Communication from the Commission to the Council - The extension of the International Grains Agreement 1995 and the negotiation of a successor Agreement
Date: 1997-12-16
Institutions: European Commission
Subjects: cereals, food aid, international agreement, international negotiations, international trade

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  16.12.1997 
COM(97)717  final 

COMMUNICATION  FROM THE COMMISSION  TO THE COUNCIL 

THE EXTENSION  OF  THE INTERNATIONAL GRAINS AGREEMENT  1995 
AND  THE NEGOTIATION  OF A SUCCESSOR  AGREEMENT 

THE EXTENSION OF THE INTERNATIONAL GRAINS AGREEMENT. 1995 
AND  THE NEGOTIATION OF A SUCCESSOR AGREEMENT 

I  Explanatory Memorandum 

1.  The  International  Grains  Agreement,  1995,  is  made  up  of  two  parts:  the  Grains 

Trade Convention,  1995 and the Food Aid Convention,  1995. 

2.  The European Community, as well as Member States individually, are parties to the 

Agreement and members of both Conventions. 

3.  Both Conventions must be extended or replaced as from  1  July  1998. Extension may 
be  affected  simply  by  decisions  of  the  International  Grains  Council  and  the  Food 
Aid  Committee.  Replacement,  on  the  other  hand,  requires  negotiation  of  a  new 
Agreement and new conventions. 

4.  During a series of informal  meetings of members of the Conventions, it has emerged 
that  there  is  a preference  for  an  extension  of  both  Conventions  for  a  year.  1 July 
1998  including  30  June  1999 and  the  negotiation  of  new  Conventions  during  that 
period. 

5. 

It is intended that negotiations should take place during this period in order to agree 
the  texts  of  the  new  conventions.  The  Commission  should  participate  in  that 
negotiating work on behalf of the European Community. 

//  Objectives with regard to the extension of the Agreement 

6. 

It  is  intended  that  the  International  Grains Agreement  will  be  extended  for  a year: 
1 July  1998 including 30 June 1999. 
The two separate legal instruments which form these Agreement will accordingly be 
extended for the same period. 
Therefore each of the two Conventions shall be extended as follows: 

a)  The Grains Trade Convention  1  July  1998 including 30 June 1999 

b) The Food Aid Convention  1  July 1998 including 30 June 1999 

III.  Objectives with regard to the negotiation of a new International Grains Agreement 

7.  Grains Convention from  1  July  1999 onwards 

The majority  of the provisions  contained  in the new Grains Convention  will  be the 
same  in  substance  as  those  contained  in  the  current  Convention,  therefore  no 
substantial modifications  are to be foreseen. 

8.  Food Aid Convention from  1  July  1999 onwards 

The Convention could be amended along the following lines: 

1) To  bring  the  Food  Aid  Convention  in  line  with  thinking  on  Food  Aid  as  we 

approach the millennium. 

2)  To meet the perceived need for a Food Aid Code of Conduct. 

Z 

3)  To  meet  the  need  for  a  reaction  to  the  Singapore  decision  and  the  Marrakech 

declaration. 

IV. Financial implications 

9.  The EC-15 contribution to the administrative budget,  shown under item B2-5160 of 
the  European  Union  budget,  in  principal  will  remain  unchanged  and  at  any  event 
will  not  exceed  the  present  level.  On the  contrary,  a reduction  of  the  contribution 
could be envisaged in case of new accessions to the Convention. 

V.  Conclusions 

10.  The  Commission  proposes  to  the  Council  to  authorise  the  Commission  to  vote  on 

behalf of the European Community. 

a)  according  to  Article  33  §  2  of  the  Grains  Trade  Convention  in  favour  of  the 
extension of this Convention for the period from 1  July  1998 to 30 June 1999; 

b)  according to Article XXII  § 2 of the Food Aid Convention  1995 in favour  of the 
extension of this Convention for the period from  1  July  1998 to 30 June 1999. 

11.  The  Commission  recommends  to  the  Council  to  authorise  the  Commission  to 
negotiate  a  successor  agreement  to  the  International  Grains  Agreement,  1995  and 
decide  that  the  negotiations  shall  be  conducted  in  consultation  with  the  special 
committee  provided  for  in  Article  113  of  the  treaty  and  in  accordance  with  the 
attached negotiating directives". 

NEGOTIA TION  DIRECTIVES 

A) Grains Convention 

The Grains Convention has been substantially modified  in  1995. Therefore there are 
no  important  changes  foreseen  for  the  future  Convention.  A  change  in  the 
depository  Body  could  be  examined  in  order  to  establish  a  better  link  with  the 
World Trade Organisation. 

B) Food Aid Convention 

1) Incorporation of the proposed Food Aid Code of Conduct into the Convention 

2)  Widening coverage of the Convention to cover all products found  in a traditional 
food  aid food  basket.  Widening coverage should not solely be based on the wish 
to  encourage  new  donors  to join  the  Convention.  Beneficiary  needs  must  come 
first. 

3) Limiting the Convention to grant food aid. 

4)  Limiting  countries  eligible  as  destinations  under  the  Convention  to  least-
developed countries and low-income countries with a structural food  deficit. 

5) Making clear provision for all forms of food aid to be eligible for inclusion under 
the  Convention,  including  triangular  purchases,  local  purchases,  provision  of 
foreign exchange for food purchases. 

6) Making it easier for other donors to join the Convention, enlarging also the range 
of products  by reducing  the  minimum  commitment  level. Attention  needs  to  be 
given  to  the  desirability  of  opening  the  Convention  too  widely  and  how  this 
could affect  the current consensus approach to decision-making. 

FINANCIAL  STATEMENT 

BUDGET HEADING: B2 - 516 

Date: 
APPROPRIATIONS: 

2. 

TITLE: Communication  to  die Council  regarding  EC participation  in negotiation  work  on a  New 
Agreement to replace the International  Grains Agreement,  1995. 

3. 

LEGAL BASIS: treating establishing the European  Community, particularly  Article  113. 

4. 

AIMS: Authorization  for the Commission  to participate  in the negotiation of a new  agreement 

FINANCIAL  IMPLICATIONS 

5.0 

EXPENDITURE 
-  CHARGED TO THE EC BUDGET 
(REFUNDS/INTERVENTION) 

-  NATIONAL  AUTHORITIES 
-  OTHER 

5.1. 

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

-  NATIONAL 

5.0.1 
5.1.1 
5.2 

ESTIMATED  EXPENDITURE 
ESTIMATED  REVENUE 
METHOD OF CALCULATION: 

PERIOD OF 12 
MONTHS 

(ECU million) 

CURRENT 
FINANCIAL 
YEAR 
(97) 
(ECU million) 

FOLLOWING 
FINANCIAL 
YEAR 
(98) 
(ECU million) 

1998 
430,500 

1999 
430,500 

2000 
430,500 

2001 
430,500 

Calculation  based  on  experienced  of budgetary  policy  of the Intemation Grains  Council  in recent  years, as  well 
as the new calculation  of contnbutionss  that have been fixed  by the agreement  negotiated  in  1995. 

6.0 

6.1 

CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 
RELEVANT CHAPTER OF THE CURRENT BUDGET? 

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

6.2 

WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 

6.3  WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? 

OBSERVATIONS: 

YES/NO 

YES/NO 

YES/NO 

YES/NO 

The amount  indicated  cover the participation  of the EC to the administrative  budget of the  Agreement. 

ISSN 0254-1475 

COM(97) 717  final 

DOCUMENTS 

EN 

02  03  04  11 

Catalogue number  :  CB-CO-97-739-EN-C 

ISBN  92-78-29767-4 

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