Proposal for a Council Decision concerning the approval of a Memorandum of Understanding between the European Community and the Dominican Republic on import protection for milk powder in the Dominican Republic
Date: 1998-06-11
Institutions: European Commission
Subjects: Dominican Republic, import policy, powdered milk, tariff quota, trade agreement (EU)

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  11.06.1998 
COM(1998) 378  final 

98/0211 (ACC) 

Proposal for a 

COUNCIL  DECISION 

concerning the approval of a  Memorandum of Understanding 
between the European Community and the Dominican  Republic 
on import protection for milk powder in the Dominican  Republic 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

1. 
At  the  end  of  1994  the  Dominican  Republic  (DR)  submitted  a  request  for 
rectification  of  its  Marrakech  list  for  8 tariff  concessions,  of  which  only  one  (milk 
powder)  was  of  an  economic  interest  to  the  Community.  The  DR,  as  a  developing 
country, has claimed that it had not understood the "tariffication  process" used during 
the  Uruguay  Round  negotiations  for  converting  non-tariff  barriers  into  ordinary 
customs duties. 

The Community  has been the first supplier of milk powder to the DR for the last many 
years. 

2. 
In the Marrakech list the DR had bound all agricultural products at a ceiling of 
40%. The proposal for rectification  included creation of a tariff  rate quota with an in-
quota-rate  of 20% as "compensation" for  the introduction  of a proposed  duty  rate of 
102%. 

Over  the  last  three  years  several  meetings  have  taken  place  between  the 
3. 
Commission services and the DR, which is a Member of the Lomé Convention, with a 
view to arriving at a mutually satisfactory  solution on this issue. 

4. 
The result  of the discussions  between  the Commission  and the DR  is that  the 
DR has  offered  a tariff  quota  of 32.000 tonnes  of which  70% would  be reserved  for 
the Community.  The Community  will manage  its share of the tariff  quota  according 
to a mechanism  of export  licences as established  by Community  regulations.  The in-
quota-duty-rate  is  20%,  whereas  the  out-of-quota-duty-rate  in  the  first  year  will  be 
84%, which will be reduced to 56% over 7 years. 

It  is the  Commission's  general  view that  an  agreement  on the  lines  indicated 
5. 
above  is preferable  to  leaving  the DR with the  alternative  of  opening  GATT  Article 
XXVIII negotiations, from which the Community has little to gain. 

6. 
The purpose of this proposal is to ask the Council to approve the result as laid 
down  in  the  Memorandum  of  Understanding  attached  to  the  proposed  Decision 
(annex A). 

z. 

Proposal-for a 

COUNCIL  DECISION 

of.. 

concerning the approval of a  Memorandum  of Understanding 
between the European Community and the Dominican Republic 
on import  protection  for Milk powder in the Dominican  Repub'k 

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  Dominican  Republic  have  requested  a  rectification  of  its  Marrakech  list  for  8  tariff 
concessions, of which only one (milk powder) is of an economic interest to the Community, 

Whereas the Dominican  Republic have offered  a tariff quota of 32.000 tonnes of which  70% would be 
reserved for the Community, 

Whereas the Community  will  manage  its share of the tariff  quota according to a mechanism  of export 
licenses as established by Community regulations 

HAS ADOPTED THIS  DECISION 

Article I 
The  Memorandum  of  Understanding  between  the  European  Community  and  the  Dominican  Republic 
on import protection  for  milk powder  in the Dominican  Republic is hereby  approved  on behalf  of ihe 
Community. 

The text of the Memorandum of Understanding is attached to this Decision 

Article 2 
The  President  of  the  Council  is  hereby  authorised  to  designate  the  person  empowered  to  sign  the 
Memorandum of Understanding in order to bind the Community. 

S 

Article 3 
The Commission  shall, in accordance with the procedure laid down in Article 30 of Council  Regulation 
(EEC)  No.  804/68  of  27  June  1968  on  the  common  organisation  of  the  market  in  milk  and  milk 
products1,  adopt  detailed  rules  for  the  implementation  of  paragraph  3  of  the  Memorandum  of 
Understanding as referred  to in Article 1. 

This decision shall be published in the Official  Journal of the European Communities. 

Article 4 

Done at Brussels, 

For the Council 

OJ N° L 148, 28.6.1968, p.  13.  Regulation as last amended by Regulation (EC) N° 1587/96 
(OJ No L 206,  16.8.1996, p. 21 ) 

V 

ANNEXA 

X 

MEMORANDUM OF UNDERSTANDING 

Schedule XXIII 
Part I - Tariff for the Most Favoured Nation 
Section 1-B: Tariff Quota 

1.  The  Government  of 

this 
Memorandum of Understanding its Agricultural  Schedule (Schedule XXIII annex to 
the Protocol of Marrakech) in order to include the following Tariff Quota: 

the  Dominican  Republic  will  rectify 

following 

Description of Product: 

Powder mill 

Tariff heading (HS) Number: 

Applicable tariff: 

Base rate: 

Bound rate: 

Size of Tariff Quota: 

Period of Application: 

0402.10 
0402.21 
0402.29 

20% 

84% 

56% 

32,000 M/T 

1998-2004 

2.  The Tariff  Quota established by this Agreement will be distributed among suppliers 
according to Article XIII of the General Agreement on Tariffs  and Trade (GATT 94) 
in the following way: 

European Community 

22,400 M.T. 

New Zealand 

Other suppliers 

4,800 M.T. 

4,800 M.T. 

70% 

15% 

15% 

TOTAL 

32,000 M.T. 

100% 

3.  The European Community  will manage its share of the Tariff  Quota according to a 
mechanism  of  export  licenses  as  established  by  the  European  Community 
regulations. 

4.  Any WTO Member can participate in the Tariff Quota as "other supplier". 

5.  The European  Commission  will  inform  the Dominican  Republic  of any  existing  or 
foreseen  difficulty  in supplying the European Community's share of the tariff quota, 
ïf  the  European  Community  cannot  supply  its  share  of  the  tariff  quota  allocated 
through  this  agreement,  the  Dominican  Republic  will  have  the  rieht,  after 

€ 

notification  two  months  in  advance  to  the  European  Community,  to  reallocate  the 
unused  quantity  of  the  tariff  quota  among  other  suppliers  if the  supply  problem  is 
not resolved  in that period.  It is understood  that this provision  will  not  be used  in 
order to impair the European Community's possibilities of continuing to supply the 
products it was supplying during the years prior to this agreement. 

6.  The  Dominican  Republic  does  not  intend  that  the  introduction  of  this  Agreement 
should  have  the  effect  of  artificially  constraining  supply  and  therefore  increasing 
prices  on  its  domestic  market.  It  will,  therefore,  keep  its  market  situation  under 
review  and  will,  as appropriate,  make  increases  in the tariff  quota  consistent  with 
this objective. 

7.  As  well,  through  this  Agreement  it  is  established  that  the  Rectification  of  the 
Schedule XXIII, as previously described in the first paragraph of this Memorandum, 
is  valid  from  year  1998  (the  fourth  year)  of  the  commitments  established  by  the 
Uruguay Round. 

8.  The Dominican  Republic will implement its Agricultural  Schedule (Schedule XXIII 
annex  to  the  Protocol  of  Marrakech)  including  the  rectification  as  per  this 
Memorandum.  The tariff  quota will operate on a  1  July-30 June basis.  Transitional 
arrangements  will  apply  in  respect  of  1998/99  if  the  new  arrangement  enters  into 
force after  1 st July. 

For the Dominican Republic 

For the European Community 

ISSN 0254-1475 

COM(98) 378 final 

DOCUMENTS 

EN 

03  11  10  02 

Catalogue number  :  CB-C0-98-388-EN-C 

ISBN 92-78-37204-8 

Office  for Official  Publications of the European Communities 

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