WRITTEN QUESTION E-3966/98

by Karin Jöns (PSE) to the Commission

(4 January 1999)

Subject: Special arrangements concerning Maize imports into Spain

Council regulations 1799/87(1) of 25 June 1987, 3875/92(2) of 28 December 1992, 3640/93(3) of 17 December 1993 and Commission regulations 1839/95(4) of 26 July 1995 and 1963/95(5) of 9 August 1995 lay down arrangements for imports of maize into Spain from the USA and other third countries. Pursuant to the above regulations, Spain is allowed an annual import quota of 2 million tonnes of maize and 300 000 tonnes of sorghum minus the quantities of certain substitute products. Regulation 1799/87 refers to the arrangements as a "transitional measure". The regulations further stipulate that the maize imports are to be used and/or processed in Spain and provide for the possibility of applying a countervailing duty to processed products exported from Spain to other Member States should there be any distortion of the market as a consequence of these exports.

As a result of the above regulations, the maize processing industry in Spain enjoys a comparative advantage over similar industries in other Member States since Spain can purchase the above-mentioned quotas on preferential terms, whilst at the same time obtaining high-quality third country maize suitable for processing into foodstuffs.

1. What is the Commission's definition of a "transitional measure" as referred to in Council Regulation 1799/87 with regard to its term of application?

2. Is the term of application of Regulation 1963/95 subject to any time limit?

3. Does the Commission agree that the internal market in maize products is subject to market distortions as a result of this regulation?

4. If so, what does the Commission intend to do to eliminate such market distortions?

5. How does the Commission intend to ensure the effective application of countervailing duties?

Answer given by Mr Fischler on behalf of the Commission

(16 February 1999)

The Spanish maize import quota is the outcome of negotiations between the Community and the United States on compensation for American export losses resulting from Spain's accession to the Community. The original agreement of 1987 was for a transitional four-year period. The Council then renewed it for three consecutive years until its inclusion in 1994 in the Marrakesh World Trade Organisation (WTO) agreements.

1. As the Marrakesh agreement is for an indefinite period signing it meant that the quota was no longer a transitional measure.

2. Commission Regulation (EC) 1839/95 (amended by Regulation (EC) 1963/95 of 9 August 1995(6) laying down detailed rules for the application of tariff quotas for imports of maize and sorghum into Spain and imports of maize into Portugal merely sets implementing rules for the WTO agreement quota. Its term of application is therefore not limited.

3. The possibility of distortion of competition has been recognised since the quota was introduced. That is why the rules stipulate that the maize must be used or processed in Spain. Until 1995 the rules allowed for introduction of a countervailing duty in the event of disturbance on the market for processed maize products. Since such a duty is incompatible with the single market instituted by the EC Treaty it was not carried over to Regulation (EC) 1839/95.

The Commission acknowledges that processors located in Spain using flint maize imported under the quota enjoy an economic advantage. In the case of processors using yellow maize imported under the quota no distortion of competition has so far been found. Yellow maize, used to produce animal feed, starch and sweeteners, accounts for more than 90 % of quota imports into Spain. Flint maize is used to make "corn flakes" and complaints have been addressed to the Commission by manufacturers in the north of the Community.

4. The Commission is at present examining the economic, legal and political implications of the flint maize problem. It hopes to reach conclusions in the near future.

5. Application of a countervailing duty in trade between Member States is incompatible with the single market provisions of the EC Treaty.

(1) OJ L 170, 30.6.1987, p. 1.

(2) OJ L 391, 31.12.1992, p. 1.

(3) OJ L 333, 31.12.1993, p. 13.

(4) OJ L 177, 28.7.1995, p. 4.

(5) OJ L 189, 10.8.1995, p. 22.

(6) OJ L 189, 10.8.1995.