5.

The defendant tries to overcome the difficulty of these decisions in the first place by saying that if the failure of the Council to make regulations for certain agricultural sectors does not prevent the application of the principles of the Treaty concerning the free movement of goods, neither should it constitute an obstacle for the exceptions allowed by the Treaty to the application of those principles. It states that the need for some flexibility in agricultural matters is clear from the said provision of Article 38 (2) of the Treaty in that, while it provides that the rules laid down for the establishment of the common market shall apply to agricultural products, it makes an exception where otherwise provided in Articles 39 to 46. It is accordingly possible for the Community institutions to derogate from the general rules relating to the establishment of the common market for agricultural products which are subject to specific common legislation. According to the defendant, the States should be acknowledged to have the same option in the case of products which are not yet the subject of a common organization and which, accordingly, have remained subject to action on their part. In the defendant's view, to take the opposite view might create a legislative vacuum. The defendant further states that the Charmasson judgment refers only to derogations from the principle of the free movement of goods based on the existence of a national organization of the market but does not affect those derogations which, without being connected with the normal functioning of a national organization of the market, are intended, by means of temporary departures from the principles of the common market, to cope with a difficult situation in a particular agricultural sector, failing and pending action by the Community institutions. As regards the French Government's first observation, it must be borne in mind that the Community authorities did take action concerning potatoes in the form of common protective measures in the nature of tariffs to be applied against non-member countries, though only after the adoption of the national measures which we are considering. The fact is that on 20 January 1976 the Council, in Regulation (EEC) No 128/76, totally suspended the Common Customs Tariff duty for certain kinds of potatoes in view of the potato shortage in the Community. Furthermore, in view of the fact that potatoes were in short supply in the common market the Council, on 17 February 1976, temporarily imposed a tax on exports of that product to non-member countries, at the same time providing for the possibility of adjusting the amount of this tax to take account of changing prices on the Community market and on the world market and of any import subsidies granted by non-member countries. The defendant was not at pains to demonstrate or even to argue that this Community action had been insufficient to cope with the situation which arose in the potato sector. Consequently, the conclusions which the French Government wishes to draw from the alleged absence of legislative measures by the Council can only relate to the period prior to the adoption of the Community measures referred to (at most, from October 1975 to February 1976). In any case the basic weakness of the defendant's contentions lies, in my view, in the fact that the Treaty lays down that freedom of movement shall be achieved by the end of the transitional period through the abolition of customs duties and quantitative restrictions on all agricultural products, whether or not they are subject to a common organization of the market. It does not give the States the right, after the end of the transitional period, to derogate unilaterally from the general principles of the common market save for the possible exception of the temporary maintenance, in substitution for quotas, of minimum prices for imports (Article 44 (1) and (6)). Apart from this possibility, the general qualification arising from the provision of Article 38 (2) of the Treaty can, after the end of the transitional period, be applied only as the result of action by the Community institutions. The purpose of the provisions of Title II of the Treaty is, in fact, to enable the Community institutions to take account, when adopting common provisions for the agricultural markets, of the particular needs of agriculture and, to this end, to adopt special arrangements which in certain respects may depart from the strict application of the general rules of the common market. But the conferment of power on the Community to adapt those rules to a special type of product is no justification for the contention that the States should be acknowledged to have a corresponding power in relation to products for which a common organization of the market has not been established. Moreover, as the Commission has pointed out, not even the special measures intervening in and organizing production and trade within the framework of the common agricultural policy can involve the denial of freedom of trade between the Member States. The restrictive effect on trade which may be caused, for example, by the possible repercussions of certain measures, such as intervention prices, export refunds and so on, on the quantities produced is in any case merely an indirect one. And, above all, such actions, which are based on considerations which are valid throughout the territory of the Community, do not endanger the unity of the market. While, therefore, it is true that the common organizations of the market give rise to intervention on the agricultural market by public authorities to an extent which would not be permissible in the industrial field, those organizations still have to abide by the fundamental principle of the freedom of trade throughout the Community. It does not seem acceptable therefore to contend, as the defendant does, that the application of the general rules of the market to agricultural products which are not subject to a common organization has the consequence that agricultural products are sometimes treated as such and at other times as industrial products, according to whether the Community has or has not provided for them to be subject to a market organization. On the other hand, it must be emphasized that the principle of free movement applies to all agricultural products, whether or not subject to a common organization of the market. In consequence, the fact that, in agricultural sectors not subject to a market organization, the States have retained the right to adopt steps of their own does not permit them, in exercising this residual power, to refrain from observing the general rules on which the common market is based and, in particular, to ignore the rules designed to preserve freedom of trade within the Community.