Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Regulation amending Regulation (EC) No 2702/1999 on measures to provide information on, and to promote, agricultural products in third countries, and Regulation (EC) No 2826/2000 on information and promotion actions for agricultural products on the internal market’(COM(2004) 233 final – 2004/0073 (CNS))
Date: 2004-10-27
Institutions: European Economic and Social Committee
Subjects: ESC opinion, EU aid, EU production, administrative formalities, agricultural product, consumer information, sales promotion, third country

C 120/34

EN

Official Journal of the European Union

20.5.2005

Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Regu-
lation amending Regulation (EC) No 2702/1999 on measures to provide information on, and to
promote, agricultural products in third countries, and Regulation (EC) No 2826/2000 on informa-
tion and promotion actions for agricultural products on the internal market’

(COM(2004) 233 final – 2004/0073 (CNS))

(2005/C 120/08)

On 21 April 2004, the Council of the European Union decided to consult the European Economic and
Social Committee, under Articles 36 and 37 of the Treaty establishing the European Community, on the
abovementioned 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 21 September 2004. The rapporteur was Mr
Leif E. Nielsen.

At its 412th plenary session on 27 and 28 October 2004 (meeting of 27 October 2004) the European
Economic and Social Committee adopted the following opinion by 171 votes to one, with six abstentions.

1. Background

1.1
Until 1999, the EU co-financed information campaigns
and promotional activities for agricultural products both inside
and outside the EU as part of the individual market organisa-
tions. Subsequently, under Regulations (EC) No 2702/1999 and
(EC) No 2826/2000 relating to third countries and the internal
market, these sectoral provisions were replaced by a more hori-
zontal strategy designed to support Member States' and busi-
nesses' own promotional activities. Unless it is extended, the
first of
the end of 2004. As
the Commission submitted a
required by the regulations,
detailed report on their application in March 2004, together
with proposals for simplification and improvements.

these regulations expires at

1.2
In the EU, problems such as BSE, dioxin and listeria
have increased the need for European food initiatives and infor-
mation about monitoring arrangements to secure quality and
traceability. The focus is therefore on information about legisla-
tion relating to quality, safety, labelling, traceability, protected
geographical indications, designations of origin, certificates of
specific character and organic and integrated production, with
the aim of upgrading the image of European products in consu-
mers' eyes.

1.3
In third countries, the schemes also seek to provide
information about: (a) the EU's efforts to guarantee quality and
safety,
including the characteristics of products linked to
specific regions, and (b) requirements to safeguard organic
products. Tools used both inside and outside the EU include
information campaigns, PR measures, promotional activities,
advertising, and participation in trade fairs and exhibitions,
which may prepare the ground for national and private
campaigns designed to increase the market share of their own
products.

As a rule, the Community contributes 50 % to promo-
1.4
tion programmes. The relevant professional and interprofes-
sional organisations contribute 30 %, the Member States 20 %
– in both cases with the option of using parafiscal
taxes.
Member States' expenditure is regarded as intervention and is
refunded by the Commission.

The European or national organisations involved must
1.5
themselves initiate the programmes, while the Member States
are responsible for management, control and payment. To safe-
guard the European dimension, priority is given to programmes
presented jointly by two or more Member States and profes-
sional organisations. However, these programmes face a range
of practical difficulties as a result of different administrative
rules and procedures and a lack of commitment on the part of
certain Member States. Moreover, proposers are, on the whole,
required to spend an inordinate amount of time and resources
on coordination, monitoring and administration.

The purpose of the proposals is to mitigate the disad-
1.6
vantages of complicated rules and red tape. This is discussed in
greater detail in the Commission's report. The changes are also
designed to ensure that the programmes are, in substance, of
much more genuinely European interest.

2. General comments

2.1
The changes to the common agricultural policy, along
with stiffer market competition confirm the need for the
information
scheme. Competing
campaigns and promotion actions on export markets also
warrant a continuation of
the EU system both inside and
outside the Union.

countries'

support

for

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2.1.1
There is, however, a considerable need for simplifica-
tion and improvement. Having consulted the professional orga-
nisations and other parties concerned, the Commission has
drawn up a comprehensive report on the upcoming revision
with a view to simplifying administrative procedures, and
ensuring that the system operates as efficiently as possible.

tion areas with due regard for variety and gastronomic diver-
sity. The European professional organisations should therefore
be more involved in implementing information campaigns that
provide details of product quality and variations in consumer
preferences within the EU. Third-country markets should also
be given higher priority – at the same time as the gradual
phase-out of export refunds – bearing in mind the realistic
possibilities for implementing effective programmes.

2.2
As the Commission points out, however, it is too early
to judge the results of the new regime. Gradual implementation
only started in 2001 for third countries and in 2002 for the
internal market. 2003 was the first year in which the system
was fully operative.
It would therefore be useful, as the
Commission proposes, to draw up a second report by the end
of 2006, analysing the operation of the regime following revi-
sion. This would also make it possible to evaluate its imple-
mentation in the new EU Member States.

2.3
Hence, many organisations are only now familiarising
themselves with the regime's provisions and administrative
requirements. As the Commission points out, however, some
of the proposed programmes have been of limited European
interest. Greater emphasis
should therefore be placed on
programmes that have sufficient scope to be significant within
the EU context, and on securing synergies between national
and EU activities.

Especially after enlargement, the EU should seek, overall,
2.4
to frame rules that are as simple and as clear as possible.
Although the internal and external programmes do vary in
terms of objectives and content, the breakdown into two regu-
lations is historically-based. In a bid to secure further simplifica-
the earliest
tion,
opportunity into a common set of more user-friendly rules.
Most of the provisions are identical and the differences that do
exist are generally without foundation. The proposed changes
to the regulations are also the same in terms of presentation of
proposals, decision-making and monitoring.

the two regulations should be merged at

Support

2.5
for information, promotion and advertising
activities for agricultural products and foodstuffs is also granted
under rural development provisions that differ from the rules
of the present regime. Leaving aside recent moves to make a
clearer distinction between the systems' different areas of appli-
cation, the Commission should, even at this stage, assess what
might be done to eliminate the overlap. Hence, there is no
reason to put off this discussion until a later date, as the
Commission proposes.

EU co-financing should continue in its present form and
2.6
the budget resources should be increased to take account of
enlargement and future requirements. The system can thus help
integrate and establish the single market in the various produc-

2.7
The scheme's limited use on third-country markets is
due not least to the requirement that the programmes apply
solely to generic campaigns. As a result, the member compa-
nies of the professional organisations are in many cases reluc-
tant to act and unwilling to become involved in programme
funding. Support for brand labels – and thus for individual
companies – is out of the question but if the measures are to
have any perceptible impact on export markets, the Commis-
sion must show some flexibility in campaigns and similar
ventures in accepting a balanced number of brand labels as an
integral part of the generic campaign. This makes it possible to
establish a link between the campaign message and the
products on the market endeavouring to combine the generic
with the specific to create common synergies. That in itself will
not affect the campaign message but it will help ensure that
buyers and customers can in practice find the products
included in any campaign. More attention is also being paid to
product origin across the EU. If, however, a market is already
brand-dominated, EU promotion action is of
limited added
value, as, in such cases, private brands will usually engage in
intense competition and use sizeable advertising budgets to
boost their market share.

2.8
There is no reason to change the co-financing rates
between Member States and professional organisations. The
problem is that certain Member States show a lack of commit-
ment or find it impossible to meet the co-financing require-
ment. This means that the professional organisations concerned
are precluded from taking up the schemes unless funding is
provided through parafiscal taxes. For reasons of administrative
the current degressive co-financing rates for
simplification,
multi-annual programmes should be eliminated and EU co-
financing should be set at 50 %.

2.9
The acceptance of parafiscal taxes as a source of finan-
cing already implies that de facto, certain organisations cover
50 %. This option should be retained. This means, however,
that the rules on the mandatory Member State share of 20 %
should be relaxed so that the Member States can decide case-
by-case on the share of financing they allocate to a programme.
That said, a minimum contribution of, say, 20 % from the orga-
nisation in question should be obligatory.

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The Committee feels that

2.10
it should be possible to
support measures to promote flowers and plants on third-
country markets in the same way as on the internal market.

It is an administrative burden and serves no objective
2.11
purpose to subject Member States'
financial contributions
under this scheme to the Treaty rules on state aid. Thus, as in
regional development measures, the proposed exemption from
the notification procedure should apply from the outset.

Given the administrative burden involved and the
2.12
considerable number of smaller programmes that have no
impact on the markets in question, a good option is to set a
minimum and
selected
programmes. Preference must be given to programmes whose
duration and budget are sufficient to secure a more effective
impact.

a maximum budget

the

for

2.13 With regard to organic products in the EU,
the
national and private certification and monitoring arrangements
must as far as possible be incorporated into the Union's
common regime for such products. This process is well under
way and should as far as possible be backed up by information
campaigns so as to establish a genuine internal market in
organic products to replace the national and private systems.
Information campaigns in third countries for EU organic
products have had only a limited impact to date. Establishing
the internal market in organic products is a prerequisite for
marketing such products in third countries. Up to now, difficul-
ties have arisen with regard to the mutual recognition of the
different schemes, for instance between the EU and the USA.

3. Specific comments

3.2
The proposed change in the selection of implementing
organisations represents a substantial simplification. Depending
on the nature of the campaign, there is also a need for the rele-
vant organisations themselves to carry out certain activities as
part of a programme, and the implementing body may be
selected after the proposal has been adopted by the Commis-
sion.

The proposed changes go some way towards meeting
3.3
the criticisms that have been voiced, among other things, about
the length of time involved from the presentation of proposals
to the final decision, the level of detail required at this early
stage, and the lack of transparency in the decisions. At the
same time, however, it is also important to consider relaxing
the onerous reporting requirements.

3.4
The proposed flexibility, allowing the Commission itself
to initiate information campaigns and promotion actions in a
bid to secure a fairer distribution across the various production
areas is a welcome move, given the preponderance of applica-
tions in the fruit and vegetable sectors, while other sectors have
received little or no attention. However, practical implementa-
tion raises a range of questions, such as the restrictions
contained in the Annexes which limit
the countries and
products that can be promoted by the EU.

3.5
The EU's organic logo should appear clearly in any
information and promotion activities so as to raise awareness
of the EU's certification and monitoring regime and to promote
the harmonisation of the national systems. The logo depicts the
twelve stars and symbolises the EU. Hence, the requirement to
have the EU flag visible on campaign material should, under
certain specific conditions, be toned down. The current require-
ments result in different EU symbols being used in the same
promotional material. There are also national environmental
logos and logos depicting the place of origin, with the result
that the message becomes blurred. Campaigns to support the
LIFE programme thus carry the LIFE logo, which also depicts
the twelve stars, and not the EU flag.

Consideration must be given to the possibility of more
3.1
radical action than that set out in the proposal with regard to
the internal division of remit and responsibility between the
Member States and the Commission. The same goes for the
need for simplification and a clearer division of responsibilities,
given the large number of committees and bodies involved in
drawing up the rules and in the process of selection, implemen-
tation, follow-up and monitoring. As a further measure, there-
fore, the proposal is to set up ad hoc working groups of repre-
sentatives from the Member States and/or experts with particu-
lar expertise in promotion and publicity matters who can
usefully advise the Commission in developing the strategy and
implementing measures of the regime.

The current requirement

3.6
that national environmental
logos are only admissible if more far-reaching national rules are
involved is discriminatory and runs counter to harmonisation.
The draft of the European environmental action plan (1) there-
fore proposes that national
logos be used alongside the EU
logo.

(1) Communication from the Commission to the Council and the Euro-
pean Parliament: European action plan for organic food and
farming, COM(2004) 415 final.

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3.7
The EESC calls upon the Commission to draw up a
procedural guide for operators that would help both them and
the authorities in their supervisory role, and thus benefit this
new Community promotional policy as a whole.

3.8
The implementation of these regulations is recent, but
some basic requirements are beginning to emerge which must
be considered for the future. The Commission should take care
to coordinate actions in different markets so as to avoid over-

lapping or mixed messages, which only detract from the effec-
tiveness of promotion.

4. Conclusion

4.1
The Commission proposal should be adopted, bearing in
mind the above comments on the need for further simplifica-
tion.

Brussels, 27 October 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

Opinion of the European Economic and Social Committee on ‘Industrial change and State aid in
the steel sector’

(2005/C 120/09)

On 29 January 2004, the European Economic and Social Committee decided to draw up an opinion,
under Rule 29(2) of its Rules of Procedure, on ‘Industrial change and State aid in the steel sector’.

The Consultative Commission on Industrial Change, which was responsible for the Committee's work on
the subject, adopted its opinion on 9 September 2004. The rapporteur was Mr Lagerholm and the co-
rapporteur was Mr Kormann.

At its 412th plenary session of 27 and 28 October 2004 (meeting of 27 October 2004), the European
Economic and Social Committee adopted the following opinion by 154 votes to 3 with 11 abstentions:

1. Introduction to the opinion and the aims and scope of

1.4

This own-initiative opinion has been triggered by:

the opinion; definition of terms used

— the expiry of the ECSC Treaty in 2002;

1.1
This own-initiative opinion focuses on the link between
industrial change and State aid, as illustrated by the example of
the steel sector.

— the privatisation and restructuring of the steel industry in
the central and eastern European countries (CEEC), linked
to the EU accession process;

1.2
The authors of this own-initiative opinion understand
the term ‘industrial change’ to mean the normal and ongoing
process, within an industrial sector, of reacting proactively to
dynamic trends within a branch of the economy in order to
remain competitive and to create opportunities for growth.

— the OECD negotiations on an international steel subsidy

agreement (SSA);

— the latest edition of the EU's State Aid Scoreboard;

1.3
Europe cannot remain aloof from ongoing industrial
change. In view of the fact that markets are, to an increasing
extent, becoming global markets, economic structures have to
be brought into line, sooner or later, with events taking place
on the world market. In this context the European Union must
endeavour to play an active role in defining the basic interna-
tional conditions.

— the

communication from the European Commission
entitled Fostering structural change: an industrial policy for an
enlarged Europe (COM(2004) 274 final) of April 2004; and

— the report from the Commission to the Council and the
European Parliament entitled: First monitoring report on steel
restructuring in the Czech Republic and Poland (COM(2004)
443 final) of 7 July 2004.