WRITTEN QUESTION E-1727/97 by Abdelkader Mohamed Ali (GUE/NGL) to the Commission (23 May 1997)

Subject: Refunds in respect of dairy products exported to Ceuta and Melilla

Pursuant to the Uruguay Round agreements in the dairy sector and with a particular view to reducing the volume of dairy products which receive export subsidies, the Commission has adopted a number of measures which are of especial significance to Ceuta and Melilla. 14 March 1996 saw the abolition of refunds on cheese exports to Ceuta and Melilla, which amount to approximately 4000 tons per year. This is a negligible figure by comparison with the overall quota but it is essential to the two territories concerned. 23 January 1997 saw a 30% reduction in the level of export refunds for liquid milk. Since this is a basic human foodstuff it is unlikely that the volume of liquid milk shipped to Ceuta and Melilla will decrease as a result of this imposed reduction and that there will therefore be any reduction in the amounts exported under subsidy. However, the reduction will certainly lead to an increase in the cost of a vital product, to add to the increase which has occurred in the case of cheese. These increases are of particular significance since Ceuta and Melilla are territories with low purchasing power which find it difficult to secure supplies in markets other than Community ones.

1. Does the Commission believe that the low volume of cheese exports to Ceuta and Melilla and the small contribution that the abolition of the refunds relating to them will make to achieving the Uruguay Round objectives will compensate for the severe penalty inflicted on consumers in the territories concerned?

2. Does the Commission believe that the reduction in refunds for liquid milk exports to Ceuta and Melilla will result in a fall in the volume of the subsidized amounts shipped to those two territories and that it will take some of the burden off the GATT quota for the 'others' group?

3. In view of the fact that restoring the refunds in respect of the small amounts of milk and dairy products exported to Ceuta and Melilla would not present major obstacles to the fulfilment of the GATT agreements and having regard to the particular social and economic situation of the territories concerned, and whereas milk and dairy products are basic foodstuffs, does the Commission not consider that the time has come to reinstate refunds for milk and dairy products exported to Ceuta and Melilla?

Answer given by Mr Fischler on behalf of the Commission (1 July 1997)

1. The effects of export refunds changes are spread over the component parts of the dairy industry ranging from the Community milk producer at one end to consumers in third countries at the other. The adjustments to margins and prices necessitated by such changes are not limited to one group within the sector.

While the quantity of cheese exports to Ceuta and Mellila may appear relatively small compared to the total quantity of Community cheese exported with subsidies it represents a significant part of the annual volume reduction required to respect the General agreement on tariffs and trade (GATT) limits. For that reason the Commission considers that the fixing of a zero refund for Ceuta and Mellila makes a significant contribution to achieving the Uruguay round objectives.

2. The Commission believes that the reductions in refunds for liquid milk exports will not result in a substantial drop in exports of these products to Ceuta and Melilla but will reduce the pressure on demand for export licences for the other milk products category. The exports from the Community to Ceuta and Mellila in 1996 amounted to about 20 000 tonnes.

3. The Commission has never considered its export refund policy as having a social dimension. It also recalls that the gradual reduction of export subsidies (worldwide) that was agreed in the Uruguay Round, will bring substantial benefits to consumers. It therefore maintains its position that the refunds for cheese and milk for Ceuta and Melilla, as for certain other countries, should remain unchanged.