Proposal for a COUNCIL DECISION on the position to take by the Community in the Association Council established by the Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, concerning the improvement of the trade arrangements for processed agricultural products foreseen in Protocol 3 of the Europe Agreement between the European Communities and the Republic of Hungary

(presented by the Commission)

EXPLANATORY MEMORANDUM

Article 19 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, approved by Decision of the Council and the Commission (93/742/EC,ECSC,Euratom) of 13 December 1993 [1], provides that Protocol 3 lays down the trade arrangements for the processed agricultural products which are listed therein. Pursuant to Article 2(1) of the Protocol adjusting trade aspects of the Europe Agreement to take into account 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 agreements, approved by Council Decision (1999/67/EC) of 22 October 1998 [2], Protocol 3 to the Europe Agreement has been replaced by the text contained in Annex G to that Protocol.

[1] OJ L 347, 31.12.1993, p. 1.

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

During the debate on the mandate proposed by the Commission allowing the improvement of the agricultural part of the Europe Agreements, Member States asked the Commission to negotiate in parallel improvement of the access to the markets for processed agricultural products. This negotiation would have as a legal basis the relevant provisions of the Protocol 3 mentioned above.

Following this request of the Council, the Commission services started negotiations with a delegation of the Republic of Hungary in order to improve access to the markets.

In December 2000 the two parties have reached a technical agreement that envisages the subsequent reciprocal elimination of import duties for all processed agricultural products and an annual increase of the amount of the preferential quotas. According to this agreement, all trade in processed agricultural products between the Community and Hungary will be liberalised within eight years.

It is therefore proposed to the Council to adopt this Proposal for a Decision of the Association Council, aiming to adapt Protocol 3.

2001/0093 (ACC)

Proposal for a COUNCIL DECISION on the position to take by the Community in the Association Council established by the Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, concerning the improvement of the trade arrangements for processed agricultural products foreseen in Protocol 3 of the Europe Agreement between the European Communities and the Republic of Hungary

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal from the Commission,

Whereas:

(1) The Europe Agreement [3] establishes an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part.

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

(2) Protocol 3, as amended by the Protocol adjusting trade aspects of the Europe Agreement [4] to take into account 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, lays down the trade arrangements in processed agricultural products between the Community and Hungary.

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

(3) Under Article 1(2) of Protocol 3 the Association Council decides in particular on any amendment of the duties mentioned in the annexes to this Protocol and on the increase or abolition of tariff quotas.

(4) Under Article 2, second indent of this Protocol, the Association Council also decides that the duties applied may be reduced in response to reductions resulting from mutual concessions relating to processed agricultural products,

HAS DECIDED AS FOLLOWS:

Sole Article

The position to be taken by the Community within the Association Council established by the Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, concerning the improvement of the Protocol 3 on the bilateral trade of processed agricultural products, shall be based on the draft decision of the Association Council annexed to this Decision.

Done at Brussels,

For the Council

The President

ANNEX

Proposal for a

EC-HUNGARY ASSOCIATION COUNCIL DECISION N°... /2001

on the improvement of the trade arrangements for processed agricultural products foreseen in Protocol 3 of the Europe Agreement

THE ASSOCIATION COUNCIL,

Having regard to 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 and in particular Article 1(2) of Protocol 3 thereof,

Whereas:

(1) Protocol 3 lays down the trade arrangements in processed agricultural products between the Community and Hungary.

(2) Under Article 1(2) of this Protocol the Association Council decides in particular on any amendment of the duties mentioned in the annexes to Protocol 3 and on the increase or abolition of tariff quotas.

(3) Under Article 2, second indent of this Protocol, the Association Council also decides that the duties applied may be reduced in response to reductions resulting from mutual concessions relating to processed agricultural products.

(4) The annual quotas provided for in Annexes I and II of this Decision should be opened for the year 2001. In view of the fact that these annual quotas can only be opened after the 1st January 2001, on a date to be fixed, they should be reduced on a pro rata basis according to the period already elapsed,

HAS ADOPTED THIS DECISION:

Article 1

Annexes I and II of Protocol 3 on the trade in processed agricultural products between the Community and Hungary are replaced by Annexes I and II of this Decision.

Article 2

The annual quotas for the year 2001 provided for in Annexes I and II of this decision will be reduced on a pro rata basis taking into account the period, based on whole months, already elapsed.

Article 3

This Decision shall enter into force on [...].

Done at Brussels,

For the Association Council

The President

ANNEX I

Table 1 : Quotas applicable upon import into the Community of goods originating in Hungary - exempt from duty

>TABLE POSITION>

Table 2a: Duties applicable upon import into the Community of goods originating in Hungary

Note : The duties set out in this table are subject to an annual reduction by 10 % of the duties applicable on 31.12.2000. The amounts taken into consideration in calculating the reduced agricultural components (EAR) and additional duties (AD S/ZR and AD F/MR), applicable on importation into the Community of goods listed in this Table are those set out in table 2 (b) (from 1.7.2000) of Annex 1 of Commission Regulation (EC) No 2204/1999 of 12 October 1999 (pages 775 to 787 of OJ L 278 of 28 October 1999) (1).

>TABLE POSITION>

Table 2b: Duties applicable upon import into the Community of goods originating in Hungary

Note : The duties set out in this table are subject to reduction by 20 % of the duties applicable on 31.12.2000. From 2002 on, the duties set out in this table are subject to a further annual reduction by 10 % of the duties applicable on 31.12.2000. The amounts taken into consideration in calculating the reduced agricultural components (EAR) and additional duties (AD S/ZR and AD F/MR), applicable on importation into the Community of goods listed in this Table are those set out in table 2 (b) (from 1.7.2000) of Annex 1 of Commission Regulation (EC) No 2204/1999 of 12 October 1999 (pages 775 to 787 of OJ L 278 of 28 October 1999) (1).

>TABLE POSITION>

Table 3: Basic amounts taken into consideration in calculating the reduced agricultural components (EAR) and additional duties applicable on importation into the Community of goods listed in Table 2

Basic Product // MFN rate on 1.7.2000 (EUR/100 kg)

(1) // (2)

Common wheat // 9,504

Durum wheat // 14,752

Rye // 9,261

Barley // 9,261

Maize // 9,395

Long-grain husked rice // 26,432

Skimmed-milk powder // 118,800

Whole-milk powder // 130,432

Butter // 189,562

White sugar // 41,928

ANNEX II

Table 1 : Quotas and duties applicable upon import into Hungary of goods originating in the Community

Note : The duties set out in this table are subject to reduction by 20 % of the duties applicable on 31.12.2000. From 2002 on, the duties set out in this table are subject to a further annual reduction by 10 % of the duties applicable on 31.12.2000.

>TABLE POSITION>

Table 2: Duties applicable upon import into Hungary of goods originating in the Community

Note : The duties set out in this table are subject to reduction by 20 % of the duties applicable on 31.12.2000. From 2002 on, the duties set out in this table are subject to a further annual reduction by 10 % of the duties applicable on 31.12.2000.

>TABLE POSITION>

>TABLE POSITION>