WRITTEN QUESTION P-2842/97 by Johanna Maij-Weggen (PPE) to the Commission (1 September 1997)

Subject: Overseas Countries and Territories (OCTs)

Can the Commission indicate how it intends to comply with its obligations under Part Four of the EC Treaty, the association arrangements derived therefrom and the Declaration in the Treaty of Amsterdam which restates in a more precise form the OCT decision?

As far as the rice market is concerned, can the Commission explain its approach towards the OCT, given that under the WTO the Community market has to be opened up, yet by taking exemption measures the Commission is in fact protecting the Community market from products - in particular, rice - from the OCTs? Is this not tantamount to passing on the obligations under the WTO to the OCTs?

Can the Commission say why the Eighth European Development Fund has not yet been approved? Is it true that release of the funds has been blocked until the Netherlands Antilles and Aruba accede to the Commission's wishes with regard to rice exports? Does not the Commission feel that this is an unfair and inappropriate means of enforcing cooperation by improperly linking trade and development? Is the Commission aware that important social and economic programmes are being delayed, such as SAPNA (the Social Action Plan for the Netherlands Antilles) and essential repairs to the Queen Emma bridge, and what is the Commission's response to this?

Is the Commission aware that businesses in the Antilles are subject to additional constraints in their exports of rice to the Community as the requisite import certificates can be requested only by a person or business established in a Member State who, or which, has been actively involved in the rice trade for at least one year? What explanation does the Commission have for this discriminatory practice?

Can the Commission say why the annual partnership meeting with the OCTs has been postponed?

Answer given by Mr Pinheiro on behalf of the Commission (10 October 1997)

Part Four of the EC Treaty relating to the overseas countries and territories (OCTs) has since 1957 been implemented regularly through six successive five-yearly decisions, in 1964, 1970, 1976, 1981, 1986 and 1991. The latest Commission proposal concerns the mid-term review of Decision 91/482/EC on the association of the overseas countries and territories with the European Economic Community ((OJ L 263, 19.9.1991. )). It was tabled on 14 February 1996 and has been under discussion in the Council since then.

The declaration on the OCT to be inserted into the Final Act of the Treaty of Amsterdam relates formally to the period after 1 March 2000. Until then the Commission will conduct relations with the OCT, as ever, bearing in mind the objectives set out in that declaration.

As regards the effects of the WTO on the preferential arrangements granted to the OCTs, notably for rice, the Commission considers that the tariff reductions adopted as part of the Uruguay Round could over time reduce the relative importance of investments in these sectors in the OCTs. That is one of the reasons for doubting the long-term viability of investments made over the last few years in certain OCTs, in particular in this sector. The Commission did on several occasions advise the operators concerned about the risks as the investments were essentially speculative and had only a limited effect on sustainable development. The Commission stresses finally that the safeguard measures taken for rice do not affect a product of OCT origin but exports to the Commission of rice originating in the ACP States and having undergone (minimal) processing in the OCT concerned. Moreover, the Commission's safeguard measures do not affect implementation of the undertakings made in respect of that product for the ACP States.

The overall amount of the eighth European Development Fund for the OCT has been known since the Cannes European Council at the end of June 1995, but its breakdown between instruments and between the OCTs of the various Member States and its implementing methods (linked to those for the eighth EDF for the ACP states adopted in Mauritius on 4 November 1995) are contained in the Commission proposal of 14 February 1996. As that proposal must be adopted unanimously by the Council, the Honourable Member will readily understand that the opposition of one of the Member States to some parts of it has prevented the other countries from accepting the other parts.

There is no question of forcing certain OCTs to 'accede to the Commission's wishes' on rice exports but rather to reach an agreement within the Community on the unanimity procedures set out in the EC Treaty. Council bodies are not therefore acting in an 'unfair and inappropriate' spirit by 'improperly linking trade and development' but are seeking to adopt an overall decision covering the whole gamut of EC-OCT cooperation, including trade arrangements.

The two projects cited by the Honourable Member are not being held up because the eighth EDF has yet to be approved:

- Queen Emma bridge: this project will be financed entirely under the 7th EDF, which has been available for some considerable time. The delay mentioned by the Honourable Member is due to the fact that the initial study assigned by the Curaçao port authority a local consultant did not produce the invitation to tender documents in the format required by the EDF's rules. The local consultant declined the offer to amend the existing documents so this task had to be assigned to another firm.

- Social action programme (SAPNA): it was agreed from the outset with the local authorities to finance this project from the 7th and 8th EDFs. It is still at the study and preparation stage, with the studies still in progress (until the end of this year). The Commission will then appraise the dossier before it is presented to the EDF Committee.

By contrast, many other OCTs less developed than the Netherlands Antilles have exhausted their seventh EDF allocation and for them the absence of a decision on the eighth EDF means a serious gap in the support for their development process.

Article 2(3) of Regulation (EC) No 1036/97 Council Regulation (EC) No 1036/97 of 2 June 1997 introducing safeguard measures in respect of imports of rice originating in the overseas countries and territories ((OJ L 151, 10.6.1997. )) requires that the applicant be a natural or legal person who has carried out a commercial activity in the rice sector for at least 12 months and be registered in the Member State in which the application is submitted. This is designed to ensure that the operator is reliable and avoid any possible risk of speculation on the import certificates. That is all the more necessary in the light of the quantity set in the safeguard measures and the advantage stemming from non-collection of customs duties.

No decision was ever taken that the Commission - Member State - OCT partnership meetings should be annual. It should be noted that the Commission delegation on the ground had numerous contacts with the local authorities and firms, that many visits were made to Brussels by Antilles' entrepreneurs, that partnership meetings were organised by the Commission before it adopted safeguard measures and that, above all, the partnership has been an intensive one since, for more than one and a half years, the weekly discussions in the Council have taken place in the presence of a representative of the Netherlands Antilles alongside the Dutch representative, the only such case among all the OCTs.