Proposal for a COUNCIL DECISION Concerning the conclusion of the results of consultations with Thailand under GATT Article XXIII
Date: 1996-03-13
Institutions: European Commission
Subjects: GATT, Thailand, import, rice, starch, tariff quota

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

Brussels,  13.03.1996 
COM(96) 107  final 

96/ 0081 (ACC) 

Proposal  for  a 

COUNCIL  DECISION 

Concerning the conclusion of the results of consultations with Thailand under- GATT 
Article  XXIII 

(presented  by  the  Commission) 

EXPLANATORY  MEMORANDUM 

The Commission has now concluded the current consultations with Thailand, under GATT 
Article  XXIII,  concerning  the  EC's  import  regime  for  rice.  The  results  of  the 
consultations are contained  in an agreement in the form of an exchange of letters between 
the European  Community  and  Thailand. 

The agreement  may  be summarized  as follows  : 

-  The EC and Thailand  agree to suspend the current consultations under Article 

XXIII  of the GATT. 

The  EC  would  open  an  additional  autonomous  annual  TRQ  of  10.500  t  of 
manioc  starch,  of  which  10.000  t  would  be  allocated  to  Thailand.  The  in-
quota rate would be the prevailing MFN rate reduced by  100 Ecu t.  The same 
in-quota rate would apply to the existing TRQ's for  manioc starch.  The end-
use requirements  would  be waived. 

-  The EC would  open a TRQ of 80.000 t of broken rice, of which 41.600 t will 
be allocated to Thailand.  The in-quota rate would be the prevailing MFN rate 
reduced  by 28  Ecu  t. 

- 

In  addition,  the  agreement  also  foresees  the  possibility  for  the  partners  to 
review jointly  the  functioning  of  the  representative  price  system.  However, 
both parties consider that such a review should not be necessary before  1998. 

Both parties would  not exercise their  WTO rights so long as the annual  tariff 
quotas are open and remain effective  for  the year concerned.  However,  by a 
two-month notice prior to the end of the quota year each party may resume the 
consultations  or  revoke the tariff  concessions. 

i 

Proposal  for  a Council  Decision 

Concerning the conclusion of the results of consultations with Thailand under GATT 
Article  XXIII 

The Council  of the European  Union, 

having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  113, in conjunction  with Article  228 (2), first  sentence thereof, 

having regard  to the proposal  from  the  Commission, 

whereas the Community  has entered  into consultations under  GATT Article XXIII  with 
Thailand  on the Community's  import  regime  for  rice, 

whereas the result of these consultations are contained  in an agreement  in the form  of an 
exchange  of letters, 

whereas  it is in the  interest of the Community  to approve this agreement, 

has decided  as follows  : 

Article 1 

1.  The  agreement  in  the  form  of  an  exchange  of  letters  between  Thailand  and  the 
European Community on rice and manioc starch  is hereby approved on behalf of the 
Community: 

2.  The text of the agreement  referred  to  in this Article  is attached  to this  Decision. 

3.  The President of the Council is hereby authorised to designate the person empowered 

to sign the agreement  in order to bind  the  Community. 

Article 2 

The Commission shall adopt the detailed rules as regards the tariff  rate quotas for  broken 
rice  and  manioc  starch  in  accordance  with  the  procedure  laid  down  in  Article  23  of 
Council Regulation (EEC) No. 1766/92 of 30 June  1992 on the common organization of 
the market  in cereals. 

Done at Brussels, 

For the Council 
The  President 

3 

Exchange  of  letters  on  Consultation  under  Article  XXIII  on  Rice 

Excellency, 

I have the honour to confirm  the understanding  reached between the Kingdom of  Thailand 
and  the  European  Community  on the European  Community's  tariff  quotas on broken  rice 
and  manioc  starch  to  be  effective  from  1 April  1996  as  appeared  in  the  note  annexed  to 
this  Exchange  of  Letters. 

In addition  to the above understanding, the two parties further  agree that they  shall  review 
jointly,  at  the  request  of  either  party,  the  functioning  of  the  "representative  price"  system 
for  rice. 
If  it  appears  to  either  party  that  the  functioning  of  the  system  is  materially 
impeding  trade  flows  between  the parties, the Commission  of the  European  Communities 
in  consultation  with  the  Government  of  the  Kingdom  of  Thailand  shall  examine 
significant  problems  identified  with  a  view  to  implementing  appropriate  solutions.  It  is 
the  expectation  of  the  two  parties  that  such  a  review  should  not  be  necessary  before  the 
year  1998. 

On  the  basis  of  the  above  understanding  and  agreement,  the  two  parties  agree  to  suspend 
the  current  consultations  under  Article  XXIII  of  the  GATT  1994. 

The  aforementioned  suspension  agreement  and  the  annex  appertaining  thereto  shall  be 
without  prejudice  to  the  rights  and  obligations  of  either  party  under  the  World  Trade 
Organization  (WTO).  However,  both  parties  will  not  exercise  their  rights  so  long  as  the 
annual  tariff  quotas  are  opened  and  remain  effective  for  the  year  concerned;  the  party 
exercising  the  right  will  give  a  two-month  notice  prior  to  the  end  of  the  relevant  quota 
year. 

This  letter  and  Your  Excellency's  identical  letter  shall  constitute  the  agreement  between 
the  two  parties  on  the  suspension  of the  current  consultations  under  Article  XXIII  of  the 
GATT  1994. 

Accept,  Excellency,  the  assurances  of  my  highest  consideration. 

Note on Tariff  Quotas 

Excellency, 

Following the discussions to further  the common interest of the European Community and 
the Kingdom of Thailand, the following understanding between the European Community 
and  the Kingdom  of Thailand  has been reached,  effective  from  1 April  1996 : 

1.  Manioc  Starch 

(a)  An  additional  autonomous  annual  TRQ of  10,500  t.  will  be opened  by 
the  European  Community  of  which  10,000  t.  will  be  allocated  to 
Thailand. 

(b)  The in-quota rate for this additional  autonomous annual TRQ will be the 

prevailing  MFN  rate reduced  by  100 Ecu/t. 

(c)  The  in-quota  rate  for  the  two  TRQs  for  manioc  starch  included  in the 
schedule  of the  European  Community,  to be applied  on an  autonomous 
basis, will  be the  prevailing  MFN  rate reduced  by  100 Ecu/t. 

(d)  The European Community  will, on an autonomous basis, waive the end-

use requirements  for  these three TRQs. 

2.  Broken Rice 

(a)  A  new  annual  TRQ  of  80,000  t.  will  be  opened  by  the  European 

Community  of which  41,600t.  will be allocated  to  Thailand. 

(b)  The in-quota rate will be the prevailing MFN rate reduced  by 28 ECU/t. 

To the extent that the TRQs are allocated  to Thailand, the European  Community  import 
licenses  will  be  issued  automatically  within  the  agreed  limits  on  the  basis  of  export 
certificates  issued  by the Government  of  Thailand. 

ç 

FINANCIAL  STATEMENT 

Section  1. 

Financial  Implications 

1. 

2. 

3. 

4. 

5. 

6. 

Proposal  for  a  Council  Decision  concerning  the  conclusion  of  the  results  of 
consultations  with  Thailand  under  GATT  Article XXIII. 

Budget  heading: 

(loss of  revenue:  not  known) 

Legal  basis: 

Article  113 

Description:  Opening  of  tariff  rate  quotas  for  manioc  starch  and  broken  rice. 

Type of revenue: 

Loss of  revenue  for  duties paid  on third  country  imports. 

Change  in  level  of revenue: 

The maximum  loss of  revenue  will  be in the order  of  3,5  MECU  per  year. 

Q 

ISSN  0254-1475 

COM(96)  107  final 

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Catalogue number  :  CB-C0-96-115-EN-C 

ISBN 92-78-01633-0 

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