Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) on measures to promote and provide information on agricultural products in third countries'
Date: 1999-04-29
Institutions: European Economic and Social Committee
Subjects: EC Regulation, agricultural product, proposal (EU), sales promotion, third country, trade information

C 169/8

EN

Official Journal of the European Communities

16.6.1999

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation (EC)
on measures to promote and provide information on agricultural products in third countries’

(1999/C 169/04)

On 1 April 1999 the Council decided to consult the Economic and Social Committee, under Articles 43
and 198 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 9 April 1999. The rapporteur
was Mr Espuny Moyano.

At its 363rd plenary session of 28 and 29 April 1999 (meeting of 29 April 1999) the Economic and
Social Committee adopted the following opinion by 78 votes to three, with nine abstentions.

1.

Introduction

1.1.
The proposal for a regulation creates a Community
instrument for the promotion of agricultural products in third
countries, through the total or partial Community funding of
measures that promote or provide general information about
such products. The measures, which are based on principles of
subsidiarity and complementarity, will help to consolidate the
image of Community products by giving added value to those
measures already taken by the national authorities and the
economic operators concerned.

The proposal for a regulation is limited to the drawing

1.2.
up of general criteria for the selection of:

1.2.1.
products likely to benefit from this promotional
instrument of the Community, i.e. products intended for direct
consumption or processing where there are potential markets
and, in particular, where no export refunds are required; and
typical or quality products manifesting high added value.

1.2.2. markets of third countries where measures promot-
ing and providing information about Community agricultural
products are planned, i.e. markets where there is significant
actual or potential demand.

Implementation of the promotional and information

1.3.
campaigns will be carried out over three basic phases:

Every two years the Commission will select eligible
1.3.1.
products and markets based on procedures involving the
Management Committees responsible for the sectors con-
cerned. Consultation of the Standing Group on the Promotion
the Advisory Committee on
of Agricultural Products of
Agricultural Product Health and Safety will be optional.

1.3.2.
The Commission will also have the task of approving
the concrete promotional and information programmes pro-
posed by the trade or inter-trade bodies representing the sector
or sectors concerned and with the prior approval of the
Member States concerned. The Commission will only be
able to approve the programmes after it has informed the
Management Committees of the sectors in question and, where
appropriate, after consulting the Advisory Committee on
Agricultural Product Health and Safety.

The tasks of managing and implementing the selected
1.3.3.
measures will, on the basis of an open or restricted invitation
to tender, be assigned by the Commission to a body or
bodies with specialist knowledge of the products and markets
concerned, and with sufficient resources to implement the
measures. As far as the olive oil sector is concerned, a provision
explicitly enables the International Olive Oil Council to carry
out this task.

1.4. With the exception of certain specific measures to be
financed 100 % by the Community, the other measures would
be part-financed as follows:

The Community’s contribution would not exceed
1.4.1.
50% of the real cost of the measures, with a degressive rate
falling from 60 % to 40 % in the case of multiannual
programmes.

1.4.2.
would not exceed 20 %.

The contribution of the Member States concerned

the real cost of

The remaining balance of

the
1.4.3.
measures would be borne by the private organization or
organizations promoting the campaign. In certain duly justified
cases, where the programme concerned is clearly of Com-
munity interest,
the private organizations promoting the
campaign might bear that part of the funding covered by the
Member States.

1.5.
The proposal for a regulation stipulates that every two
years the Commission shall present to the Council and to
Parliament a report on the application of
the proposed
measures.

Finally, the amount charged to the EC budget for the
1.6.
Community’s financial contribution will be 15 million EUR
annually for the period between the years 2000 and 2003.

2. General comments

2.1.
The ESC welcomes this initiative at a time when the
Common Agricultural Policy is going through a critical phase,
with radical changes needing to be completed within the next
few years.

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2.2.
These changes, which are designed to put the finishing
touches to the European Union’s new agricultural and agri-
food model, will need to focus on bolstering the central pillars
of that model, including the Union’s role as an exporter of
agri-food products.

2.3.
To achieve this, it is necessary to improve the competi-
tiveness of Europe’s agricultural and agri-food sector both
within the single market and in non-EU countries and to
maintain the reputation Europe has acquired over recent times
for being a world agricultural leader.

2.4.
The Committee supports the idea that one of the best
ways of maintaining and improving Europe’s position is to
support its export drive. Support is needed for the following
reasons:

2.4.1.
European agricultural, agri-food and forestry prod-
ucts undoubtedly offer wide variety and high quality, which is
an excellent reason why they should be promoted and why
their consumption should be encouraged in third countries.

2.4.2.
All countries in the world, and especially our leading
commercial partners and competitors (USA, Japan, Canada...),
have a long-standing policy of actively promoting their
products.

Product-promotion policies are neutral in the eyes of
2.4.3.
the World Trade Organization (WTO) and would undoubtedly
help the European Union to foster the image and quality of
our products on international markets.

2.4.4.
subsidies under the Marrakesh Agreement.

There is also a general tendency to reduce export

Finally, the promotion of EU agricultural, agri-food
2.4.5.
and forestry products in third countries would be a way of
backing Member States’ own export campaigns and this
would be consistent with the principles of subsidiarity and
complementarity.

2.5.
If the European Union wishes to effectively step up its
exports of Community agricultural, agri-food and forestry
products,
it is essential that its promotional activities are
complementary to, and co-ordinated with, action already taken
by Member States, agricultural organizations and their own
enterprises in third countries. Only in this way will
it be
possible to develop a common approach that takes advantage
of synergies and provides added value. With this in mind,

2.5.1.
subsidiarity and complementarity must be the lead-
ing principles guiding the Community’s promotion of agricul-
tural products in third countries.

2.6.
Finally, we would emphasize that although public
Community and national levels all have a role to play, it is
ultimately the private component of product promotion that
holds the key. The general campaign to promote agricultural
products, which is supported both by the Union and by the
Member States, in fact needs to be complemented by private
investment, which means taking the promotion of individual
product brands to be the keystone of the whole edifice.

2.7.
Finally, the Committee considers that it is essential
for the Community to set aside the necessary funds if its
promotional policy is, with a minimum degree of effectiveness,
to achieve the objective of improving the competitiveness of
Community agricultural products. The Committee notes with
disappointment, however, that the Commission’s proposed
budget is clearly inadequate.

3. Specific comments

(Article 1(2)); however,

3.1. Measures to promote or provide information on
agricultural products ‘shall not be directed towards particular
brand names’
in the interests of
complementarity and the effectiveness of the multiplier effect
derived from combining Community action with national and
private initiatives, such a provision must not automatically
result in the exclusion of general measures forming part of
more extensive promotional programmes that include brand
components and are, in the last analysis, the ultimate objective
of promotional activities.

3.2.
The measures set out in Article 2 of the proposal
coincide to a large extent with traditional, generally accepted
policy instruments for product promotion. The ESC neverthe-
less considers that the following points should be included to
clarify and complete the list:

3.2.1.
The ESC approves the intention to focus Community
action on the provision of general and common information
on the quality, hygiene and food safety aspects of European
products, but we should not forget at the same time to also
disseminate the cultural values inherent in such products.

The market studies referred to in Article 2(e) should
3.2.2.
not only aim to provide a more accurate picture of third-
country demand, they should also analyse distribution chan-
nels and the conditions governing access to markets and
related problems (tariff and non-tariff barriers, tax systems,
investment arrangements, etc.).

3.2.3.
The promotion of workshops, meetings and seminars
intended for selected target groups (importers, retailers, doc-
tors, restaurant owners, the specialised press....) as well as other
opinion-formers, in order to inform them of the virtues of EU
agri-food products.

3.2.4.
buyers to the Community.

Sending sales representatives abroad and inviting

2.5.2.
the initiative should be pursued on the basis of the
co-financing principle since this makes it possible not only to
pool financial resources but ensures, in the interests of effective
action, that all the parties concerned are involved and shoulder
their responsibilities.

Although ‘studies to evaluate the result of

3.2.5.
the
promotional and information measures’ (Article 2(g)) are an
adequate instrument for testing the effectiveness of measures,
they are not promotional measures in the strict sense of the
term. The ESC proposed instead that sufficient funds be set

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aside to pay for an independent enquiry into the effectiveness
of the results of the programmes. Because of this — and in
any case — the budget allocated to this regulation needs to be
higher than the funding level proposed by the Commission.

3.3. With regard to the criteria for choosing suitable third
countries (Article 4), particular consideration should be given
to markets where there is actual or potential demand and
where promotional activities are already being carried out by
the Member States and their economic operators in order to
facilitate and consolidate market penetration there. In the case
of developing countries, promotional activities should always
be sensitive to the need for endogenous development and
preference should be given to EU products that are comp-
lementary to, rather than identical with, home-grown products.

Given the co-financing arrangements proposed by the
3.4.
Commission, it is vitally important for the Member States, and
the private organizations located in the Member States, to be
actively involved in the decisions regarding the selection of
products and markets (Article 5), programmes (Article 7), and
the bodies responsible for managing and implementing the
measures and evaluating the results (Article 8). To this end the
ESC proposes:

3.4.1.
that an ad hoc, horizontal Management Committee
for Product Promotion be set up, which would a) guarantee
the involvement of national experts competent in the pro-
motion of agricultural products in third countries, and b) aim
to ensure that Community action is coherent and co-ordinated;

3.4.2.
that consultation of the Standing Group on the
Promotion of Agricultural Products of the Advisory Committee
on Agricultural Product Health and Safety be mandatory and
not just optional, as the Commission proposes.

3.5.
The ESC endorses the provision whereby the Com-
munity may carry out promotional work in the olive oil and
table olive sector through the International Olive Oil Council,
given the excellent results achieved by this body to date. The
ESC calls upon the Commission to consider the case for also
using the International Olive Oil Council for promotional
work within the EU.

The ESC supports the co-financing proposal of the
3.6.
Commission, especially since a financial commitment on the
part of economic operators is a means of ensuring their active
participation, the proper use of financial resources, and the

Brussels, 29 April 1999.

effective achievement of promotional objectives. However, the
financial participation of Member States may, if appropriate,
be optional.

is that

the instrument

Finally, convinced as it

3.7.
in
question has an important role to play in improving the
competitiveness of European agricultural products, the ESC
considers that the budget is too small to achieve the proposed
objectives, especially if one takes into account the budget
savings stemming from the reduction of export subsidies. In
view of these circumstances,

the ESC calls upon the Commission, Parliament and
3.7.1.
Council to make an effort to increase the level of funding
provided that this is not detrimental to the current funding of
promotional activities within the European Union.

the ESC is convinced that the periodic assessment of
3.7.2.
the results of applying this regulation will lead to a sustained
increase in funding.

4. Final considerations

4.1.
The promotion of EU agri-food products in third
countries is going to have to play an important role in the
revamped Common Agricultural Policy if we wish to see the
Union continuing to play a leading role in world agricultural
markets.

4.2.
Given the current and future restrictions imposed by
GATT, the sector will only increase its competitiveness if
flexible, modern and adequately funded instruments — similar
to those already employed by our principal competitors — are
employed in opening up new outlets in third countries.

EU-Member State complementarity and subsidiarity
4.3.
are the golden rules for common action of any description. It
therefore makes sense for the Community authorities, national
authorities and trade organizations to run this initiative in
common, working in a co-ordinated fashion to maximise its
benefits.

4.4.
The involvement of the private sector is essential at the
stages of planning, devising and financing programmes and
actions. This financial commitment is not only a guarantee of
involvement,
it is also a way of ensuring achievement of
the ultimate objective — support for European products,
specialities and typical, high-quality brands.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

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APPENDIX

to the opinion of the Economic and Social Committee

The following amendment to the Section opinion was defeated.

Point 4.1

Add after ‘the promotion of EU agri-food products in third countries’ the words: ‘, in addition to export refunds’.

Reason

The European Parliament adopted an amendment in plenary session to the effect that the European Commission
should study the possibility of dismantling export refunds and of employing some of the resources freed up by this
for promotional purposes.

Although the European Commission has already responded negatively to this amendment, it is important for the
ESC to take a stand on this, and to emphasise the importance of the two instruments, which are entirely separate but
complementary, and of an active European export policy, consisting of export refunds and promotional measures.

Result of the vote:

For: 27, against: 31, abstentions: 32.