Proposal for a COUNCIL REGULATION (EC) suspending the generalized tariff preferences for certain products originating in the Republic of korea
Date: 1994-04-20
Institutions: European Commission
Subjects: South Korea, generalised preferences, market protection, originating product, textile product

ill 
PS 

'•'.' •••:•:• •i.'f'iW^ 
" 
'• '•;'.'••:; "tm'iS 

COMMISSION OF THE EUROPEAN  COMMUNITIES 

m 

COM(94) 139 final 
Brussels,  20.04.1994 

94/0114 (ACC) 

Proposal  for a 

COUNCIL  REGULATION  (EC) 

suspending  the generalized  tariff  preferences for 
certain  products originating  in the Republic of Korea 

(presented by the Commission) 

Explanatory  Memorandum 

The  Republic  of  Korea  has  recently  decided  to  unilaterally  increase 
the  import  duties on  a certain  number  of  products,  with  effect  from 1 
January  1994.  The  European  Union  is  the  principal  supplier  to  the 
Korean  market  for  certain  products  affected  by  this  decision,  notably 
in the  textile sector. This action  is consequently  having  a direct  and 
detrimental  effect  on exports  from  the EU  to the Republic of Korea. 

Despite  many  attempts,  even  at  Ministerial  level,  to  dissuade  the 
Republic  of  Korea  from  taking  this  aggressive  measure,  the  Korean 
Republic  has nonetheless  taken  this action  as a means of  trade defence. 

Urgent  and  appropriate  measures  are  required  by  the  EU  to  respond  to 
the  Korean  decision  which  is  bound  to  have  a  significant  negative 
impact  on EU exports  to the Korean market. 

In  the  strict  legal  sense,  the  Korean  action  is not  contrary  to GATT. 
In fact,  the duties on  products  affected  by  the action  of  the Republic 
of  Korea  are  either  unbound  in  the  GATT  (80% of  the  Korean  tariff  is 
not  currently  bound), or  are  lower  than  the GATT  bound  rates,  thereby, 
strictu  sensu,  allowing  such  adjustments. Nevertheless,  by  taking  this 
action  just  when  the  Uruguay  Round  negotiations  have  been  concluded, 
and  taking  advantage  of  the  inevitable  transitional  period  before  the 
effective  implementation of  the results of  the negotiations,  the Korean 
Rapublic  is obviously  acting  contrary  to the spi r i t of  the GATT. 

By  taking  rapid  action,  the EU will  give  a clear  signal  that  this  type 
of  action  will  not  be  accepted,  in  particular,  when  it  is  taken  by a 
country  whose  per  capita  gross  domestic  product  is  similar  to  that 
enjoyed  by some  regions of  the European  Union. 

Therefore,  it seems necessary  to suspend, on a selective  basis, the GSP 
benefit  accruing  to  the Republic  of  Korea  for  certain  products. Taking 
in account  the type of EU exported  products principally  affected  by the 
Korean  measures,  and  the  volume  of  trade  involved,  it  would  appear 
appropriate  to suspend  the GSP  benefit  for  textile  products  covered by 
the Muitifibre Agreement. 

This  is the object  of  the attached  proposal. 

>1 

COUNCIL REGULATION  (EC) No. 

suspending  the generalized  tariff preferences  for certain 
products originating  in the Republic of Korea 

THE COUNCIL OF THE EUROPEAN UNION 

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

Having  regard  to the proposal  from  the Commission, 

whereas the generalized  scheme of preferences  has  for  1S94 been applied 
for  six  months  from  1 January  to 30 June  by  Council  Regulation  (EC) 
Mo,  3366/93 of  20 December  I S S ^D  and  will  be  automatically  extended 
until  31 Decemfcer  if no new scfceme has been agreed upon before'the date 
•f  t$ Jur»; 

wttefeas  the  Republic  of  Ko?e«  benefits  from  these  generalized  tariff 
preference*; 

whereas  the  ecftem» of  genera Uie«f  tariff  preferences  is an  autonomous 
Community scheme; 

«**#feas  the  Republic  ©f  More*  has  recently  iwple#»ented  unilateral 
measures which  have  resulted  in the  raising  of  applied  customs  duties, 
in particular  for  certain  products  for  wftich  the  European  Union  is a 
major  supplier  to the market  of  the Republic of Korea; 

whereas  this action  has  to be considered  as an aggressive  trade policy 
measure  having  a direct  and  detrimental  effect  on  the export  interests 
of  the  European  Union  to  the  Republic  of  Korea,  especially  in  the 
textile  sector;  whereas,  therefore,  it  is  inappropriate  that  products 
originating  in  the  Republic  of  Korea  and  covered  by  the  Arrangement 
regarding  International  Trade  in  Textiles  (MFA)  should  benefit  from 
the scheme of generalized  tariff  preferences, as  long as this situation 
continues, 

(1) O.J. L 338 of 31 December  1993, p. 22 

Z. 

HAS ADOPTED THIS REGULATION 

Article 1 

The preferences foreseen  by Council Regulation (EC) No. 3668/93 of 20 
December  1993(1),  shall  be  suspended  for  those  products  originating 
in  the  Republic  of  Korea  which  are  listed  in  Annex  I of  Council 
Regulation (EEC) No. 3832/90 of 20 December 1990<2>. 

Article 2 

This Regulation shall enter  into force on the 1 July 1994. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly 
applicable in all Member States. 

Done at Brussels,. 

1994. 

For the CounclI 

The President 

(1) O.J. L 338 of 31 December  1993, p.22 
(2) O.J. L 370 of 31 December  1990, p. 39 

COMMISSION  DECLARATION 

"The  Commission  declares  that  this  proposal  for  a  Council  Regulation 
does  not  constitute  a  precedent  and  that  it  has  been  made  as  an 
exceptional  response  to  trade  measures  taken  by  the  Republic  of  Korea 
which  are  seriously  prejudicial  to  European  Union  interests.  These 
measures  require,  in this  instance,  the  partial  suspension  of  Korea's 
GSP benefits." 

H 

ISSN 0254-1475 

COM(94) 139 final 

DOCUMENTS 

EN 

1102 

Catalogue number : CB-CO-94-146-EN-C 

ISBN 92-77-67612-4 

Office for Official Publications of the European Communities 
L-2985 Luxembourg 

r