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COM ( 83) 172 
 
 
 
Vol. 1983/ 0048 
  
 
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Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the opening to the public of the historical archives of the European Econom ic 
Communit y and the European Atom ic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation. 
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februar 1983 über die Freigabe der historischen Archive der Europäischen 
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983, 
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003 
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der genannten Verordnung freigegeben. 
COMMISSION OF THE EUROPEAN COMMUNITIES
C0MC83) 172 final  
Brussels, 13 June 1983
Proposal for a
ÇQUNÇil_regulaxion _(eeç)
on the conclusion of an Agreement in the form of an exchange of  
letters between the European Economic Community and the Republic  
of India on the restoration to the latter of an agreed quantity
of preferential sugar
Proposal for a  
CQUNCIL_REGULATION_(EEC)
on the conclusion of an Agreement in the form of an exchange of  
letters between the European Economic Community and Barbados,  
Belize, the People's Republic of the Congo, Fiji, the Cooperative  
Republic of Guyana, Jamaica, the Republic of Kenya, the Democratic  
Republic of Madagascar, the Republic of Malawi, Mauritius,  
the Republic of Surinam, the Kingdom of Swaziland, the United  
Republic of Tanzania, Trinidad and Tobago, the Republic of Uganda,  
the Republic of Zimbabwe and the Republic of the Ivory Coast  
on the accession of the latter country to Protocol 7 on ACP sugar  
annexed to the Second ACP-EEC Convention
(submitted to the Council by the Commission)
COM(83) 172 final

PREFERENTIAL SUGAR; THE CASES OF INDIA AND THE IVORY COAST
This paper explains the nature of the  
two cases and the background to them and  
makes recommendations to the Council (1)
THE FACTS
India
1. The Agreement between the EEC and the Republic of India on cane sugar  
(hereinafter referred to as "the Agreement") (2) entered into force on  
18 July 1975. It incorporates provisions similar to those contained in  
the ACP Sugar Protocol, and like that Protocol it is of indefinite  
duration.
2. Under the Agreement India's original agreed quantity (i.e. preferential  
sugar quota) was 25 000 tonnes. Acting under the provisions of Article 7(2)  
of the Agreement (3) the Commission decided to reduce this quota to zero  
tonnes with effect from 1 July 1981.
3. Having reached this decision the Commission took the following further con­
siderations into account:
- while Article 7(4) of the Sugar Protocol provides the possibility for  
all the ACP sugar suppliers (even those whose quotas have been reduced  
to zero tonnes) to benefit from permanent reallocations of quotas no  
such possibility is provided for India under the Agreement. This means
that as long as India's quota remains at zero the Agreement has no practical  
effect, despite its indefinite duration;
- the trade relations between the Community and India, of which the Agreement  
is a part, are a sensitive political issue, particularly because of the  
massive imbalance in EEC-India trade in the Community's favour.
(1) all tonnages in thisPaperare expressed in white value
(2) OJ No L 190, 23.7.1975, p.35
(3) Indian failure to supply, and Commission rejection of a claim for  
force majeure

-  2 -
4. Accordingly, in conveying its decision to the Indian authorities, the  
Commission said that it would be prepared to recommend to the Council  
at least the partial restoration of India's original quota with effect  
from 1 July 1983.
5.India is not / contesting the Commission's decision to reject its claim  
for force majeure but it has requested a restoration of its original  
quota with effect from 1 July 1982(1).
The Ivory Coast
6. With his letter dated 22 February 1982 to the President of the EE(
the ambassador of the Ivory Coast forwarded a request by his government  
for accession to the Sugar Protocol. This was accompanied by details of  
the structure, origins and future production programme of the sugar  
industry (2).
7. This request did not refer to a specific preferential quota, but it is  
understood that the Ivory Coast is seeking a quantity of at least
25 000 tonnes. It seems clear that the Ivory Coast has the capacity  
to export such a quantity on a permanent basis.
8. The Joint ACP-EEC Declaration annexed to the Sugar Protocol provides  
that any request from an ACP non-member of that Protocol to participate  
in its provisions "shall be examined" by the Contracting Parties to  
the Protocol.No criteria have been established for such examinations  
nor does the obligation to examine commit the Contracting Parties
in advance to a particular outcome.
9. The ACP members of the Protocol have expressed their collective support  
for the request of the Ivory Coast (3). But they have repeatedly  
emphasized their view that the quota of any new participant country  
should be additional to the total of the quotas originally inscribed
in the Protocol.
(1) see Annex I
(2) Doc.5139/82 of 25.2.1982
(3) Doc.ACP-CEE 2130/82 of 25.2.1982now
Council

- 3 -
*  10. It now remains for the Community, as the importing Contracting Party
to the Sugar Protocol, to examine the request and to decide whether it  
'  can agree that the Ivory Coast should join the Protocol and, if so, with
what quota. It should be noted that the Commission's facultative power  
under Article 7(4) of the Protocol to make permanent re-allocations of  
ACP sugar does not extend to non-members of the Protocol.
Genera l
11. Of the original total quantity of preferential sugar (1.3047 mio tonnes),  
12 000 tonnes are at present unallocated. This quantity has arisen as a  
result of decisions by the Commission on shortfalls.
12. Up to the present the Commission has made permanent re-allocations to Kenya  
( 3 907 tonnes) and to the Congo ( 3 043 tonnes). In addition, the Council  
agreed in 1982 to admit Zimbabwe to the Sugar Protocol with a quota of
25 000 tonnes. All these quantities were found from within the total  
quantity referred to in the preceding paragraph.
13. When considering the accession of Zimbabwe to the Second ACP-EEC Con­
vention the Council decided in an internal declaration on sugar (1) that  
the total quantitative undertakings provided for in the Sugar Protocol  
should not be exceeded. The Commission believes that this decision can  
validly be extended to the total quantity of preferential sugar referred  
to in paragraph 11. The remainder of this paper is therefore devoted to  
the question whether the unallocated quantity of 12 000 tonnes should
now be redistributed and, if so, how.
DISCUSSION
Economic considerations
14. Given its large structural surplus of sugar production over consumption  
it is clear that the Community does not need any preferential sugar for  
the purpose of ensuring adequate supplies for its consumers.
15. It follows that every tonne of preferential sugar which is imported and  
consumed displaces an equivalent quantity of Community sugar which must  
then be disposed of other than on the internal market. In short, the  
displaced sugar has to be exported; and for most of the time this  
requires export refunds which are provided by the Community on the  
budget of the EAGGF.
(1) Doc 10328/80 of 17.10.1980

- 4 -
16. If the 12 000 tonnes are not redistributed, and if the world price were to  
remain at or about its present levels, then the annual rate of savings to  
the budget would be of the order of 4.5 million ECU. It should be noted,  
however, that a redistribution would not of itself require the existing budget  
provision to be increased ( see paragraph 31 below).
17. But from the point of view of India and the Ivory Coast the economic consi­
derations involved in redistributions assume an entirely different importance.  
For these countries preferential sugar confers two highly desirable advantages:  
a guaranteed price which for most of the time is significantly higher than
the world price (1) and, equally important, a guaranteed market outlet.
•
18. This certainty of an income which can be calculated in advance helps the  
countries concerned in their forward economic planning. In contrast, their  
exports to the world market are at the mercy of the inherent instability  
of that market.
19.. in this connection it is worth noting that the current world price levels
are well below the production costs of even the large and efficient producers,  
such as Australia and Thailand. For the smaller developing country exporters  
the present world prie® are little short of disastrous, and in these circum­
stances preferential sugar becomes more than ever attractive.
(1) In 1982/83 the guaranteed price for raw preferential sugar, is 426.3 ECU/tonne  
compared with a world price (February 1983) of about 170 ECU/tonne.

- 5 -
Political considerations
20. In the case of India reference has been made in paragraph 3 to the  
imbalance in EEC-India trade. This situation has created political  
difficulties, and the Indian authorities have made it clear that in  
their view the willingness of the Community to take steps to redress  
the situation must include a readiness to restore preferential access  
for Indian sugar.
21 .  In the case of the Ivory Coast it is appropriate to recall the origins  
of the Sugar Protocol which are expressed in the following extract from  
Protocol 22 to the 1972 Act of Accession:
" The Community will have as its firm purpose the safeguarding  
of the interests of all the countries referred to in this  
Protocol (1) whose economies depend to a considerable extent  
on the export of primary products, and particularly of sugar.
The question of sugar will be settled within this framework,  
bearing in mind with regard to exports of sugar the importance  
of this product for the economies of several of these countries  
and of the Commonwealth countries in particular.".
22. In the view of the Commission,the Community undertaking quoted in the  
preceding paragraph (which found its practical expression in the form  
of the Sugar Protocol ) was not intended to apply to countries which de­
veloped a sugar-exporting capacity subsequent to the entry into force  
of the Sugar Protocol.
23. Nevertheless, this situation does not preclude the Community from examining  
the Ivory Coast request on its own merits in the circumstances which have  
developed since the Sugar Protocol entered into force.
24. It is clear from the documents accompanying the Ivory Coast request that  
the establishment of the sugar industry in that country and its rapid  
growth since 1978 have depended largely on finance, materials and  
expertise provided from industrial sources within the Community. In some  
cases guarantees were provided by the Member States concerned.
(1) i.e. the Associated African and Malagasy States and the independent  
developing Commonwealth countries listed in Annex VI to the Act

-  6 -
25. It can therefore reasonably be argued that the Community should be prepared  
to help the Ivory Coast to realise some economic benefit from its newly-  
established sugar industry and thereby to assist that country in its  
efforts to diversify its.economy.
RECOMMENDATIONS
26 .In the light of what has been said in the preceding paragraphs the Commission
believes that the balance of the arguments supports the view that the  
12 000 tonnes referred to in paragraph 11 should now be redistributed bet­
ween India and the' Ivory Coast.
27 . In whatever way the quantity is divided there is bound to be an element of
arbitrariness. But it seems reasonable to take the following factors into  
account:
- if the Ivory Coast is admitted to the Sugar Protocol it will become  
eligible not only for any'temporary re-allocations under Article 7(2)
of the Protocol but also for/p^rmanent reallocations the Commission  
may decide to make in the future. In other words the Ivory Coast
would hawe the possibility of increasing its original preferential  
quota, but India has no such p o s s i b i l i t y ;
- even if the whole of the available quantity were restored to India  
the latter's new quota would be only 48% of the original quota where­
as Kenya and the Congo have received re-allocations bringing their  
new quotas up to 80% of the originals.
2&. If 10 000 tonnes were restored to India this would represent 40% of the  
original quota. Such a quantity represents a commercially feasible ■ -
cargo for a single vessel.
29- This would leave 2 000 tonnes for the Ivory Coast. This is much less than  
the Ivory Coast is seeking but it would at least allow that country to
become a member of the Sugar Protocol and to share in its benefits in  
the future.
30· Accordingly, the Commission recommends the Council:
(i) to agree to restore to India 10.000 tonnes of preferential  
sugar with effect from 1 July 1983;

- 7 -
(ii) to agree that the Ivory Coast should be included in Article 3(1)  
of the Sugar Protocol with effect from 1 July 1983 with an agreed  
quantity of 2 000 tonnes;
(iii) to approve the attached draft Regulation on the conclusion of an  
Agreement in the form of an exchange of letters between the  
Community and India;
(iv) to approve the attached draft Regulation on the conclusion of an  
Agreement in the form of an exchange of letters between the  
Community, the ACP States concerned and the Ivory Coast.
FINANCIAL IMPLICATIONS
31. The proposals set out above would be implemented within the framework  
of the management of the common organization of the sugar market and  
would not, therefore, give rise to additional expenditure.
ANNEXES
I. Copy of Note Verbale of 20.9.1982 from India to the  
Commission.
II. Draft of a Council Regulation covering an exchange of letters with India.
III. Draft of a Council Regulation covering an exchange of letters  
with the ACP states concerned.

Dir. gen. I ! G on. Dir. 1
N«> o O i
Oat· 23-9-1582
Aft
No.  ERU/ 20’ t/ a/ 15/8^
noti:  ye; ;  maleANNEX I
EMBASSY OF INDIA
CHAUSSEE O E VUUROAT. 217 .  
10M JMUXELIES 
TEL. M O M *
September 20, 19,c0.
The Mission of India to the European Economic Community  
presents its compliiien ts to the Directorate General for External.  
Relations of the Commission of the European Communities and has  
the honour to refer to tho Agreement on the; supply of su;;ar byi
India to the EEC and (.he correspondence on this subject res Lin.,  
with letter No.  oG( 82)d/3933 of 17 March, 19^2, from Ilis Exc el .  * t 
Mr. rtilhelm Ilaferkamp, Vice—President to the Ambassador of Ii···'....
For diverse reasons, India lias lost the benefit of del iv rir  
the agreed quota for 2 years (1920—Si and 1  981 ■ “7 2). Given 1 ' > 
fact that the adverse balance of trade between India and the  
Community is increasing at an alarming rate, a fact recognised  
as potentially harmful by both sides, and given India's need  
to increase her exx>ort earnings from all. sources, the Mission of  
India has the honour to request th·. Commission of the European  
Communities for a restoration of India's su^ar quota under  
the Agreement referred to above with effect from the 1982/23 
delivery period. The Mission would appreciate ari early positive  
response from the Commission.
The Mission of India to the Eurojiean Economic· Coi muni iy 
avails itself of this opportunity to renew to the Directorate  
Gen..-ml for External Relations of the Commission of the Europr an  
C> .mini ties the assurances of its highest consideration.
The Directorate General for  
External Relations, Commission of the  
Eurox>eari Communities, Rue de la Loi 200, 
10*19 Driisaels,
a

ANNEX II
CO UNCIL REG U LA TIO N  (EEC)
on the conclusion of an Agreement in the form of an exchange of  
letters between the European Economic Community and the Republic  
of India on the restoration to the latter of an agreed quantity
of preferential sugar
T H E  COUNCIL O F  T H E  E U R O P E A N  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 under the Agreement between the European Economic Community and the  
Republic of India on cane sugar (1), which entered into force on 18 July 1975,  
India had an original agreed quantity of 25 000 metric tons (white value) of  
preferential sugar; whereas with effect from 1  July 1981 that quantity w a s  
reduced to zero by the Commission of the European Communities acting under  
the provisions of Article 7(2) of the said Agreement;
Whereas the said Agreement is an integral part of the growing EEC-India trade  
relations; whereas there is an imbalance in EEC-India trade in favour of the  
Community; whereas this situation should as far as possible be redressed to  
the benefit of India;
Whereas it  is therefore appropriate for the Community to agree to restore an  
agreed quantity of preferential sugar to India; whereas such a  restoration is  
without prejudice to the valid ity  of the aforesaid action by the Commission,
H A S  A D O P T E D  THIS REGULATION:
A rticle 1
A n  agreement in the form of an exchange of letters between the European  
Community and the Republic of India on the restoration to the latter of an  
agreed quantity of preferential sugar is hereby approved on behalf of the  
Community.
The text of the Agreement is attached to this Regulation.
(1) 0J N o  L 190, 23.7.1975, p.35

Article 2
The President of the Council is hereby authorized to designate the person  
empowered to sign the Agreement referred to in A rticle 1  in order to bind  
the Community.
A rticle 3
This Regulation shall enter into force on the day following its  publication  
in the O fficial Journal of the European Communities.
This Regulation shall be binding in its  entirety and d irectly applicable  
in a ll Mem ber States.
Done at For the Council
The President

~ A * >
AGREEMENT
in the form of an exchange of letters between the European Economic  
Community and the Republic of India on the restoration to the latter  
of an agreed quantity of preferential sugar
LETTER N o  1
Sir,
•T h e  European Economic Community and the Republic of India  
have agreed on the following:
° The agreed quantity referred to in Article 3(1) of the Agreement between  
the European Economic Community and the Republic of India on cane sugar  
is hereby fixed at 10 000 metric tons with effect from 1  July 1983.
The Community has noted India's request to have its original agreed  
quantity restored in fu ll and it w ill take this into account if and  
when a further redistribution of preferential sugar is contemplated.
I should be obliged if  you would acknowledge receipt of this letter and  
confirm that this lette r and your reply constitute an Agreement between  
the Government of India and the Community. v
Please accept. S ir, the assurance of m y  highest consideration.
O n  behalf of the Council  
of the European Communities.
LETTER N o  2
Sir,
I have the honour to acknowledge receipt of your letter of today's  
date which reads as follows :

-4  -
y l A .
"The European Economic Community and the Republic of India have agreed  
on the following :
The agreed quantity referred to in Article 3(1) of the Agreement between  
the European Economic Community and the Republic of India on cane  
sugar is hereby fixed at 10 000 metric tons with effect from 1  July 1983.
The Community has noted India's request to have its original agreed  
quantity restored in full and it will take this into account if and  
when a further redistribution of preferential sugar is contemplated.
I should be obliged if  you would acknowledge receipt of this le tte r and  
confirm that this le tte r and your reply constitute an Agreement between  
the Government of India and the Community.".
I have the honour to confirm the agreement of the Government of India  
with the foregoing.
Please accept, S ir, the assurance of m y  highest consideration.
For the Government of India.

ANNEX III
CO UNCIL R EG U LA TIO N  (EEC)
on the conclusion of an Agreement in the form of an exchange of letters  
between the European Economic Community and Barbados, Belize, the People's  
Republic of the Congo, F iji, the Cooperative Republic of Guyana, Jamaica,  
the Republic of Kenya, the Democratic Republic of Madagascar, the Republic  
of Malawi, Mauritius, the Republic of Surinam, the Kingdom of Swaziland,  
the United Republic of Tanzania, Trinidad and Tobago, the Republic of  
Uganda, the Republic of Zimbabwe and the Republic of the Ivory Coast on  
the accession of the latter country to Protocol 7 on A C P  sugar annexed  
to the Second ACP-EEC Convention
TH E  COUNCIL O F  T H E  E U R O P E A N  COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,  
and in particular A rticle 113 thereof,
Having regard to the proposal from the Commission,
Whereas the Joint Declaration annexed to Protocol 7 on A C P  sugar to the
(1)Second ACP-EEC Convention provides that any request from an A C P  State  
Contracting Party to the Convention not specifically referred to in that  
Protocol to participate in its provisions shall be examined;
Whereas the Republic of the Ivory Coast is an A C P  State Contracting Party  
to the said Convention ; whereas the Ivory Coast has requested to p a rtic i­
pate in the provisions of the said Protocol;
Whereas the A C P  States concerned, in a  letter of 25 February 1982, have  
signified their assent to the accession of the Ivory Coast to the said  
Protocol;
Whereas it is appropriate to approve an Agreement in the form of an ex­
change of letters between the European Economic Community, the States  
referred to in the said Protocol and the Republic of the Ivory Coast on  
the accession of the la tte r country to the said Protocol,
(1) O.J. No. L 347, 22.12.1980, p. 2

<23
H A S  A D O P T E D  THIS REGULATION:
A rticle 1
A n  Agreement in the form of an exchange of letters between the European  
Economic Community and Barbados, Belize, the People's Republic of the Congo,  
F iji, the Cooperative Republic of Guyana, Jamaica, the Republic of Kenya,  
the Democratic Republic of Madagascar, the Republic of Malawi, Mauritius,  
the Republic of Surinam, the Kingdom of Swaziland, the United Republic  
of Tanzania, Trinidad and Tobago, the Republic of Uganda, the Republic
of Zimbabwe,· and the .Republic of the Ivory Coast on the accession of the  
la tte r country to Protocol 7 on A C P  sugar
annexed to the Second ACP-EEC Convention is hereby approved on behalf of the  
Community.
The text of the Agreement is attached to this Regulation.
A rticle 2
The President of the Council is hereby authorized to designate the pel—  
son empowered to sign the Agreement referred to in A rticle 1  in order to  
bind the Community.
A rticle 3
\This Regulation shall enter into force on the day foi lowing its  publi-  
,fti»t;von':vVT':.ihe. :0.f.fic-.i-ail f;-J-o.ucna;i-:vO f.4'he:.,.£.uropean Communities.
This Regulationentirety.,and  d irectly applicajble.  
in .alt Mem ber States. .  v - c  '
Done at. .»..«y, For the Council
The. President

4%
AGREEMENT
in the form of an exchange of letters between the European Econom ic  
Community and Barbados, Belize, the People's Republic of the Congo, F iji, the  
Cooperative Republic of Guyana, Jamaica, the Republic of Kenya, the  
Democratic Republic of Madagascar, the Republic of Malawi, Mauritius, the  
Republic of Surinam, the Kingdom of Swaziland, the United Republic of  
Tanzania, Trinidad and Tobago, the Republic of Ugandar the Republic of
Zimbabwe/ and the'Republic of the Ivory Coast on the accession of the latter  
Country to Protocol 7 on A C P  sugar annexed to the Second AC P-EEC  Convention.
Letter No. 1
Si r.
The A C P  States referred to in Protocol 7 on A C P  
sugar annexed to the Second ACP-EEC Convention, the Republic of the  
Ivory Coast and the European Economic Community have agreed on the  
following.
The Republic of the Ivory Coast is hereby included in Article 3(1) of the  
said Protocol with effect from 1  July 1983 with an agreed quantity of
2. 000 tonnes ( white value).
I should be obliged if  you would acknowledge receipt of this letter and  
confirm that this lette r and your reply constitute an Agreement between  
the Governments of the abovementioned A C P  States and the Community.
Please accept. S ir, the assurance of m y  highest consideration.
On behalf of the Council  
of the European Communities
Letter No. 2
Sir,
I have the honour to acknowledge receipt of your letter of today's date  
which reads as follows :

* 5
" The A C P  States referred to in Protocol 7  
on A C P  sugar annexed to the Second ACP-EEC Convention, the  
Republic of the Ivory Coast and the European Economic Community  
have agreed on the following.
The Republic of the Ivory Coast is hereby included in A rticle 3(1)  
of the said Protocol with effect from 1  July 1983 with an agreed  
quantity of 2 000 tonnes (white value).
I should be obliged if  you would acknowledge receipt of this letter  
and confirm that this lette r and your reply constitute an Agreement  
between the Governments of the abovementioned A C P  States and the  
Community.".
I have the honour to confirm the agreement of the Governments of the  
A C P  States referred to in this le tte r with the foregoing.
Please accept, S ir, the assurance of m y  highest consideration.
For the Governments