Protocol.

[4] OJ L 198, 4.8.2000, p.6

(5) Negotiations for further improvements to the preferential arrangements of the Europe Agreement with Hungary were concluded on 25 April 2002. The results of the negotiations have so far been implemented by the respective parties in the form of autonomous measures. On the Community side, the autonomous measures were implemented by Council Regulation (EC) No 1408/2002 of 29 July 2002 [5]. Similar legislative measures were adopted and implemented by the Republic of Hungary.

[5] OJ L 205, 2.8.2002, p.9

(6) The new Additional Protocol to the Europe Agreement adjusting the trade aspects of the Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part (hereinafter referred to as "the Protocol") should be approved with a view to consolidating all concessions in agricultural trade between the two sides, including the results of the negotiations concluded in 2000 and 2002.

(7) Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code [6] has codified the management rules for tariff quotas designed to be used following the chronological order of dates of customs declarations. Certain tariff quotas under this Decision should therefore be administered in accordance with those rules.

[6] OJ L 253, 11.10.1993, p. 1. Regulation last amended by Regulation (EC) No 444/2002 (OJ L 68, 12.3.2002 p. 11).

(8) Further measures necessary for the implementation of this Decision should be adopted in accordance with the management committee procedure of Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission [7].

[7] OJ L 184, 17.7.1999, p. 23.

(9) As a result of the aforementioned negotiations, Regulation (EC) No 1408/2002 has effectively lost its substance and should therefore be repealed.

HAS DECIDED AS FOLLOWS:

Article 1

The attached Protocol adjusting the trade aspects of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, to take account of the outcome of negotiations between the parties on new mutual agricultural concessions, is hereby approved on behalf of the Community.

Article 2

The President of the Council is authorised to designate the person empowered to sign the Protocol on behalf of the Community and make the notification of approval provided for in Article 4 of the Protocol.

Article 3

Upon this Decision taking effect, the arrangements provided for in the Annexes of the Protocol attached to this Decision shall replace those referred to in Annexes VIII and IX as referred to in Article 20(2) and 20(3), as amended, of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part.

The Commission shall adopt rules for the application of the Protocol in accordance with the procedure referred to in Article 5.

Article 4

The order numbers as attributed to the tariff quotas in the Annex to this Decision may be changed by the Commission in accordance with the procedure referred to in Article 5. Tariff quotas with an order number above 09.5100 shall be administered by the Commission in accordance with Articles 308a, 308b and 308c of Regulation (EEC) No 2454/93.

Article 5

The Commission shall be assisted by the Committee for Cereals instituted by Article 23 of Regulation (EEC) No 1766/92 [8] or, where appropriate, by the committee instituted by the relevant provisions of the other Regulations on the common organisation of agricultural markets.

[8] OJ L 181, 1.7.1992, p. 21.

Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply.

The period provided for in Article 4(3) of Decision 1999/468/EC shall be one month.

Article 6

Regulation (EC) No 1408/2002 is repealed from the entry into force of the Protocol.

Done at Brussels,

For the Council

The President

ANNEX Order numbers for EU tariff quotas for products originating in Hungary (as referred to in Article 4)

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PROTOCOL

adjusting the trade aspects of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, to take account of the outcome of negotiations between the parties on new mutual agricultural concessions

THE EUROPEAN COMMUNITY, hereinafter referred to as «the Community»,

of the one part, and

THE REPUBLIC OF HUNGARY,

of the other part,

WHEREAS:

(1) The Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary of the other part (hereinafter referred to as "the Europe Agreement") was signed in Brussels on 16 December 1991 and entered into force on 1 February 1994.

(2) Article 20(5) of the Europe Agreement provides that the Community and the Republic of Hungary shall examine in the Association Council, product by product and on an orderly and reciprocal basis, the possibility of granting each other additional agricultural concessions. On this basis negotiations have been undertaken and were concluded between the parties.

(3) Improvements to the preferential agricultural regime of the Europe Agreement were for the first time provided for in the Protocol adjusting trade aspects of the Europe Agreement [9] to take account of the last enlargement of the Community and the outcome of the GATT Uruguay Round.

[9] OJ L 28, 2.2.1999, p 1.

(4) Two further rounds of negotiations for improved agricultural trade concessions were concluded on 14 April 2000 and 25 April 2002.

(5) From the one side, the Council decided, by virtue of Regulation (EC) No 1408/2002 of 29 July 2002 [10], to apply on a provisional basis the European Community concessions resulting from the 2000 and the 2002 rounds of negotiations and from the other side the Government of the Republic of Hungary took similar legislative provisions to apply the equivalent Hungarian concessions by virtue of Joint Ministerial Decrees No. 1/2000, 16/2002 and 17/2002 of the Minister of Foreign Affairs and the Minister of Finance of Hungary [11].

[10] OJ L 205, 2.8.2002, p. 9.

[11] Hungarian Official Journal (MK) No. 81, 4.8.2000, p.5086 and Hungarian Official Journal (MK) No. 122., 20.9.2002, p. 6613 and 6616.

(6) The above mentioned concessions will be replaced on the date of entry into force of this Protocol by the concessions provided for herein,

HAVE AGREED AS FOLLOWS:

Article 1

The arrangements for import into the Community applicable to certain agricultural products originating in the Republic of Hungary as set out in Annex A(a) and A(b) and the arrangements for import into the Republic of Hungary applicable to certain agricultural products originating in the Community as set out in Annex B(a) and B(b) to this Protocol shall replace those set out in Annexes VIII and IX as referred to in Article 20(2) and 20(3), as amended, of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part.

Article 2

The Annexes to this Protocol shall form an integral part thereof. This Protocol shall form an integral part of the Europe Agreement.

Article 3

This Protocol shall be approved by the Community and the Republic of Hungary in accordance with their own procedures. The Contracting Parties shall take the necessary measures to implement this Protocol.

Article 4

This Protocol shall enter into force on the first day of the first month following the Contracting Parties' notification of the accomplishment of the corresponding procedures according to Article 3.

Quantities of goods subject to tariff quotas and released for free circulation as from 1 July 2002 under the concessions provided for in Annex A(b) to Regulation (EC) No 1408/2002 3 and Annex I of Joint Ministerial Decree No. 17/2002 of the Minister of Foreign Affairs and the Minister of Finance of Hungary shall be fully counted against the quantities provided for Annex A(b) and B(b) to the attached Protocol, except for quantities for which import licences were issued before 1 July 2002.

Article 5

This Protocol shall be drawn up in duplicate in the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish, Swedish and Hungarian languages, each of these texts being equally authentic.

Done at Brussels,

For the European Community For the Government of the Republic of Hungary

ANNEX A (a)

Custom duties on imports applicable in the Community to products originating in Hungary and listed below shall be abolished - CN codes (1)

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(1) As defined in Commission Regulation (EC) No 1832/2002 of 1 August 2002, amending Annex 1 to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 290, 28.10.2002, p. 1).

ANNEX A (b)

Imports into the Community of the following products originating in Hungary shall be subject to the concessions set out below

(MFN= Most Favoured Nation duty)

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(1) Notwithstanding the rules for the interpretation of the Combined nomenclature, the wording of the description of the products is to be considered as having no more than indicative value, the preferential scheme being determined, within the context of this Annex, by the coverage of the CN code. Where ex CN codes are indicated, the preferential scheme is to be determined by application to the CN code and corresponding description taken together.

(2) In cases where a MFN minimum duty exits, the applicable minimum duty is equal to the MFN minimum duty multiplied by the percentage indicated in this column.

(3) The quota for this product is opened for Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and the Slovak Republic. In case imports into the Community of live bovine animals may exceed 500 000 heads for any given year, the Community may take the management measures to protect its market, not withstanding any other rights given under the Agreement.

(4) The quota for this product is opened for Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and the Slovak Republic.

(5) This concession is only applicable to products non-benefiting from any kind of export subsidies.

(6) Excluding tenderloin presented alone.

(7) Subject to minimum import price arrangements contained in the Appendix to the present Annex.

(8) The reduction applies only to the ad valorem part of the duty.

(9) For these CN-codes, the following concessions - applicable for apples imported within as well as outside the tariff quota -should be applied:

- five additional stages (10%, 12%, 14%, 16% and 18%) are herewith introduced for the period 1 January to 14 February, which have to be used before the application of the full specific duty as mentioned in the Combined Nomenclature,

- three additional stages (14%, 16% and 18%) are herewith introduced for the period 15 February to 31 March, which have to be used before the application of the full specific duty as mentioned in the Combined Nomenclature,

- two additional stages (16% and 18%) are herewith introduced for the period 1 April to 15 July, which have to be used before the application of the full specific duty as mentioned in the Combined Nomenclature,

- five additional stages (10%, 12%, 14%, 16% and 18%) are herewith introduced for the period 16 July to 31 December, which have to be used before the application of the full specific duty as mentioned in the Combined Nomenclature.

(10) In addition to the reduction of the ad valorem part of the duty, five additional stages (10%, 12%, 14%, 16% and 18%) are herewith introduced which have to be used before the application of the full specific duty as mentioned in the Combined Nomenclature.

(11) In addition to the reduction of the ad valorem part of the duty, three additional stages (10%, 12% and 14%) are herewith introduced which have to be used before the application of the full specific duty as mentioned in the Combined Nomenclature.

(12) Entry under this subheading is subject to conditions laid down in the relevant Community provisions (see Articles 291 to 300 of Commission Regulation (EEC) No 2454/93 (OJ L 253, 11.10.1993, p. 71) and subsequent amendments).

ANNEX TO ANNEX A (b) Minimum import price arrangement for certain soft fruit for processing

The importation into the Community of the products listed in this Appendix originating in Hungary will be subject to the conditions described in this Appendix.

1. Minimum import prices are fixed for the following products:

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2. The minimum import prices, as set out in point 1, will be respected on a consignment by consignment basis. In the case of a customs declaration value being lower than the minimum import price, a countervailing duty will be charged equal to the difference between the minimum import price and the customs declaration value.

3. If the import prices of a given product covered by this Appendix show a trend suggesting that the prices could go below the level of the minimum import prices in the immediate future, the European Commission will inform the Hungarian authorities in order to enable them to correct the situation.

4. At the request of either the Community or Hungary, the Association Committee shall examine the functioning of the system or the revision of the level of the minimum import prices. If appropriate, the Association Committee shall take the necessary decisions.

5. To encourage and promote the development of trade and for the mutual benefit of all parties concerned, a consultation meeting may be organised three months before the beginning of each marketing year in the European Community. This consultation meeting will take place between the European Commission and the interested European producers' organisations for the products concerned, on the one part and the authorities', producers' and exporters' organisations of all the associated exporting countries, on the other part.

During this consultation meeting, the market situation for soft fruit including, in particular, forecasts for production, stock situation, price evolution and possible market development, as well as possibilities to adapt supply to demand, will be discussed.

ANNEX B (a) Custom duties on imports applicable in Hungary to products originating in the Community and listed below shall be abolished - Hungarian tariff codes 2002 [12]

[12] Hungarian Law No.

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ANNEX B (b)

Imports into Hungary of the following products originating in the Community

shall be subject to the concessions set out below

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(1) The wording of the description of the products is to be considered as having no more than indicative value, the preferential scheme being determined, within the context of this Annnex, by the coverage of the code. Where ex codes are indicated, the preferential scheme is to be determined by application to the code and corresponding description taken together.

(2) This concession is only applicable to products non-benefiting from any kind of export subsidies.