PROPOSAL FOR A COUNCIL DECISION CONCERNING ADJUSTMENTS TO THE VOLUNTARY RESTRAINT AGREEMENT FOR SHEEPMEAT AND GOATMEAT CONCLUDED WITH URUGUAY
Date: 1989-12-20
Institutions: European Commission
Subjects: Uruguay, sheepmeat, trade agreement

OMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

COMC89)  674 

final 

Brussels, 20  December  1989 

Proposal  for a 

COUNCIL  DECISION 

concerning  adjustments  to the voluntary  restraint  agreement 
for sheepmeat  and goatmeat concluded with  Uruguay 

(presented  by the  Commission) 

EXPLANATORY  MEMORANDUM 

1. 

The  changes  recently  decided  on  for  Improving  the operation  of  the 
common  organization  of  the market  in sheepmeat  and  goatmeat  will 
result  in tighter  discipline and  a decrease  In support  for  Community 
producers. 

As  the Commission  has emphasized  several  times  in  Its  communications 
to the Council  on  the  future of  the CAP,  the extra  effort  being 
required  from  the Community's  agricultural  producers must  be  backed 
up  by  parallel  import  measures.  This  in turn will  make  It  necessary 
to make  adjustments  to the voluntary  restraint  agreements  concluded 
between  the Community  and  the main  supplier  countries. 

2. 

It was against  this background  and  in  line with  the conclusions  of 
the  European  Council  of  February  1988 that  the Council  adopted 
negotiating  directives  for  this subject  on  15 November  of  the  same 
year.  Negotiations, notably  with  Uruguay,  followed  and  resulted  in 
the attached  draft  agreement. 

3. 

The essential  elements of  the adjustments  to be made  are  as  follows: 

-  reducing  the quantities  initially  provided  for, which  are  reduced 

from  5 800  t to 5 220  t.  However, until  31  December  1990, Uruguay 
may  deliver  a part  of  the quota  attributed  to another  supplying 
country  which  has not  been used  in 1989.  This  (non-utilized) 
quantity  is fixed  at  1 700  t of which  500  tonnes  is a  form  which 
has never  been  frozen. 

-  setting  up  a system of  Import  price  surveillance; 

-  restricting  the opportunities  for  importing  chilled  meat; 

-  total  suspension  of  import  levies-, 

-  provisions  for  sensitive  areas of  the Community  for  1989 and  1990. 

4. 

The  issue of  sensitive  areas will  be  addressed  in an  additional 
exchange  of  letters  between  the Commission  and  Uruguay.  For  the 
quantities  Involved,  Uruguay  will  undertake  that  for  1989  the  exports 
to France  are  limited  to 400  t and  to  100  t for  Ireland  (carcass 
weigh  equivalent).  In 1990, these  limits will  be  increased  by 20%. 

PROPOSAL  FOR A COUNCIL  DECISION 

concerning  adjustments  to the voluntary  restraint  agreement 
for sheepmeat  and goatmeat  concluded with Uruguay 

THE COUNCIL OF THE EUROPEAN  COMMUNITIES, 

Having  regard  to the Treaty  establishing  the European  Economic  Community, 
and  in particular  Article  113 thereof, 

Having  regard  to the proposal  from  the Commission, 

Whereas  the Community  has taken measures  to stabilize  the market  in 
sheepmeat  and goatmeat  and whereas  it  intends to bring about  better 
Integration of  that market; 

Whereas  in the context  of  those adjustments  to the common organization of 
the market  it would  be opportune  to make adjustments  to the voluntary 
restraint  agreements concluded  in the sector  with certain  third countries, 
in order  to stabilize  imports and  improve  import  prices, 

Whereas  the Commission  has held negotiations on  the matter  which  have  led 
to an agreement  with  Uruguay, 

HAS DECIDED AS FOLLOWS: 

Article 1 

1. 

The Agreement  in the form of an exchange of  letters concerning 
adjustments  to the voluntary  restraint  agreement  for sheepmeat  and 
goatmeat  with  Uruguay, 

is hereby  approved on behalf of  the European  Economic  Community. 

The  text of  the Agreement  Is attached  to this Decision. 

Article 2 

The President  of  the Council  is hereby  authorized  to designate  the person 
empowered  to sign  the Agreement  in order  to bind  the Community. 

Done at Brussels, 

For  the Council, 
The President 

FINANCIAL  STATEMENT 

1. BUDGET HEADING: 100 

DATE: 11 December 1989 

APPROPRIATIONS: ECU 1 152,8 mi II ion 

1990 draft budget 

2. TITLE: Proposal for a Council Decision concerning the adaptation of the voluntary restraint agreement 
between the European Economic Camunity and Uruguay on trade  in sheepmeat and goatmeat 

3. LEGAL BASIS: Article 113 of the Treaty 

4. AIMS OF PROJECT: To import a quota of 5 220 tonnes of sheepmeat frcm Uruguay subject to zero levy. 

5.  FINANCIAL  IMPLICATIONS 

5.0 EXPENDITURE 

- CHARGED TO THE EC BUDGET 
- (REFUNDS/INTERVENT ION) 
- NATIONAL ADMINISTRATION 
-OTHER 

5.1 REVENUE 

- OWN RESOURCES OF THE EC 
(LEVIES/CUSTOMS DUTIES) 

- NATIONAL 

Period of 12 months 

Current Financial Year 
1990 

Following Financial Year 
1991 

p.m. (1) 

p.m. (1) 

p.m. (1) 

- ECU 0,9 mi 11 ion 

- ECU 1,4 mi 11 Ion 

- ECU 0,9 ml 11 Ion 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 

1992 

p.m. 

ECU 0,9 ml 11 Ion 

5.2 METHOD OF CALCULATION: The average  levy appl led to imports of sheepmeat  Is ECU 1,750/t.  However, for 
imports frcm Uruguay the levy is limited to the autonomous 10% duty  arising 
frcm binding within the 
GATT,  i.e. approximately ECU 150/t.  The abolition of this duty would result  in a loss of revenue over 
12 months of: 5 220 t x ECU 150/t x 1,14 (DR) - ECU 0,9 m ill ion 
Since the measure applies retroactively from 1 January 1989, In 1990 levies collected  In 1989 on  Imports 
of meat frcm Uruguay must be refunded.  The cost of reimbursement  In the 1990 financial year  is estimated 
at ECU 0,5 mi 11 ion. 

(TÔTCAN THE PROJECT BE FINANCED FRCM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE C U R R E T F B U X* n  "" 

6.1 CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET? 

6.2  IS A SUPPLEMENTARY BUDGET NECESSARY? 

6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? 

Hi 

m 

M> 

YFS 

OBSERVATIONS: 
(1) No precise ccnmltment appears In the agreement as regards import prices and the zero  Import  levy on such 
meat could result in a fall  in prices on the Camunity market with a corresponding rise  in premluns 
granted and therefore  In expenditure to the Camunity budget.  It is difficult to estimate the scale. 
cost. 

- 7 -

FICHE D'IMPACT  SUR  LA COMPETITIVITE ET L'EMPLO 

Proposition  de Décision  du Conseil 
concernant  l'adaptation  de  l'accord  d'auto-lImitât ion avec  l'Uruguay 

Ce  projet  d'accord  envisage  une  modification  du  régime  à  l'importation  des 
viandes  ovine  et  caprine, actuellement  applicable  dans  le cadre  de  l'accord 
d'auto-limitation conclu  avec  l'Uruguay. 

Dans  la  mesure  où  il  prévoit  essentiellement,  d'une  part,  le  maintien  des 
quantités  importées  et,  d'autre  part,  l'instauration  d'une  procédure  de 
surveillance  des  prix  à  l'importation,  ce  projet  n'a  pratiquement  pas 
d'impact  sur  les  entreprises.  On  peut  également  considérer  que  les 
modifications proposées  ne  leur  Imposeront  pas de coûts  supplémentaires. 

EXCHANGE OF LETTERS RELATING TO THE  1980 AGREEMENT  BETWEEN 
THE  EUROPEAN  COMMUNITY  AND URUGUAY ON  TRADE 
IN MUTTON AND  LAMB. 

A. Letter  N°1 

Sir, 

I have  the honour  to refer  to the exchange of  letters of  14 October  1980 
constituting an Agreement  between  the European Community  and  Uruguay 
establishing  provisions  relating  to  import  of mutton  and  lamb  Into the 
Community  from Uruguay  and  to negotiations held between our  respective 
delegations  for  the purpose of establishing  temporary  derogations  from 
certain of  those provisions concurrent  with  the  implementation of measures to 
stabilise  the European Community  sheepmeat  sector  and  to reform  the European 
Community's  Internal  regime  In order  to achieve a unified  European  Community 
sheepmeat  market.  Accordingly,  they  have agreed on  the following  derogations 
from  the Principal  Agreement  which shall  remain  in force  for  the duration of 
this Agreement. 

Access and quant ity 

Clause 1 

In Clause  2 of  the Principal  Agreement, as modified by Clause 6 of  the 
Principal  Agreement,  the celling  figure of 5.800 t shall  be deemed  to 
have been  replaced  by  the figure of 5.220 t.  This ceiling shall  be 
deemed  to  include a maximum  in 1989 of  2.000  t metric  tonnes of  lamb 
imported  into the European Community  from Uruguay  in a form which  has 
never  been  frozen, a maximum of  2.200 metric  tonnes  in 1990, a maximum 
of  2.400 metric  tonnes  In 1991, and a maximum of  2.600 metric  tonnes 
in 1992. 

B. 

Tariff 

In Clause 5 of  the Principal  Agreement,  the words  "a maximum amount of 
10%, ad valorem" shall  be deemed  to be replaced  by  the word  "zero". 

C. 

Price surveillance 

• 

With a view to  improved  sheepmeat  prices within  the European 
Community,  prices for  lamb  Imported  from Uruguay will  be monitored  in 
accordance with  the procedures contained  in the annex  to this 
Agreement. 

Consultation 

Clause 2 

Notwithstanding Clause  1 C) of  this Agreement  either  Party may  request 
consultations concerning  the operation of  this Agreement  at  any  time. 

GATT obi I gat Ions 

CI ause 3_ 

The  provisions of  this Agreement  shall  be agreed  without  prejudice  to the 
rights of  Uruguay  and  the European Community  under  GATT. 

This Agreement  shall  enter  into force on  1 January  1989 and  shall  remain  in 
force until  31  December  1992. 

Clause  4 

Within 6 months prior  to expiration of  this Agreement,  Its provisions shall 
be  reviewed. 

CI ause 5. 

I have  the honour  to propose  that,  if the  foregoing  is acceptable  to your 
Goverment,  this  letter  and your  confirmatory  reply  shall  together  constitute 
and evidence  an Agreement  between  the European  Economic  Community  and  Uruguay 
on  the matter. 

Please accept, Sir,  the assurance of my  highest  consideration. 

For  the CounclI 
of  the  European 
Commun 111 es 

tJ 

Price Surveillance  Procedure 

ANNEX 

1. 

2. 

The European Community  will  monitor  the prices  In each Member  State 
for  Imported  frozen  lamb carcasses  from Uruguay on  the basis of  the 
average prices over  each monthly  period. 

The  relationship  between  the prices  for  Imported  frozen  lamb carcasses 
from Uruguay  In each Member  State and  the market  prices for  Community 
produced  lamb  In each  such Member  State will  be compared with  the 
benchmark  level  specified  below  for  each  such Member  State.  If this 
comparison  Indicates that  the price  relationship  has, in two Member 
States  In the same month, moved below  the benchmark  levels  for  those 
Member  States, technical  consultations will  take place at  the request 
of either  Party  to determine  factors causing  the downward movement. 
The  factors  that will  be  taken  into account  by  the parties  in such 
consultations shall  include  traditional  and seasonal  price 
relationships and  fluctuations, the prices of  cuts,  the  impact of 
prices of other  meats, and other  exceptional  factors. 

Me-roer States by  region 

Northern Member  States  (Belgium, 
Denmark, Federal  Republic of Germany, 
France,  Ireland,  Luxembourg, 
Netherlands, United  Kingdom) 

Benchmark  levels  for  the 
: 
: 

relationship  between 
pr ices of  imported 
frozen 
lamb carcasses and 
pr Ices of 
domestically  produced 
lamb. 

55 percent 

Southern Member  States 
(Greece,  Italy, Portugal, Spain 

45 percent 

In the event  that  the downward movement  of  the relationship  between 
prices for Uruguayan  frozen  lamb carcasses and Community  produced  lamb 
below  the benchmark  levels  in the particular  Member  States under 
consideration  Is indicative of a problem,  the Parties shall  consider 
any  recommendations arising out of  the  technical  consultations  for  the 
resolution of  the problem.  If the problem  Identified  is attributable 
to the prices at which Uruguayan  frozen  lamb carcasses  are being  sold 
In those member  states by Uruguayan  exporters  then Uruguay  would  take 
what  action  is available to  It to restore  the price  relationship 
between  frozen  lamb carcasses and Community  produced  lamb  in those 
member  states  to the benchmark  levels. 

Should  the Parties  In the  technical  consultations  fail  to reach 
agreement  on appropriate measures  to resolve  the problem, the 
Consultative  Committee established  under  Clause  10 of  the Principal 
Agreement  may  be convened  at a senior  policy  level  at  the request of 
either  Party  to give the matter  urgent  consideration.  If agreement 
cannot  be reached  at official  level, the matter  may  De referred by 
either  party  to the EC Commissioner  for Agriculture  and  the Uruguayan 

~ 

•£ 

* / . i - i / « i i l t i i r«  1r\r 

r e s o l u t i o n. 

5. 

Uruguay  and  the European  Community  adopt  as  targets  for  achievement  by 
the end of  1992 an  improvement  In the previously  defined  benchmark 
levels  for  Northern Member  States by 5 percentage  points  and  for 
Southern Member  States by 8 percentage  points. 

B. Letter  N° 2 

Sir, 

I have the honour  to acknowledge  receipt  of  your  letter of  today's date, 
which  reads as follows : 

"I have  the honour  to refer  to the exchange of  letters of  14 October  1980 
constituting an Agreement  between  the European Community  and  Uruguay 
establishing  provisions  relating  to  import  of mutton  and  lamb  Into the 
Community  from Uruguay  and  to negotiations held between our  respective 
delegations  for  the purpose of establishing  temporary  derogations  from 
certain of  those provisions concurrent  with  the  Implementation of measures to 
stabilise  the European Community  sheepmeat  sector  and  to reform  the European 
Community's  internal  regime  in order  to achieve  a unified  European  Community 
sheepmeat  market.  Accordingly,  they  have agreed on  the following  derogations 
from  the Principal  Agreement  which  shall  remain  In force  for  the duration of 
this Agreement. 

A. 

Access and quantIty 

Clause  i 

In Clause  2 of  the Principal  Agreement, as modified  by Clause 6 of  the 
Principal  Agreement,  the ceiling  figure of  5.800  t shall  be deemed  to 
have been  replaced  by the figure of 5.220  t.  This celling shall  be 
deemed  to  include a maximum  In 1989 of  2.000  t metric  tonnes of  lamb 
imported  Into the European Community  from Uruguay  In a form which  has 
never  been  frozen, a maximum of  2.200 metric  tonnes  In 1990, a maximum 
of  2.400 metric tonnes  In 1991, and a maximum of  2.600 metric  tonnes 
In 1992. 

B. 

Tariff 

In Clause 5 of  the Principal  Agreement,  the words  "a maximum amount of 
10%, ad valorem" shall  be deemed  to be replaced  by  the word  "zero". 

C. 

PrIce survelI lance 

With a view  to  improved  sheepmeat  prices within  the European 
Community,  prices for  lamb  imported  from Uruguay will  be monitored  In 
accordance with  the procedures contained  in the annex  to this 
Agreement. 

Consultation 

Clause 2 

Notwithstanding  Clause  1 C) of  this Agreement  either  Party may  request 
consultations concerning  the operation of  this Agreement  at  any  time. 

GATT obi I gat Ions 

CIause  3 

The provisions of  this Agreement  shall  be agreed  without  prejudice  to  the 
rights of  Uruguay  and  the  European  Community  under  GATT. 

This Agreement  shall  enter  Into  force on  1 January  1989 and  shall  remain  in 
force until  31  December  1992. 

CIause  ± 

Within  6 months  prior  to expiration  of  this Agreement,  Its provisions  shall 
be  reviewed. 

CI ause 5_ 

I have  the  honour  to propose  that,  If the  foregoing  is acceptable  to your 
Goverment,  this  letter  and  your  confirmatory  reply  shall  together  constitute 
and  evidence  an Agreement  between  the European  Economic  Community  and  Uruguay 
on  the matter." 

I have  the  honour  to confirm  the  foregoing  is acceptable  to my  Government  and 
that  your  letter  together  with  this reply  shall  constitute  an Agreement  In 
accordance with  your  proposal. 

Please  accept,  Sir,  the assurance  of my  highest  consideration. 

For  the  Government 

of  Uruguay 

Price  Surveillance  Procedure 

ANNEX 

1. 

2. 

The  European  Community  will  monitor  the prices  in each  Member  State 
for  Imported  frozen  lamb  carcasses  from  Uruguay  on  the  basis  of  the 
average  prices over  each  monthly  period. 

The  relationship  between  the prices  for  imported  frozen  lamb  carcasses 
from  Uruguay  In each  Member  State  and  the market  prices  for  Community 
produced  lamb  in each  such  Member  State  will  be  compared  with  the 
benchmark  level  specified  below  for  each  such Member  State.  If  this 
comparison  indicates  that  the price  relationship  has,  in  two  Member 
States  in the  same month, moved  below  the  benchmark  levels  for  those 
Member  States,  technical  consultations will  take place  at  the  request 
of  either  Party  to determine  factors  causing  the  downward  movement. 
The  factors  that  will  be  taken  into account  by  the  parties  in such 
consultations shall  include  traditional  and  seasonal  price 
relationships and  fluctuations,  the  prices of  cuts,  the  impact  of 
prices of  other  meats, and other  exceptional  factors. 

Member  States  by  region 

Benchmark  levels  for  the 

relationship  between 
pr ices of  imported 
frozen 
lamb  carcasses  and 
pr Ices of 
domestically  produced 
lamb. 

Northern  Member  States  (Belgium, 
Denmark,  Federal  Republic of  Germany, 
France,  Ireland,  Luxembourg, 
Netherlands, United  Kingdom) 

55  percent 

Southern  Member  States 
(Greece,  Italy, Portugal,  Spain 

45  percent 

3. 

In the event  that  the downward  movement  of  the  relationship  between 
prices  for  Uruguayan  frozen  lamb  carcasses  and  Community  produced  lamb 
below  the benchmark  levels  In the particular  Member  States  under 
consideration  Is  indicative  of  a problem,  the Parties  shall  consider 
any  recommendations  arising out  of  the  technical  consultations  for  the 
resolution  of  the problem.  If the problem  Identified  is  attributable 
to  the prices at which  Uruguayan  frozen  lamb  carcasses  are  being  sold 
In those member  states  by  Uruguayan  exporters  then  Uruguay  would  take 
what  action  is available  to  It  to  restore  the  price  relationship 
between  frozen  lamb  carcasses  and  Community  produced  iamb  in  those 
member  states  to  the benchmark  levels. 

Should  the Parties  in the  technical  consultations  fail  to  reach 
agreement  on  appropriate measures  to  resolve  the  problem,  the 
Consultative Committee  established  under  Clause  10 of  the  Principal 
Agreement  may  be  convened  at  a senior  policy  level  at  the  request  of 
either  Party  to give  the matter  urgent  consideration.  If  agreement 
cannot  be  reached  at  official  level, the matter  may  be  referred  by 
either  party  to  the  EC Commissioner  for  Agriculture  and  the  Uruguayan 
Minister  of  Agriculture  for  resolution. 

5. 

Uruguay  and  the European  Community  adopt  as  targets  for 
achievement  by  the end of  1992 an  improvement  in the 
previously  defined  benchmark  levels  for  Northern  Member  States 
by 5 percentage  points and  for  Southern  Member  States by  8 
percentage  points. 

-  8  -

Letter  No 1 

Brussels, 

Sir, 

I have  the  honour  to  refer  to Clause  1 of  the Exchange  of  letters  dated 
relating  to  the  1980 Agreement  between  the  European  Community  and  Uruguay  on 
trade  In mutton  and  lamb. 

I also  have  the  honour  to  confirm  that  before  31  December  1990,  In  addition 
to  the  celling  of  5  220 metric  tonnes,  a  quantity  of  1 700  tonnes  may  be 
delIvered. 
This  additional  volume  shall  be  deemed  to  include  a  maximum  of  500 metric 
tonnes  of  lamb  Imported  Into  the  European  Community  from  Uruguay  in  a  form 
which  has never  been  frozen. 

I should  be obliged  if you would  kindly  acknowledge  receipt  of  this  letter. 

For  the Council  of  the 
European  Communities 

- 9 -

B.  Letter  No 2 

Brussels, 

Sir, 

I have  to acknowledge  receipt  of  your  letter  of  today's  date  which  reads  as 
fol lows : 

"I  have  the  honour  to  refer  to  Clause  1 of  the  Exchange  of  letters  "-ted 
.....  relating  to  the  1980  Agreement  between  the  European  Community  and 
Uruguay on  trade  In mutton  and  lamb. 

I also  have  the  honour  to confirm  that  before  31  December  1990,  in addition 
to  the  celling  of  5 220 metric  tonnes,  a  quantity  of  1 700 tonnes  may  te 
delivered. 
This  additional  volume  shall  be  deemed  to  include  a  mnximum  of  500 metric 
tonnes  of  lamb  imported  into  the  European  Community  from  Uruguay  in  a  form 
which  has never  been frozen. 

I should be obliged  if you would  kindly  acknowledge  receipt  of  this  letter." 

Please accept, Sir, the assurance of my highest  consideration. 

For  the Government o-
Uruguay . 

ISSN 0254-1475 

COM(89) 674 final 

DOCUMENTS 

EN 

03  il 

Catalogue number : CB-CO-89-614-EN-C 

ISBN 92-77-56263-3 

Office for Official  Publications of the European Communities 
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