WRITTEN QUESTION E-2836/96 by Vincenzo Viola (PPE), Livio Filippi (PPE) and Danilo Poggiolini (PPE) to the Commission (25 October 1996)

Subject: EU 'refunds'in respect of 'Pecorino Romano' cheese

On the basis of the last GATT agricultural agreements regulating cheese exports, the Commission has made provision for a 36% reduction in overall expenditure and a 21% reduction in the volume of cheese covered by the EU 'refund' scheme.

No other cheese with a high added value is as dependent on these refunds as Pecorino Romano, 85% of which is produced in a region of Italy - Sardinia - which, unlike all the other EU regions which produce cheeses covered by the GATT agreements, is, according to the Commission itself, characterized by extremely critical economic and social conditions caused by underdevelopment.

Reductions in refunds resulting from the GATT Agreement should be effected fairly and should not be concentrated on certain products.

However, reductions made to date do not seem to be aimed at supporting products with a high added value, exports of which ought to be afforded greater protection in the interest of the Community economy.

Will the Commission therefore reconsider the provision adopted and put forward a new proposal based on a more balanced and gradual approach, taking due account of the demands of all the Member States and distributing the burden of the measure fairly among all Community producers?

Answer given by Mr Fischler on behalf of the Commission (18 November 1996)

Following the restrictions on subsidized exports imposed as a result of the GATT Agreement (the general agreement on customs tariffs and trade), applications for export licences for cheese have risen to an extent which

risks the Community exceeding the limits imposed. As a result, refunds for cheeses have been generally reduced on a number of occasions without achieving the required reduction in applications for licences. Other measures have been imposed, including an increase in securities, a reduction in the period of validity of licences, an increase in the minimum price of cheeses eligible for refunds and finally the abolition of refunds for certain destinations or their differentiation. The basic aim of all these measures, particularly the last, is to preserve the Community's share of international trade as far as possible.

Although the choice of destinations to be deleted from the list of refunds or to be treated on a differentiated basis was not easy, the decision was taken as objectively as possible in the light of the criteria adopted: competition at these destinations from exports from outside the Union, the capacity of these markets to absorb the price rises which could result and the balanced distribution to the various producer Member States of the burden imposed by restrictions on subsidized exports. In these circumstances, it is not possible to exempt pecorino romano, for which refunds had to be reduced for the United States in the same way as hard cheeses grouped as 'other' in the nomenclature and headed for that destination.

By following these criteria, the Commission seeks both to achieve fair treatment of all producers and to replace subsidized exports by exports on which refunds are not paid to the greatest extent possible.