ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)546
Vol.1979/0188

Disclaimer
Conformément aurèglement (CEE, Euratom) n°354/83 duConseil du1erfévrier 1983
concernant l'ouverture aupublic desarchives historiques delaCommunauté économique
européenne etdelaCommunauté européenne del'énergie atomique (JOL43du15.2.1983,
p.1),telquemodifié par lerèglement (CE, Euratom) n°1700/2003 du22septembre 2003
(JOL243du27.9.2003, p.1),cedossier estouvert aupublic. Lecaséchéant, lesdocuments
classifiés présents dans cedossier ontétédéclassifiés conformément àl'article 5dudit
règlement.
Inaccordance with Council Regulation (EEC, Euratom) No354/83 of1February 1983
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,
27.9.2003, p.1),this fileisopen tothepublic. Where necessary, classified documents inthis
filehave been declassified inconformity with Article 5oftheaforementioned regulation.
InÜbereinstimmung mitderVerordnung (EWG, Euratom) Nr.354/83 desRates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft undderEuropäischen Atomgemeinschaft (ABI. L43vom 15.2.1983,
S.1),geändert durch dieVerordnung (EG, Euratom) Nr.1700/2003 vom 22.September 2003
(ABI. L243vom 27.9.2003, S.1),istdiese Datei derÖffentlichkeit zugänglich. Soweit
erforderlich, wurden dieVerschlusssachen indieser Datei inÜbereinstimmung mitArtikel 5
dergenannten Verordnung freigegeben.

COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)546 final
Brussels .19th October 1979
RECOMMENDATION FOR ACOUNCIL DECISION
AUTHORIZING THE COMMISSION TOOPEN NEGOTIATIONS
WITH INDIA WITH AVIEW TOTHE CONCLUSION OF
ANAGREEMENT ONTRADE INCOIR PRODUCTS
(presented bytheCommission totheCouncil ) (presented bythefax - • ." .
jc*. v-s •-<>
Γ'"; ^ 9
V-VV-^\ w Co*V ;/
C0M(79 )546 final

EXPLANATORY MEMORANDUM v
1.TheAgreementinforcebetweentheCommunityandIndiaontradeincoir
productsexpireson31December1979.ThisAgreementconstitutesforIndia-
theCommunity'smainsupplier-the"specialarrangements "whichwereprovided
forundertheCommunity'sofferongeneralisedtariffpreferences inorderto
enablethedevelopingcountriesconcernedtotakeadvantage'ofthepreferences
1fortheproductsinquestion.
' " *
ThemainfeaturesoftheAgreementareasfollows:
theunilateralgrantingbytheCommunityinthecontextoftheGSPof
suspensionoftariffduties,whichhavebeenzero-ratedsince1January1978;
confirmation ofthecontinuation ofthearrangements ensuringalmosttotal
freedomfromcontrolsonimportsintotheCommunity (animportquotaremains
inoneMemberStateinrespectofcoirmatsandmattings;CCTheading .
No.ex58.02);
assurances fromIndiaasregardsthesupplyundernon-discriminatory conditions
oftherawmaterialsnecessaryfor.theCommunitycoirproductsindustry;
thesettingupofaJointCooperation Committeewiththetask,interalia,
ofinvestigating opportunities andmakingsuggestions withaviewtocooperation
inthefieldsofresearchanddevelopment asregardstheproductionanduses
ofcoirproducts.
<*
SnLankaalsoreceivespreferencesforcoirproductsbut,inviewofthelow
levelofexportsfromthiscountry,thespecialarrangements tooktheformofa
singleexchangeoflettersinwhichSriLankaundertooktoenterintonegotiations
withtheCommunityifnecessary.
2ItshouldbepointedoutthattheCommunityagreedthatitsMTNoffershould
include–theconversionofthisquotaintoavoluntaryrestraintmeasure,theim­
plementation oftheofferbeingleftfordiscussionindetailinthenegotiations
(seepointIII(b)below). *

-2-
i
II.AstheAgreementexpireson31December1979/theImportarrangements to
>_•applytotheseproductsfrom1January1980shouldbeestablished.TheCommission j,
considersthatitwouldbeappropriate totrytoconcludeanewagreementofsix \
years'durationwithitsIndianpartner,whereby:
-aquantitative importprotection measurewouldbemaintainedfor.aspecifiedperiod
(A.year^intheregionoftheCommunity(France)whichretainsaquota,inorderto
afforditsindustrythetimeneededtoadjusttotheliberalization ofimports.
Thisshouldbe.achieved,withIndia'sagreement,byinstituting,for*y*ars,asystemof
voluntaryrestraintofexportsunderwhichreasonablylimitedincreaseswouldbe';
!
allowedintheexportsconcerned,and,inthelasttwoyearsof-theAgreement,res-;
trictions oncoirproductswouldbetotallysuspended. ,
Thisconversion ofthequotaintoavoluntaryrestraintarrangement would
constitute theimplementation oftheMTNoffer.
.-thesuspensionofdutieswhichasbeeninforceintheCommunityinthecontext
oftheGSPsince1January1978wouldbemaintained;
-formalassurances wouldbeobtainedfromIndiaonthesupplyofcoiryarntothe
-Communityindustryundernormalpriceconditions . j
III.Thereareanumberofgroundsforthispolicy: '
a)theCommunityofferongeneralisedtariffpreferences stipulatedinrespectof
coirproductsthattheelimination ofcustomsdutieswouldalsobeincludedwhere
\specialarrangements hadbeenmadewiththeexportingdevelopingcountries.
Asthiselimination hasbeenputintoeffect,itshouldbemaintained . i
b)Inthecontextofthemultilateral tradenegotiations ,theCommunity madean
offertoIndiaonquantitative restrictions oncoirproductstotheeffectthat
theimportquotaapplyinginFranceforcoirmatsandmattingshouldbeconverted j
-• !intoanarrangement forvoluntaryrestraintofexportsandthattheceilingshould
beadministered byIndia.Whenthemultilateraltradenegotiations ended j
andnocommunication wasreceivedfromIndia,theCommunitysentthatcountry ]
aletterstating:
• .i.
i)thattheCommunityofferstillstood,and ;
ii)thatthedetailsandimplementation ofthisofferwouldbe.
discussedagainonabilateralbasisintheforthcoming negotiations .
c)Theproduction andexportofcoirmanufacture isofprimeimportancetothe
economyoftheStateofKeralainsoutherniidia,whereapproximately 1million
peoplecfependonthistradefortheirlivelihood .Onseveraloccasionsat
meetingsoftheJointCommittees setupundertheCooperation Agreementbetween ■
IndiaandtheCommunity,theIndianauthorities haverequestedthattheimport
t.;quotassti11inforceinFrancebeabolished.

-3
Indiarepeatedthisrequestinthemultilateraltradenegotiations .In
viewofthestatementsmadeintheMTNinfavourofthedevelopingcountries,-
theCommunitywouldappeartohavelittlechoicebuttomovetowardsmeeting
India'srequests,especiallysincecoirproductsareunquestionably developing
countryproducts. „
However,accountshouldalsobetakenoftheneedfortheFrenchcoirproducts
industry,whichatpresentreceivesprotection,toadjustgraduallytoasystem
ofliberalization ofimports.Thisindustry,whichprovidesworkforabout
250peopleinFrance,isgraduallyturningtowardsthemanufactureofmore
sophisticatedarticles(rubber-backed carpetsariddoormats)thanthoseproduced
byIndianindustry.Itstillneedstimetoenableittocompletethisprocess
ofspecialization .
/ -•' » ^ \•'
cj)TheassurancestobeobtainedfromIndiaonthesupplyofcoiryarntoCommunity
industryarewarrantedbythefactthatIndiaistheonlycountry-intheworld
atthemomentwhichisabletosupplytheCommunity'sindustrieswiththese
.products.TheEuropeanindustry-notablyitsFrenchcomponent-istheleading-
worlduserofIndiancoiryarn.ForanumberofyearstherelevantIndian
authorities haveappliedapolicywhichwould'appeartohavetheeffectofincreasing
thepriceandthescarcityofexportedcoiryarn;theintroduction ofthehusk
controlregulation,whichgivesthecorporatesectoramonopolyoftherettingof
1husks,led.tothedoublingofrettedhuskpricesbetween1974and1976andtoa
50%priseinthepriceofexportedyarn,accordingtotheEuropeanfirmsaffected.
Atthebeginningofthisyear,theIndianCoirBoarddecidedtoincreasethe ■
priceofcoiryarnby50-60%..TheEuropeanindustryhascomplainedseveraltimes
aboutthispolicy,whichclearlyis,makingdifficulttheattemptsofcooperation
betweentheCommunityandIndianindustriesbeingmadeintheJointCommittee
orunderthepresentAgreementinforce.Apartfromtheabovementionedprice
problem,theEuropeanindustryhasonmanyoccasionsexpresseditsserious
fearsconcerningtheprospectofasteadysupplyofyarnandothercoirproducts
originatinginIndia,anditwouldbeopportunetotakethisconcerninto.
consideration duringthenegotiations .
0/•■

-4
IV.Giventhe-Community'sneedtocontinue ,toregulatetradeincoirproducts
forawhileandtheadvisability ofdoingthis/asinthepast,bymeansof
measuresnegotiatedwithitspartner,takingintoaccounttheneedforthe'
Communitytoensurethatprogress ,ismadetowardsmeetingIndia'srequestsin
partatLeast-thuscreatingtheconditionsfornegotiations tobeundertaken
withsomechanceofproducing anagreement-andbearinginmindalsotheneed
toallowtheCommunityindustryintheMemberStateretaining an'importquota
forcoirmatsandmattingsometimetoadjusttotheliberalization ofimports,
itwouldseemadvisablethatthetwofollowingpointsshouldconstitute thebasis
oftheCommunity'sapproachtothenegotiations
\,
-establishment ofasystemofvoluntaryrestraintofexportsin
respectoftheregionoftheCommunitywhichatpresentoperatesan
importquotaforthisproduct(coirmatsandmatting);
-anundertaking tosuspendcompletelyallquantitative restrictions
onexportsforthelasttwo-yearsofthe-Agreement.
Accordingly,theCommission recommendsthattheCounciladopttheattached
draftDecision. -

RECOMMENDATION FORACOUNCILDECISION
authorizing theCommissiontoopennegotiations
^-
withIndiawithaviewtotheconclusion ofan
agreementontradeincoirproducts
\ .
THECOUNCIL OFTHEEUROPEAN COMMUNITIES­
• 9 '
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
andinparticularArticle113thereof,
HavingregardtotheRecommendation fromtheCommission,
WhereastheCommunityofferongeneralisedtariffpreferences stipulatesthat
forcoirproductstheelimination ofcustomsdutieswillalsobeincluded ^
"wherespecialarrangements havebeenmadewiththedeveloping exporting
countries";
Whereasthese"specialarrangements "areconstituted byanAgreement ontrade,
incoirproductsnegotiated bytheEuropeanEconomicCommunitywiththeRepubli
ofIndia;whereasthisAgreementexpireson31December1979;
Whereasitisadvisabletoauthorizetheopeningofnegotiations with
Indiawithaviewto,determining thearrangements whichshallapplyafter
thisdatetotradeincoirproducts,.
-,f .--■
HASDECIDEDASFOLLOWS:
SoleArticle
TheCommissionisherebyauthorizedtoopennegotiations withaviewto
theconclusionofanagreementbetweentheEuropeanEconomicCommunityand
theRepublicofIndiaontradeincoirproducts.
TheCommissionshallconductthesenegotiations inconsultation with
theArticle113Committee andinaccordance withtheDirectives annexedtothis
Decision.
DoneatBrussels, FortheCouncil
ThePresident

ANNEX
NEGOTIATING DIRECTIVES
1.Agreementtobevalidforsixyears,i.e.until31December1985.
2.Voluntaryrestraint xbyIndiaofitsexportstoFranceofcoirmats
andmatting(CCTheadingNo.ex58.02)until31December1983\
Thevolumeoftheceilingwillbecalculated onthebasisofthe
nationalquotacurrentlyinforce,withanappropriate annualpercentage
increase.
3.Suspensionon1January1984ofallquantitative restrictions inforce
intheCommunity.
V
4.Maintenance ofthezerodutytariffsuspensioncurrentlyinforce
undertheGSP.
5.SpecificassurancestobegivenbyIndiaasregardssuppliesofcoir
yarntoEuropeanindustry. .