Proposal for a Council Decision on the conclusion of an Agreement in the form of an exchange of letters between the European Community and the United States of America relating to the modification of concessions with respect to cereals provided for in Schedule CXL annexed to the GATT 1994
Date: 2002-12-11
Institutions: European Commission
Subjects: Canada, GATT, United States, agricultural trade, cereals, ratification of an agreement, tariff quota

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 11.12.2002
COM(2002) 731 final

2002/0293 (ACC)
2002/0294 (ACC)

Proposal for a

COUNCIL DECISION

on the conclusion of an Agreement in the form of an exchange of letters between the
European Community and the United States of America relating to the modification
of concessions with respect to cereals provided for in Schedule CXL
annexed to the GATT 1994

Proposal for a

COUNCIL DECISION

on the conclusion of an Agreement in the form of an exchange of letters between the
European Community and Canada pursuant to Article XXVIII of GATT 1994 for the
modification of concessions with respect to cereals provided for in EC Schedule CXL
annexed to the GATT 1994

(presented by the Commission)

1.

2.

3.

4.

5.

EXPLANATORY MEMORANDUM

On 26 July 2002, the Council authorised the Commission to notify the WTO that the
European Community  intended to modify  concessions on  items  1001 10 50  (durum
wheat),  1001 90 95  (spelt,  common  wheat  and  meslin,  except  spelt  for  sowing)
1002 00 00  (rye),  1003 00 50  (barley),  1005  (maize,  except  hybrid  seeds),
1007 00 90 (grain sorghum, except hybrids for sowing) included in Schedule CXL of
the European Community annexed to GATT. Accordingly, the European Community
has notified the WTO on 26 July 2002 of its intention to modify certain concessions
in EC Schedule CXL (circulated in G/SECRET/15).

Negotiations  have  been  conducted  by  the  Commission  in  consultation  with  the
133 Committee and within the framework of the negotiating directives issued by the
Council.

The  Commission  has  negotiated  with  the  United  States  of  America,  the  WTO
Member  having  a  principal  supplying  interest  in  items  1001 90 95  (spelt,  common
wheat and meslin, except spelt for sowing) and 1003 00 50 (barley), an agreement in
the  form  of  an  exchange  of  letters  which  will  lead  to  the  modification  of  certain
concessions in European Communities Schedule CXL.

The exchange of letters was paraphed by the Commission on 12 November 2002.

This proposal asks the Council to approve the agreement in the form of an exchange
of letters between the European Community and the United States of America.

The  application  of  this  agreement  provides  otherwise  than  certain  provisions  of
Council  Regulation  (EEC)  No  1766/92,  which  therefore  needs  to  be  modified.  In
order to ensure the application of this agreement from 1 January 2003, this decision
enables the Commission to derogate from the provisions concerned for a transitional
period,  i.e.  until  the  modification  has  entered  into  force,  but  not  later  than  30  June
2003.

The  Commission  will  present  a  proposal  for  the  necessary  modification  to  the
Council Regulation at the same time.

2

2002/0293 (ACC)

Proposal for a

COUNCIL DECISION

on the conclusion of an Agreement in the form of an exchange of letters between the
European Community and the United States of America relating to the modification
of concessions with respect to cereals provided for in Schedule CXL
annexed to the GATT 1994

THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular
Article 133 in conjunction with the first sentence of the first subparagraph of Article 300(2)
thereof,

Having regard to the proposal from the Commission1,

Whereas:

(1) 

(2) 

(3) 

(4) 

(5) 

1

2

On 26 July 2002, the Council authorised the Commission to open negotiations under
Article  XXVIII  of  the  GATT  1994  with  a  view  to  modify  certain  concessions  for
cereals. Accordingly, the European Community notified the WTO on 26 July 2002 of
its  intention  to  modify  certain  concessions  in  EC  Schedule  CXL  (circulated  in
G/SECRET/15).

Negotiations  have  been  conducted  by  the  Commission  in  consultation  with  the
Committee established by Article 133 of the Treaty  and within the framework of the
negotiating directives issued by the Council.

The  Commission  has  negotiated,  with  the  United  States  of  America,  the  WTO
Member having a principal supplying interest, an agreement in the form an exchange
of letters.

The  agreement  in  the  form  of  an  exchange  of  letters  between  the  European
Community and the United States of America should therefore be approved.

In  order  to  ensure  that  the  agreement  may  be  fully  applied  by  1  January  2003  and
pending the amendment of Council Regulation (EEC) No 1766/92 of 30 June 1992 on
the  common  organisation  of  the  market  in  cereals2,  the  Commission  should  be
authorised to adopt temporary derogations from that Regulation

OJ C …, …, p. …
OJ L 181, 1.7.1992, p. 21. Regulation as last amended by Regulation (EC) No 1666/2000 (OJ L 193,
29.7.2000, p. 1).

3

                                                
(6) 

The measures necessary for the implementation of this Decision should be adopted in
accordance  with  Council  Decision  1999/468/EC  of  28  June  1999  laying  down  the
procedures for the exercise of implementing powers conferred on the Commission3,

HAS DECIDED AS FOLLOWS:

Article 1

The Agreement in the form of an exchange of letters between the European Community and
the  United  States  of  America  relating  to  the  modification  of  concessions  with  respect  to
cereals  provided  for  in  Schedule  CXL  annexed  to  the  GATT  1994  is  hereby  approved  on
behalf of the Community.

The text of the agreement is attached to this Decision.

Article 2

To the extent necessary to permit the full application of this agreement by 1 January 2003, the
Commission  may  derogate  from  Regulation  (EEC)  No  1766/92,  in  accordance  with  the
procedure referred to in Article 3(2) of this Decision, until that Regulation is amended but at
the latest until 30 June 2003.

Article 3

1.

2.

The  Commission  shall  be  assisted  by  the  Management  Committee  for  Cereals
instituted by Article 23 of Regulation (EEC) No 1766/92.

Where  reference  is  made  to  this  paragraph,  Articles  4  and  7  of  Decision
1999/468/EC shall apply.

The period provided for in Article 4(3) of Decision 1999/468/EC shall be one month.

The President of the Council is hereby authorised to designate the person empowered to sign
the agreement in order to express the consent of the Community to be bound thereby4.

Article 4

3

4

OJ L 184, 17.7.1999, p. 23.
The date of entry into force of the agreement will be published in the Official Journal of the European
Communities.

4

                                                
Done at Brussels,

For the Council
The President

5

ANNEX

AGREEMENT

in the form of an exchange of letters between the European Community and the United States
of America relating to the modification of concessions with respect to cereals provided for in
EC Schedule CXL to the GATT 1994

Letter No 1

Letter from the European Community

Brussels, .…….

Sir,

The  European  Community  (EC)  and  the  United  States  of  America,  with  respect  to  the
concessions on cereals provided for in EC Schedule CXL to the General Agreement on Tariffs
and Trade 1994 (GATT 1994), agree to the conclusions as outlined below.

Common Wheat

(1)

(2)

For  item  1001 90 95  (other  spelt,  common  wheat,  and  meslin),  the  concessions
contained  in  EC  Schedule  CXL  shall  continue  to  apply  to  high  quality  common
wheat (as specified in Annex I to Commission Regulation (EC) No 1249/96 (28 June
1996), OJ No L 161, 125).

(a) For other spelt, medium and low quality common wheat (as specified in Annex I
to  Commission  Regulation  (EC)  No  1249/96),  and  meslin  under  item  1001 90 95
(other  spelt,  common  wheat,  and  meslin),  the  EC  shall  establish  a  tariff  quota  of
2 981 600 metric tons.

(b)  Within  the  tariff  quota  specified  in  (2)(a)  above,  572 000  metric  tons  shall  be
allocated  to  the  United  States  of  America.  Subject  to  prior  approval  by  the  United
States  of  America,  in  the  event  the  United  States  of  America  is  unable  to  fill  its
allocation, this allocation may be opened to other countries.

(c)  The  in-quota  tariff  rate  for  the  tariff  quota  specified  in  (2)(a)  above  shall  be
12 €/metric ton, and the out-of-quota tariff ra te shall be no higher than the lower of
the bound rate of duty for item 1001 90 95 (other spelt, common wheat, and meslin)
in EC Schedule CXL as of July 1, 2002 or the most-favoured-nation rate of duty.

Once the EC has established the tariff quota as specified in (2) above, the EC need
not apply the concessions for other spelt, medium and low quality common wheat (as
specified  in  Annex  I  to  Commission  Regulation  (EC)  No  1249/96  (28  June  1996),
OJ No L 161, 125), and meslin under item 1001 90 95 contained in headnote 6 of EC
Schedule CXL.

(a)  For  item  1003 00 50  (barley),  the  EC  shall  establish  a  tariff  quota  of  50 000
metric  tons  for  malting  barley  (barley  intended  for  the  production  of  malt  used  for

(3)

Barley

(4)

6

manufacture of beer aged in vats containing beechwood and with quality criteria as
specified  in  Article 2(3)  of  Commission  Regulation  (EC)  No  1234/2001  (22  June
2001), OJ No L 168, 12) and a tariff quota for all other barley of 300 000 metric tons.

(b)  The  in-quota  tariff  rate  for  the  malting-barley  tariff  quota  specified  in  (4)(a)
above shall be 8 €/me tric ton, and the out-of-quota tariff rate shall be no higher than
the lower of the bound rate of duty for item 1003 00 50 (barley) in EC Schedule CXL
as of 1 July 2002 or the most-favoured-nation rate of duty. The in-quota tariff rate for
the all-other-barley tariff quota specified in (4)(a) above shall be 16 €/metric ton, and
the out-of-quota tariff rate shall be no higher than the lower of the bound rate of duty
for  item  1003 00 50  (barley)  in  EC  Schedule  CXL  as  of  1 July  2002  or  the  most-
favoured-nation rate of duty.

(5)

Once the EC has established the tariff quotas as specified in (4) above, the EC need
not apply the concessions for item 1003 00 50 (barley) contained in headnote 6 of EC
Schedule CXL.

General

(6)

(7)

(8)

(9)

The tariff quotas specified in (2) and (4) above shall open on 1 January of each year.

The  tariff  quotas  specified  in  (2)  and  (4)  above  shall  be  managed  on  a  first-come,
first-served basis.

Any  modification  of  concessions  in  EC  Schedule  CXL  pursuant  to  (3)  and/or  (5)
above shall add the concessions specified in (2), (4), and (6) above to EC Schedule
CXL.

The  EC  recognises  that  the  United  States  of  America  has  initial  negotiating  rights
with respect to the concessions contained in headnote 6 of EC Schedule CXL and the
concessions specified in (2), (4) and (6) above.

(10) With respect to the notification of 26 July 2002 by the EC of its intention to modify
certain  concessions  in  EC  Schedule  CXL  (circulated  in  G/SECRET/15),  the  EC  is
not  modifying  concessions  contained  in  EC  Schedule  CXL  on  item  10019095  as
specified in (1) above and on items 1001 10 50 (durum wheat), 1002 00 00 (rye), ex
1005  (maize,  except  hybrid  seed),  and  ex  1007  (grain  sorghum,  except  hybrids  for
sowing) and shall notify the WTO of such.

This agreement shall be approved by the Parties in accordance with their own procedures.

The provisions of this agreement shall be applicable from 1 January 2003.

I would be grateful if you could confirm the agreement of your Government to the above.

Please accept, Sir, the assurance of my highest consideration.

On behalf of the European Community

7

Letter No 2

Letter from the United States of America

Brussels, .…….

Sir,

I have the honour to acknowledge receipt of your letter of today’s date, worded as follows:

“The  European  Community  (EC)  and  the  United  States  of  America,  with  respect  to  the
concessions on cereals provided for in EC Schedule CXL to the General Agreement on Tariffs
and Trade 1994 (GATT 1994), agree to the conclusions as outlined below.

Common Wheat

(1)

(2)

For  item  1001 90 95  (other  spelt,  common  wheat,  and  meslin),  the  concessions
contained  in  EC  Schedule  CXL  shall  continue  to  apply  to  high  quality  common
wheat (as specified in Annex I to Commission Regulation (EC) No 1249/96 (28 June
1996), OJ No L 161, 125).

(a) For other spelt, medium and low quality common wheat (as specified in Annex I
to  Commission  Regulation  (EC)  No  1249/96),  and  meslin  under  item  1001 90 95
(other  spelt,  common  wheat,  and  meslin),  the  EC  shall  establish  a  tariff  quota  of
2 981 600 metric tons.

(b)  Within  the  tariff  quota  specified  in  (2)(a)  above,  572 000  metric  tons  shall  be
allocated  to  the  United  States  of  America.  Subject  to  prior  approval  by  the  United
States  of  America,  in  the  event  the  United  States  of  America  is  unable  to  fill  its
allocation, this allocation may be opened to other countries.

(c)  The  in-quota  tariff  rate  for  the  tariff  quota  specified  in  (2)(a)  above  shall  be
12 €/metric ton, and the out-of-quota tariff ra te shall be no higher than the lower of
the bound rate of duty for item 1001 90 95 (other spelt, common wheat, and meslin)
in EC Schedule CXL as of July 1, 2002 or the most-favoured-nation rate of duty.

Once the EC has established the tariff quota as specified in (2) above, the EC need
not apply the concessions for other spelt, medium and low quality common wheat (as
specified  in  Annex  I  to  Commission  Regulation  (EC)  No  1249/96  (28  June  1996),
OJ No L 161, 125), and meslin under item 1001 90 95 contained in headnote 6 of EC
Schedule CXL.

(a)  For  item  1003 00 50  (barley),  the  EC  shall  establish  a  tariff  quota  of  50 000
metric  tons  for  malting  barley  (barley  intended  for  the  production  of  malt  used  for
manufacture of beer aged in vats containing beechwood and with quality  criteria as
specified  in  Article 2(3)  of  Commission  Regulation  (EC)  No  1234/2001  (22  June
2001), OJ No L 168, 12) and a tariff quota for all other barley of 300 000 metric tons.

(b)  The  in-quota  tariff  rate  for  the  malting-barley  tariff  quota  specified  in  (4)(a)

(3)

Barley

(4)

8

above shall be 8 €/me tric ton, and the out-of-quota tariff rate shall be no higher than
the lower of the bound rate of duty for item 1003 00 50 (barley) in EC Schedule CXL
as of 1 July 2002 or the most-favoured-nation rate of duty. The in-quota tariff rate for
the all-other-barley tariff quota specified in (4)(a) above shall be 16 €/metric ton, and
the out-of-quota tariff rate shall be no higher than the lower of the bound rate of duty
for  item  1003 00 50  (barley)  in  EC  Schedule  CXL  as  of  1 July  2002  or  the  most-
favoured-nation rate of duty.

(5)

Once the EC has established the tariff quotas as specified in (4) above, the EC need
not apply the concessions for item 1003 00 50 (barley) contained in headnote 6 of EC
Schedule CXL.

General

(6)

(7)

(8)

(9)

The tariff quotas specified in (2) and (4) above shall open on 1 January of each year.

The  tariff  quotas  specified  in  (2)  and  (4)  above  shall  be  managed  on  a  first-come,
first-served basis.

Any  modification  of  concessions  in  EC  Schedule  CXL  pursuant  to  (3)  and/or  (5)
above shall add the concessions specified in (2), (4), and (6) above to EC Schedule
CXL.

The  EC  recognises  that  the  United  States  of  America  has  initial  negotiating  rights
with respect to the concessions contained in headnote 6 of EC Schedule CXL and the
concessions specified in (2), (4) and (6) above.

(10) With respect to the notification of 26 July 2002 by the EC of its intention to modify
certain  concessions  in  EC  Schedule  CXL  (circulated  in  G/SECRET/15),  the  EC  is
not  modifying  concessions  contained  in  EC  Schedule  CXL  on  item  10019095  as
specified in (1) above and on items 1001 10 50 (durum wheat), 1002 00 00 (rye), ex
1005  (maize,  except  hybrid  seed),  and  ex  1007  (grain  sorghum,  except  hybrids  for
sowing) and shall notify the WTO of such.

This agreement shall be approved by the Parties in accordance with their own procedures.

The provisions of this agreement shall be applicable from 1 January 2003.

I would be grateful if you could confirm the agreement of your Government to the above.”

The United States of America has the honour of confirming its agreement with the contents of
this letter.

Please accept, Sir, the assurance of my highest consideration.

On behalf of the United States of America

9

FINANCIAL STATEMENT

1.

2.

3.

4.

BUDGET HEADING:
Article 100

APPROPRIATIONS:
EUR 1 121.7 Mio

TITLE:
Proposal for a Council decision on the conclusion of an Agreement in the form of an exchange of letters
between  the  European  Community  and  the  United  States  of  America  relating  to  the  modification  of
concessions with respect to cereals provided for in Schedule CXL annexed to the GATT.

LEGAL BASIS:
Article 133 of the Treaty

AIMS:
To modify concessions with respect to certain cereals provided for in Schedule CXL annexed to the
GATT.

5.

FINANCIAL IMPLICATIONS

5.0

5.1

CHARGED TO THE EC BUDGET

NATIONAL AUTHORITIES
OTHER

EXPENDITURE
-
(REFUNDS/INTERVENTIONS)
-
-
REVENUE
-
(LEVIES/CUSTOMS DUTIES)
-

NATIONAL

OWN RESOURCES OF THE EC

12 MONTH
PERIOD

(EUR million)

CURRENT
FINANCIAL
YEAR 2002
(EUR million)

FOLLOWING
FINANCIAL
YEAR 2003
(EUR million)

-

(1)

-

-

-

(1)

5.0.1 ESTIMATED EXPENDITURE
5.1.1 ESTIMATED REVENUE

5.2 METHOD OF CALCULATION:

2004
-
(1)

2005
-
(1)

2006
-
(1)

2007
-
(1)

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 APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS?

YES / NO

YES / NO

YES / NO

YES / NO

OBSERVATIONS:

(1)

Since the tariff quotas are established for wheat, except for high quality wheat, and barley on the basis
of real import quantities and the in-quota tariff rates fixed at the actual level (i.e. before the entry into
force of the Agreement), the effect on own resources should be neutral.

10

Proposal for a

COUNCIL DECISION

on the conclusion of an Agreement in the form of an exchange of letters between the
European Community and Canada pursuant to Article XXVIII of GATT 1994 for the
modification of concessions with respect to cereals provided for in EC Schedule CXL
annexed to the GATT 1994

11

1.

2.

3.

4.

5.

EXPLANATORY MEMORANDUM

On 26 July 2002, the Council authorised the Commission to notify the WTO that the
European Communitiy intended to modify concessions on items 1001 10 50 (durum
wheat),  1001 90 95  (spelt,  common  wheat  and  meslin,  except  spelt  for  sowing)
1002 00 00  (rye),  1003 00 50  (barley),  1005  (maize,  except  hybrid  seeds),
1007 00 90 (grain sorghum, except hybrids for sowing) included in Schedule CXL of
the  European  Communities  annexed  to  GATT  and  was  prepared  to  enter  into
negotiations and consultations with WTO members under Article XXVIII of GATT
1994.

Negotiations  have  been  conducted  by  the  Commission  in  consultation  with  the
133 Committee and within the framework of the negotiating directives issued by the
Council.

The Commission has negotiated with Canada, the WTO Member having a substantial
supplying interest in item 1001 90 95 (spelt, common wheat and meslin, except spelt
for sowing) an agreement in the form of an exchange of letters which will lead to the
modification of certain concessions in European Communities Schedule CXL.

The exchange of letters was paraphed by the Commission on 12 November 2002.

This proposal asks the Council to approve the agreement in the form of an exchange
of letters between the European Community and Canada.

The  application  of  this  agreement  provides  otherwise  than  certain  provisions  of
Council  Regulation  (EEC)  No  1766/92,  which  therefore  needs  to  be  modified.  In
order to ensure the application of this agreement from 1 January 2003, this decision
enables the Commission to derogate from the provisions concerned for a transitional
period,  i.e.  until  the  modification  has  entered  into  force,  but  not  later  than  30  June
2003.

The  Commission  will  present  a  proposal  for  the  necessary  modification  to  the
Council Regulation at the same time.

12

2002/0294 (ACC)

Proposal for a

COUNCIL DECISION

on the conclusion of an Agreement in the form of an exchange of letters between the
European Community and Canada pursuant to Article XXVIII of GATT 1994 for the
modification of concessions with respect to cereals provided for in EC Schedule CXL
annexed to the GATT 1994

THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular
Article 133 in conjunction with the first sentence of the first subparagraph of Article 300(2)
thereof,

Having regard to the proposal from the Commission5,

Whereas:

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

5

6

7

On 26 July 2002, the Council authorised the Commission to open negotiations under
Article  XXVIII  of  the  GATT  1994  with  a  view  to  modify  certain  concessions  for
cereals. Accordingly, the European Community notified the WTO on 26 July 2002 of
its  intention  to  modify  certain  concessions  in  EC  Schedule  CXL  (circulated  in
G/SECRET/15).

Negotiations  have  been  conducted  by  the  Commission  in  consultation  with  the
Committee established by Article 133 of the Treaty  and within the framework of the
negotiating directives issued by the Council.

The Commission has negotiated with Canada, the WTO Member having a substantial
supplying interest, an agreement in the form of an exchange of letters.

The  agreement  in  the  form  of  an  exchange  of  letters  between  the  European
Community and Canada should therefore be approved.

In  order  to  ensure  that  the  agreement  may  be  fully  applied  by  1  January  2003  and
pending the amendment of Council Regulation (EEC) No 1766/92 of 30 June 1992 on
the  common  organisation  of  the  market  in  cereals6,  the  Commission  should  be
authorised to adopt temporary derogations from that Regulation.

The measures necessary for the implementation of this Decision should be adopted in
accordance  with  Council  Decision  1999/468/EC  of  28  June  1999  laying  down  the
procedures for the exercise of implementing powers conferred on the Commission7,

OJ C …., …., p. …
OJ L 181, 1.7.1992, p. 21. Regulation as last amended by Regulation (EC) No 1666/2000 (OJ L 193,
29.7.2000, p. 1).
OJ L 184, 17.7.1999, p. 23.

13

                                                
HAS DECIDED AS FOLLOWS:

Article 1

The Agreement in the form of an exchange of letters between the European Community and
Canada pursuant to Article XXVIII of GATT 1994 for the modification of concessions with
respect  to  cereals  provided  for  in  EC  Schedule  CXL  annexed  to  the  GATT  1994  is  hereby
approved on behalf of the Community.

The text of the agreement is attached to this Decision.

Article 2

To the extent necessary to permit the full application of this agreement by 1 January 2003, the
Commission  may  derogate  from  Regulation  (EEC)  No  1766/92,  in  accordance  with  the
procedure referred to in Article 3(2) of this Decision, until that Regulation is amended but at
the latest until 30 June 2003.

Article 3

1.

2.

The  Commission  shall  be  assisted  by  the  Management  Committee  for  Cereals
instituted by Article 23 of Regulation (EEC) No 1766/92.

Where  reference  is  made  to  this  paragraph,  Articles  4  and  7  of  Decision
1999/468/EC shall apply.

The period provided for in Article 4(3) of Decision 1999/468/EC shall be one month.

The President of the Council is hereby authorised to designate the person empowered to sign
the agreement in order to express the consent of the Community to be bound thereby8.

Article 4

Done at Brussels,

For the Council,
The President

8

The date of entry into force of the agreement will be published in the Official Journal of the European
Communities.

14

                                                
ANNEX

AGREEMENT

in the form of an exchange of letters between the European Community and Canada pursuant to
Article XXVIII of GATT 1994 for the modification of concessions with respect to cereals
provided for in EC Schedule CXL annexed to the GATT 1994

Letter No 1

Letter from the European Community

Brussels, ........

Sir,

Following  negotiations  between  the  European  Community  (EC)  and  Canada  under  Article
XXVIII of GATT 1994 for the modification of concessions with respect to cereals provided for in
EC Schedule CXL annexed to the General Agreement on Tariffs and Trade 1994 (GATT 1994),
the EC agrees to the conclusions as outlined below.

(1)

(2)

With regard to the EC notification G/SECRET/15 of 26 July 2002, for durum wheat and
rye as well as for high quality common wheat (as specified in Annex  I to Commission
Regulation  (EC)  No  1249/96  (28  June  1996),  OJ  No  L  161,  125),  the  concessions
contained in the EC Schedule CXL shall continue to apply.

(a) For other spelt, medium and low quality common wheat (as specified in Annex I to
Commission  Regulation  (EC)  No  1249/96  (28  June  1996),  OJ  No  L  161,  125),  and
meslin  under  item  1001 90 95  (other  spelt,  common  wheat,  and  meslin),  the  EC  shall
establish a tariff quota of 2 981 600 tons.

(b)  Within  the  tariff  quota  specified  in  (2)(a)  above,  38 000  tons  shall  be  allocated  to
Canada.  Subject  to  prior  approval  by  Canada,  in  the  event  Canada  is  unable  to  fill  its
allocation, this allocation may be opened to other countries.

(c) The in-quota tariff rate for the tariff quota specified in (2)(a) above shall be 12 €/ton,
and  the  out-of-quota  tariff  rate  shall  be  no  higher  than  the  lower  of  the  bound  rate  of
duty for item 1001 90 95 (other spelt, common wheat, and meslin) in EC Schedule CXL
as of July 1, 2002 or the most-favoured-nation rate of duty.

(3)

Once the EC has established the tariff quota as specified in (2) above, the EC need not
apply  the  concessions  for  other  spelt,  medium  and  low  quality  common  wheat  (as
specified in Annex I to Commission Regulation (EC) No 1249/96 (28 June 1996), OJ No

15

L 161, 125), and meslin under item 1001 90 95 contained in headnote 6 of EC Schedule
CXL.

The tariff quota specified in (2) above shall open on 1 January of each year.

The  tariff  quota  specified  in  (2)  above  shall  be  managed  on  a  first-come,  first-served
basis. Both parties will consult on the other aspects of the management of the quota.

The  EC  recognises  that  Canada  has  initial  negotiating  rights  with  respect  to  the
concessions specified in (1) and (2) above.

(4)

(5)

(6)

This agreement shall be approved by the Parties in accordance with their own procedures.

The provisions of this agreement shall be applicable from 1 January 2003.

I would be grateful if you could confirm the agreement of your Government to the above.

Please accept, Sir, the assurance of my highest consideration.

On behalf of the European Community

16

Letter No 2

Letter from Canada

Brussels, .…….

Sir,

I have the honour to acknowledge receipt of your letter of today’s date, worded as follows:

“Following  negotiations  between  the  European  Community  (EC)  and  Canada  under  Article
XXVIII of GATT 1994 for the modification of concessions with respect to cereals provided for in
EC Schedule CXL annexed to the General Agreement on Tariffs and Trade 1994 (GATT 1994),
the EC agrees to the conclusions as outlined below.

(1)

(2)

(3)

(4)

(5)

With regard to the EC notification G/SECRET/15 of 26 July 2002, for durum wheat and
rye as well as for high quality common wheat (as specified in Annex  I to Commission
Regulation  (EC)  No  1249/96  (28  June  1996),  OJ  No  L  161,  125),  the  concessions
contained in the EC Schedule CXL shall continue to apply.

(a) For other spelt, medium and low quality common wheat (as specified in Annex I to
Commission  Regulation  (EC)  No  1249/96  (28  June  1996),  OJ  No  L  161,  125),  and
meslin  under  item  1001 90 95  (other  spelt,  common  wheat,  and  meslin),  the  EC  shall
establish a tariff quota of 2 981 600 tons.

(b)  Within  the  tariff  quota  specified  in  (2)(a)  above,  38 000  tons  shall  be  allocated  to
Canada.  Subject  to  prior  approval  by  Canada,  in  the  event  Canada  is  unable  to  fill  its
allocation, this allocation may be opened to other countries.

(c) The in-quota tariff rate for the tariff quota specified in (2)(a) above shall be 12 €/ton,
and  the  out-of-quota  tariff  rate  shall  be  no  higher  than  the  lower  of  the  bound  rate  of
duty for item 1001 90 95 (other spelt, common wheat, and meslin) in EC Schedule CXL
as of July 1, 2002 or the most-favoured-nation rate of duty.

Once the EC has established the tariff quota as specified in (2) above, the EC need not
apply  the  concessions  for  other  spelt,  medium  and  low  quality  common  wheat  (as
specified in Annex I to Commission Regulation (EC) No 1249/96 (28 June 1996), OJ No
L 161, 125), and meslin under item 1001 90 95 contained in headnote 6 of EC Schedule
CXL.

The tariff quota specified in (2) above shall open on 1 January of each year.

The  tariff  quota  specified  in  (2)  above  shall  be  managed  on  a  first-come,  first-served
basis. Both parties will consult on the other aspects of the management of the quota.

17

(6)

The  EC  recognises  that  Canada  has  initial  negotiating  rights  with  respect  to  the
concessions specified in (1) and (2) above.

This agreement shall be approved by the Parties in accordance with their own procedures.

The provisions of this agreement shall be applicable from 1 January 2003.

I would be grateful if you could confirm the agreement of your Government to the above.”

Canada has the honour of confirming its agreement with the contents of this letter.

Please accept, Sir, the assurance of my highest consideration.

On behalf of Canada

18

FINANCIAL STATEMENT

1.

2.

3.

4.

BUDGET HEADING:
Article 100

APPROPRIATIONS:
EUR 1 121.7 Mio

TITLE:
Proposal for a Council decision on the conclusion of an Agreement in the form of an exchange of letters
between the European Community and Canada relating to the modification of concessions with respect
to cereals provided for in Schedule CXL annexed to the GATT.

LEGAL BASIS:
Article 133 of the Treaty

AIMS:
To  modify  concessions  with  respect  to  certain  cereals  provided  for  in  Schedule  CXL  annexed  to  the
GATT.

5.

FINANCIAL IMPLICATIONS

5.0

5.1

CHARGED TO THE EC BUDGET

NATIONAL AUTHORITIES
OTHER

EXPENDITURE
-
(REFUNDS/INTERVENTIONS)
-
-
REVENUE
-
(LEVIES/CUSTOMS DUTIES)
-

NATIONAL

OWN RESOURCES OF THE EC

5.0.1 ESTIMATED EXPENDITURE
5.1.1 ESTIMATED REVENUE

5.2 METHOD OF CALCULATION:

12 MONTH
PERIOD

(EUR million)

CURRENT
FINANCIAL
YEAR 2002
(EUR million)

FOLLOWING
FINANCIAL
YEAR 2003
(EUR million)

-

(1)

2004
-
(1)

-

-

-

(1)

2005
-
(1)

2006
-
(1)

2007
-
(1)

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 APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS?

YES / NO

YES / NO

YES / NO

YES / NO

OBSERVATIONS:

(1)

Since  the  tariff  quotas  are  established  for  wheat,  except  for  high  quality  wheat,  on  the  basis  of  real
import quantities and the in-quota tariff rates fixed at the actual level (i.e. before the entry into force of
the Agreement), the effect on own resources should be neutral.

19