Proposal for a Council Decision concerning the conclusion of an Agreement in the form of an Exchange of Letters between the European Community, of the one part, and the Kingdom of Norway, of the other part, on Protocol 2 to the bilateral Free Trade Agreement between the European Economic Community and the Kingdom of Norway
Date: 2004-07-27
Institutions: European Commission
Subjects: European Economic Area, Norway, common customs tariff, free-trade agreement, revision of an agreement, tariff preference

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.7.2004 
COM(2004) 522 final 

2004/0177 (ACC) 

Proposal for a 

COUNCIL DECISION 

concerning the conclusion of an Agreement in the form of an Exchange of Letters 
between the European Community, of the one part, and the Kingdom of Norway, of the 
other part, on Protocol 2 to the bilateral Free Trade Agreement between the European 
Economic Community and the Kingdom of Norway 

(presented by the Commission) 

EN 

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EXPLANATORY MEMORANDUM 

The  trade  arrangements  applicable  to  processed  agricultural  products  between  the  European 
Community and the Kingdom of Norway are governed by Protocol 2 to the bilateral free trade 
agreement  (FTA),  of  the  one  part,  and  by  Protocol  3  of  the  European  Economic  Area 
Agreement (EEAA) of the other part. 

In 2002, discussions between Commission and Norwegian officials on the elimination of the 
non  agricultural  component  of  the  duties  set  in  Protocol  3  to  the  EEAA  were  initiated  and 
concluded  on  11th  March  2004.  The  compromise  reached  comprises:  (a)  tariff  reductions  or 
abolition  on  a  number  of  goods,  leading  to  improvement  of  market  access  on  a  reciprocal 
basis for Norway and the EC; (b) a compromise on the import into the Community of certain 
mineral waters containing sugar originating in Norway (temporary suspension of the duty free 
regime and establishment of a Community duty free quota under Protocol 2 to the FTA).  

The  new  tariff  concessions  shall  be  implemented  by  an  EEA  Joint  Committee  Decision 
amending  Protocol  3  to  the  EEAA.  This  is  why  a  Commission  proposal  for  a  draft 
Community position for adoption as an EEA Joint Committee Decision was presented to the 
Council in June 2004.  

In parallel, it is necessary to amend Protocol 2 to the bilateral free trade agreement between 
Norway and the EC: (a) to replace the agreement in the form of an exchange of letters of 27 
November  2002  to  consolidate  the  results  of  the  negotiations  (certain  quotas  will  become 
redundant  as  the  duty  will  be  set  at  0  by  Norway  under  Protocol  3  to  the  EEAA);  (b)  to 
implement the compromise reached on soft drinks. The latter consists of the suspension of the 
duty  free  regime  and  the  introduction  of  a  duty  free  tariff  quota  of  13  million  litres  for 
products  CN  2202  10  00  (waters,  including  mineral  waters  and  aerated  waters,  containing 
added sugar or other sweetening matter or flavoured) and ex 2202 90 10 (other mineral waters 
containing  sugar  (sucrose  and  invert  sugar)).  Quantities  imported  outside  the  quota  will  be 
charged with a duty of 0.047 €/litre (i.e. equal to the difference in sugar prices between the 
Community and Norway).  

The  enclosed  draft  proposal  for  a  Council  Decision  concerning  the  conclusion  of  an 
agreement in the form of an exchange of letters reflects the latter objectives and it is proposed 
that the Council adopt it. 

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2004/0177 (ACC) 

Proposal for a 

COUNCIL DECISION 

concerning the conclusion of an Agreement in the form of an Exchange of Letters 
between the European Community, of the one part, and the Kingdom of Norway, of the 
other part, on Protocol 2 to the bilateral Free Trade Agreement between the European 
Economic Community and the Kingdom of Norway 

(Text with EEA relevance) 

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 Article 300(2) thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

Protocol  2  to  the  bilateral  free  trade  agreement  between  the  European  Economic 
Community and the Kingdom of Norway1, of the one hand, and Protocol 3 to the EEA 
Agreement,  as  amended  by  Decision  No  140/2001  of  the  EEA  Joint  Committee2,  of 
the other hand, determine the trade arrangements for certain agricultural and processed 
agricultural products between the Contracting Parties. 

At the time of the adoption of Decision No 140/2001, the EC and Norway stated in a 
joint declaration that the non-agricultural component of customs duties on products in 
Table  I  of  Protocol  3  must  be  eliminated.  On  this  basis,  discussions  between 
Commission  and  Norwegian  officials  were  concluded  on  11  March  2004.  The  new 
tariff  concessions  shall  be  implemented  by  an  EEA  Joint  Committee  Decision 
amending Protocol 3 to the EEA Agreement.  

An agreement in the form of an exchange of letters between the European Community, 
of  the  one  part,  and  the  Kingdom  of  Norway,  of  the  other  part,  on  Protocol 2  to  the 
bilateral Free Trade Agreement between the European Economic Community and the 
Kingdom of Norway, has also been negotiated in order to take into account the results 
of these discussions.  

(4) 

The Agreement should be approved. 

1 
2 

OJ L 171, 27.6.1973, p. 1. 
OJ L 22, 24.1.2002, p. 34. 

EN 

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(5) 

Since  the  measures  necessary  for  implementing  this  Decision  are  management 
measures  within  the  meaning  of  Article 2  of  Council  Decision  1999/468/EEC  of 
28 June  1999  laying  down  the  procedures  for  the  exercise  of  implementing  powers 
conferred on the Commission, 3 they should be adopted by the management procedure 
laid down in Article 4 of that Decision. 

HAS DECIDED AS FOLLOWS: 

Article 1 

The Agreement in the form of an Exchange of Letters between the European Community, of 
the one part, and the Kingdom of Norway, of the other part, concerning Protocol No 2 to the 
bilateral  Free  Trade  Agreement  between  the  European  Economic  Community  and  the 
Kingdom of Norway is hereby approved on behalf of the Community. 

The text of the Agreement is attached to this Decision. 

The President of the Council is hereby authorised to designate the person empowered to sign 
the Agreement referred to in Article 1 in order to bind the Community. 

Article 2 

Article 3 

Rules for the application of this Decision shall be adopted by the Commission, assisted by the 
management  committee  on  horizontal  questions  concerning  trade  in  processed  agricultural 
products  referred  to  in  Article 16  of  Council  Regulation  (EC)  No 3448/93 4.  Article 4  of 
Decision  1999/468/EC  shall  apply:  the  period  provided  for  in  Article  4(3)  of  that  Decision 
shall be set at one month. 

Article 4 

This  Decision  shall  enter  into  force  on  the  first  day  of  the  first  month  following  that  of  its 
adoption. 

Done at Brussels, 

For the Council 
The President 

3 
4 

OJ L 184, 17.7.1999, p. 23. 
OJ  L 318,  20.12.1993,  p. 18.  Regulation  last  amended  by  Regulation  (EC)  No 2580/00  (OJ  L 298, 
25.11.2000, p. 5).  

EN 

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AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS 

between the European Community, of the one part, and the Kingdom of Norway, of the other 
part, concerning Protocol No 2 to the bilateral Free Trade Agreement between the European 
Economic Community and the Kingdom of Norway. 

A. Letter from the Community 

Brussels, 

Sir, 

I have the honour to confirm that the European Community is in agreement with the "Agreed 
minutes" attached to this letter concerning Protocol No 2 to the bilateral free trade agreement 
between the European Economic Community and the Kingdom of Norway.  

I should be obliged if you would confirm that the Government of the Kingdom of Norway is 
in agreement with the content of this letter. 

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

For the European Community 

B. Letter from Norway 

Brussels, 

Sir, 

I have the honour to acknowledge receipt of your letter of today's date which reads as follows: 

"I have the honour to confirm that the European Community is in agreement with the "Agreed 
minutes"  attached  to  this  letter  concerning  Protocol  No 2  to  the  bilateral  free  trade 
agreement between the European Economic Community and the Kingdom of Norway.” 

I have the honour to confirm  that my Government is in agreement with the content of your 
letter and the proposed date of entry into force of the amendments. 

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

For the Government of the Kingdom of Norway 

EN 

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I – Introduction 

Agreed minutes 

On 11 March 2004, and after several meetings between Norway and Commission officials, a 
compromise  was  reached  on  tariff  reductions  or  abolition  on  a  number  of  processed 
agricultural products covered by Protocol 3 to the EEA Agreement1 or by Protocol N° 2 to the 
1973 free trade agreement between the European Economic Community and the Kingdom of 
Norway2.  

These  concessions  should  lead  to  the  improvement  of  market  access  for  Norway  and  the 
Community and would require the modification of Protocol 3 to the EEA Agreement as well 
as  Protocol  N°  2  to  the  bilateral  free  trade  agreement.  Therefore,  the  two  parties  agreed  to 
submit for approval to their respective authorities some changes to the import arrangements 
applied  by  the  parties  to  certain  processed  agricultural  products.  The  changes  will  be 
implemented in the form of a Decision of the EEA Joint Committee amending Protocol 3 to 
the  EEA  Agreement  and  of  the  present  Agreement  in  the  form  of  an  exchange  of  letters 
between the European Community and the Kingdom of Norway.  

The  changes  will  enter  into  force  on  the  first  day  of  the  first  month  following  the  date  on 
which  the  parties  sign  this  Agreement  in  the  form  of  an  exchange  of  letters  to  which  these 
Agreed Minutes relate. 

The two parties agree that the respective import arrangements under II and III-1 below will, 
from  1  January  2005,  replace  the  agreement  in  the  form  of  an  exchange  of  letters  of  27 
November  2002.  The  import  arrangements  under  III- 2  and  IV  shall  apply  from  the  date  of 
entry into force of this Agreement.  

II – Norwegian import arrangements 

From  1  January  2005,  Norway  will  open  the  following  annual  tariff  quotas  for  the 
Community: 

Norwegian 
tariff codes 

Description 

Volume 

Applicable 
rate of duty 

1506.0021  Bonefat, bone oil and neat’s foot oil 

2.360 tonnes 

1518.0041  Lineseed oil 

100 tonnes 

Free 

Free 

1 
2 

OJ L 22, 24.1.2002, p. 34. 
OJ L 171, 27.6.1973, p. 31. 

EN 

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III- Community Import arrangements  

1. 

From  1  January  2005,  the  Community  will  open  the  following  annual  tariff  quotas 
for Norway: 

Order 
number  

09.0765 

CN Code 

Description 

1517 10 90  Margarine, 

excluding 

liquid  margarine, 
containing, by weight, not more than 10% of milk 
fats 

09.0771 

Ex 2207 10 00 

(TARIC  Code 
90) 

Undenatured  ethyl  alcohol  of  an  alcohol  strength 
by  volume  of  80%  vol.  or  higher,  other  than  that 
obtained  from  agricultural  products  listed  in 
Annex I to the EEC Treaty 

Volume 

Applicable 
rate of duty 

2 470 

tonnes 

Free 

164 000 

Free 

hectolitres 

09.0772 

Ex 2207 20 00 

(TARIC  Code 
90) 

Ethyl  alcohol  and  other  spirits,  denatured,  of  any 
strength, other than that obtained from agricultural 
products listed in Annex I to the EEC Treaty 

14 340 

Free 

hectolitres 

09.0774 

2403 10 

Smoking  tobacco,  whether  or  not  containing 
tobacco substitutes in any proportion 

370 

Free 

tonnes 

From the date of entry into force of this agreement and until 31 December 2004, the 

2. 
Community will open the following additional duty free tariff quotas for Norway: 

09.0771 

Ex 2207 10 00 

(TARIC  Code 
90) 

Undernatured ethyl alcohol of an alcohol strength 
by  volume  of  80%  vol.  or  higher,  other  than  that 
obtained  from  agricultural  products  listed  in 
Annex I to the EEC Treaty 

[15 000] 

Free 

hectolitres 

09.0772 

Ex 2207 20 00 

(TARIC  Code 
90) 

Ethyl  alcohol  and  other  spirits,  denatured,  of  any 
strength, other than that obtained from agricultural 
products listed in Annex I to the EEC Treaty 

[5500] 

Free 

hectolitres 

IV- Community arrangements on certain soft drinks 

– 

The  present  arrangements  temporarily  suspend  the  duty  free  regime 
applied under Protocol N° 2 to the bilateral free trade agreement to goods 
classified under CN codes 2202 10 00 (waters, including mineral waters 
and aerated waters, containing added sugar or other sweetening matter or 
flavoured)  and  ex  2202  90  10  (other  mineral  waters  containing  sugar 
(sucrose and invert sugar)).  

EN 

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– 

– 

The Community will open an annual duty free tariff quota from 1January 
to 31 December for goods originating in Norway and classified under CN 
codes 2202 10 00 (waters, including mineral waters and aerated waters, 
containing added sugar or other sweetening matter or flavoured) and ex 
2202  90  10  (other  mineral  waters  containing  sugar  (sucrose  and  invert 
sugar)),  for  the  following  quantity:  13  million  litres  in  2004  and  14.3 
million  litres  in  2005.  For  the  year  2004,  the  tariff  quota  shall  be  open 
from  […to  31  December  2004].  The volume  for  the  year  2004  shall  be 
reduced  on  a  pro  rata  basis  according  to  the  period,  based  on  whole 
months,  already  elapsed.  Outside  the  quota  allocation,  the  import  duty 
will  be  0.047€/litre.  The  import  duty  may  be  revised  annually  on  the 
basis  of  the  difference  in  sugar  prices  between  Norway  and  the 
Community.  

On  31  October  2005,  and  on  31  October  of  each  following  year,  if  the 
tariff  quota  has  been  exhausted,  the  tariff  quota  applicable  from  1 
January of the following year will be increased by 10%. If the quota has 
not been exhausted on that date, the products mentioned in paragraph 1 
will  be  granted  unlimited  duty  free  access  to  the  Community  from  1 
January to 31 December of the following year.  

The tariff quotas specified under II, III and IV shall be granted to originating products 
V- 
in accordance with the rules of origin laid down in Protocol No 3 to the to the 1973 free trade 
agreement between the European Economic Community and the Kingdom of Norway. 

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FINANCIAL STATEMENT 

ENTR F.4 

DATE: 10.05.2004 
APPROPRIATIONS: 

BUDGET HEADING(S) INVOLVED: 
Chapter 12, Article 120 
TITLE OF OPERATION: Proposal for a Council Decision concerning the conclusion of an Agreement 
in  the  form  of  an  Exchange  of  Letters  between  the  European  Community,  of  the  one  part,  and  the 
Kingdom of Norway, of the other part, on Protocol 2 to the bilateral Free Trade Agreement between the 
European Economic Community and the Kingdom of Norway 
LEGAL BASIS: 
Article 133 
OBJECTIVES OF THE MEASURE: 
The purpose of this Decision is to implement the results of discussions concluded with Norway in 
March 2004 and relating to the trade arrangements applied to processed agricultural products. 
FINANCIAL IMPACT 

12-MONTH 
PERIOD 
(Million euro) 

CURRENT 
FINANCIAL 
YEAR 2004 
(Million euro) 

NEXT 
FINANCIAL 
YEAR 
2005 
(Million euro) 

1. 

2. 

3. 

4. 

5. 

5.0 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
- 
(REFUNDS/INTERVENTION) 
- 
- 

NATIONAL AUTHORITIES 
OTHER  

5.1  REVENUE 

OWN RESOURCES OF THE EC 

- 
(LEVIES/CUSTOMS DUTIES)  
NATIONAL 
- 

- 

- 

- 

-  

- 

- 

2006 

2007 

2008 

2009 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE  
5.2  METHOD OF CALCULATION: 
6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN 

- 

- 

- 

THE RELEVANT CHAPTER OF THE CURRENT BUDGET? 

- 

 NO 

6.1  CAN THE PROJECT BE FINANCED BY TRANSFERS BETWEEN CHAPTERS 

OF THE CURRENT BUDGET? 

 NO 
NO 
6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 
6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 
NO 
OBSERVATIONS: There will be no financial consequence following the adoption of this decision as the 
financial impact was foreseen when proposing the Draft EEA Decision amending Protocol 3. 

EN 

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