Proposal for a Council Decision on the conclusion of an agreement in the form of an exchange of letters between the European Community and Thailand pursuant to Article XXVIII of GATT 1994 relating to the modification of concessions with respect to rice provided for in EC Schedule CXL annexed to GATT 1994
Date: 2005-11-25
Institutions: European Commission
Subjects: Thailand, agreement (EU), rice, trading operation

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 25.11.2005 
COM(2005) 601 final 

2005/0230 (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 Thailand pursuant to Article XXVIII of GATT 1994 
relating to the modification of concessions with respect to rice provided for  
in EC Schedule CXL annexed to GATT 1994 

(presented by the Commission) 

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1. 

2. 

3. 

4. 

5. 

EXPLANATORY MEMORANDUM 

On 26 June 2003, the Council authorised the Commission to notify the WTO that the 
European  Community  intended  to  modify  concessions  on  products  of  HS  codes 
1006 20  (husked  rice),  1006 30  (milled  rice)  included  in  Schedule  CXL  of  the 
European  Community  annexed  to  GATT  1994.  Accordingly,  the  European 
Community has notified the WTO on 2 July 2003 of its intention to modify certain 
concessions in EC Schedule CXL. 

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,  having  a 
principal  supplying  interest  in  products  of  HS  code  1006 20  (husked  rice)  and 
substantial  supplier  interest  in  product  of  HS  code  1006 30  (milled  rice),  Thailand, 
having a principal supplying interest in product of HS code 1006 30 (milled rice) and 
substantial supplier  interest in product of HS code 1006 20  (husked  rice)  and  India 
and  Pakistan,  each  having  a  substantial  supplier  interest  in  product  of  HS  code 
1006 20 (husked rice). 

The  agreements  with  India  and  Pakistan  have  been  approved  on  behalf  of  the 
Community  by  Council  Decision  2004/617/EC  and  Council  Decision  2004/618/EC 
of 11 August 2004. A new tariff rate for husked and milled rice was fixed by Council 
Decision 2004/619/EC of 11 August 2004. The agreement with the United States was 
approved by Council Decision 2005/476/EC of 21 June 2005. 

This proposal asks the Council to approve the agreement in the form of an exchange 
of  letters  between  the  European  Community  and  Thailand.  This  completes  the 
negotiations  under  Article  XXVIII  of  GATT  1994  relating  to  the  modification  of 
concessions  with  respect  to  rice  provided  for  in  EC  Schedule  CXL  annexed  to 
GATT 1994. 

As  the  necessary  modifications  to  Council  Regulation  (EC)  No  1785/2003  require 
the European Parliament’s opinion it is necessary to provide for the Commission to 
put in place the necessary transitional arrangements. Therefore, in order to ensure the 
application  of  this  agreement  from  1  September  2005,  the  decision  enables  the 
Commission  to  derogate  from  Regulation  (EC)  No  1785/2003  for  a  transitional 
period,  i.e.  until  the  modification  has  entered  into  force,  but  not  later  than  30 June 
2006.  This  is  the  same  date  as  provided  in  Council  Decisions  2004/617/EC, 
2004/618/EC, 2004/619/EC and 2005/476/EC.  

The  Commission  will  present  a  proposal  for  the  necessary  modification  to  the 
Council Regulation as soon as possible. 

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2005/0230 (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 Thailand pursuant to Article XXVIII of GATT 1994 
relating to the modification of concessions with respect to rice provided for  
in EC Schedule CXL annexed to 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 Commission, 

Whereas: 

(1) 

(2) 

(3) 

On 26 June 2003, the Council authorised the Commission to open negotiations under 
Article XXVIII of the GATT 1994 with a view to modify certain concessions for rice. 
Accordingly,  the  European  Community  notified  the  WTO  on  2  July  2003  of  its 
intention to modify certain concessions in EC Schedule CXL. 

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, having a principal 
supplying  interest  in  products  of  HS  code  1006 20  (husked  rice)  and  substantial 
supplier  interest  in  products  of  HS  code  1006 30  (milled  rice),  Thailand,  having  a 
principal  supplying  interest  in  products  of  HS  code  1006 30  (milled  rice)  and 
substantial  supplier  interest  in  products  of  HS  code  1006 20  (husked  rice)  and  India 
and  Pakistan,  each  having  a  substantial  supplier  interest  in  products  of  HS  code 
1006 20 (husked rice). 

(4) 

The  agreements  with  India  and  with  Pakistan  have  been  approved  on  behalf  of  the 
Community  by  Council  Decisions  2004/617/EC1  and  2004/618/EC2  respectively.  A 
new tariff rate for husked rice (CN code 1006 20) and milled rice (CN code 1006 30) 

1 
2 

OJ L 279, 28.8.2004, p. 17. 
OJ L 279, 28.8.2004, p. 23. 

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was fixed by Council Decision 2004/619/EC3. The agreement with the United States 
was approved by Council Decision 2005/476/EC4. 

The  Commission  has  now  successfully  negotiated  an  agreement  in  the  form  of  an 
exchange  of  letters  between  the  European  Community  and  Thailand  which  should 
therefore be approved. 

In order to ensure that the agreement may be fully applied as from 1 September 2005 
and  pending  the  amendment  of  Council  Regulation  (EC)  No  1785/2003  of 
29 September  2003  on  the  common  organisation  of  the  market  in  rice5,  the 
Commission  should  be  authorised  to  adopt  temporary  derogations  from  that 
Regulation and to adopt the necessary implementing measures. 

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 Commission6, 

(5) 

(6) 

(7) 

HAS DECIDED AS FOLLOWS: 

Article 1 

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

The text of the agreement is attached to this Decision. 

Article 2 

1. 

2. 

1. 

3 
4 
5 
6 
7 

To  the  extent  necessary  to  permit  the  full  application  of  this  agreement  as  from 
1 September  2005, 
the  Commission  may  derogate  from  Regulation  (EC) 
No 1785/2003,  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 2006. 

The  Commission  shall  adopt  the  detailed  rules  for  implementing  the  agreement  in 
accordance with the procedure laid down in Article 3(2) of this Decision. 

Article 3 

The  Commission  shall  be  assisted  by  the  Management  Committee  for  Cereals 
instituted by Article 25 of Regulation (EC) No 1784/20037. 

OJ L 279, 28.8.2004, p. 29. 
OJ L 170, 1.7.2005, p. 67. 
OJ L 270, 21.10.2003, p. 96.  
OJ L 184, 17.7.1999, p. 23. 
OJ L 270, 21.10.2003, p. 78. 

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2. 

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 
Union. 

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ANNEX 

AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS 

between the European Community and Thailand pursuant to Article XXVIII of 
GATT 1994 relating to the modification of concessions with respect to rice  
provided for in EC Schedule CXL annexed to GATT 1994 

Letter No 1 

Letter from the European Community 

Sir, 

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

Brussels, ……….. 

1. 

2. 

3. 

4. 

5. 

The  bound  rates  of  duty  for  husked  rice  (HS  subheading  1006 20),  for  semi-milled 
and  milled  rice  (HS  subheading  1006 30)  and  for  broken  rice  (HS  subheading 
1006 40) shall be respectively EUR 65/t, EUR 175/t and EUR 128/t. 

The  EC  shall  apply  a  rate  of  duty  for  semi-milled  and  milled  rice  (HS  subheading 
1006 30) in accordance with paragraphs 3 to 6. 

The  Annual  Reference  Import  Level  shall  be  calculated  as  the  average  volume  of 
total semi-milled and milled rice imports entering the EC-25 from all origins in the 
marketing  years  (from  1  September  to  31  August)  2001/02–2003/04  plus  10%  (i.e. 
337 168 tonnes). 

Six-Month  Reference  Import  Level:  in  each  marketing  year,  a  six-month  reference 
import  level  shall  be  calculated  as  47  percent  of  the  annual  reference  import  level 
calculated in paragraph 3 above (i.e. 158 469 tonnes). 

Mid-Year Adjustment to Applied Tariff Rate: within 10 days after the end of the first 
six months of each marketing year, the EC shall review and, if necessary, adjust the 
applied tariff rate as follows: 

(a) 

(b) 

if actual semi-milled and milled rice imports for the just-completed six-month 
period are more than 15 percent above the six-month reference import level for 
that  period,  as  calculated  under  paragraph  4  above  (i.e.  more 
than 
182 239 tonnes), the EC shall apply a tariff rate of EUR 175/t; 

if actual semi-milled and milled rice imports for the just-completed six-month 
period  are  less  than  or  equal  to  the  six-month  reference  import  level  for  that 
period, as calculated under paragraph 4 above, increased by 15 percent (i.e. less 
than or equal to 182 239 tonnes), the EC shall apply a tariff rate of EUR 145/t. 

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For purposes of (a) and (b) above, actual semi-milled and milled rice imports 
are  all  imports  entering  the  EC-25  from  all  origins  under  the  HS  subheading 
1006 30. 

6. 

End-of-Year Adjustment to Applied Tariff Rate: within 10 days after the end of the 
marketing year, the EC shall review and, if necessary, adjust the applied tariff rate as 
follows: 

(a) 

(b) 

if actual semi-milled and milled rice imports for the just-completed marketing 
year are more than 15 percent above the annual reference import level for that 
12-month  period,  as  calculated  under  paragraph  3  above  (i.e.  more  than 
387 743 tonnes), the EC shall apply a tariff rate of EUR 175/t; 

if actual semi-milled and milled rice imports for the just-completed marketing 
year  are  less  than  or  equal  to  the  annual  reference  import  level  for  that 
12-month  period,  as  calculated  under  paragraph  3  above,  increased  by 
15 percent (i.e. less than or equal to 387 743 tonnes), the EC shall apply a tariff 
rate of EUR 145/t. 

For purposes of (a) and (b) above, actual semi-milled and milled rice imports 
are  all  imports  entering  the  EC-25  from  all  origins  under  the  HS  subheading 
1006 30. 

TRQ:  the  EC  shall  open  a  new  annual  TRQ  of  13 500  tonnes  of  semi-milled  and 
milled  rice  of  which  4 313  tonnes  shall  be  allocated  to  Thailand.  The  in-quota  rate 
shall be zero.  

Broken rice: for rice with HS subheading 1006 40, the EC shall apply an import duty 
of EUR 65/t. 

The volume of the current TRQ of broken rice shall be increased to 100 000 tonnes. 
The in-quota duty shall be equal to the duty of paragraph 8 above less 30.77 percent. 

Data:  the  calculation  of  the  annual  and  six-month  actual  import  levels  under 
paragraphs 5  and  6  above  shall  be  determined  using  EC  rice  imports  license  data. 
The EC shall publish these data on the internet on a weekly basis. 

Transparency: the EC shall promptly provide public notice of any adjustment in the 
applied tariff rate. 

Consultation:  at  the  request  of  either  party,  the  parties  shall,  within  30  days  of  the 
receipt  of  such  a  request,  enter  into  consultations  on  matters  covered  by  this 
agreement. 

7. 

8. 

9. 

10. 

11. 

12. 

13. 

The provisions of this agreement shall be applicable as from 1 September 2005.  

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 

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Letter No 2 

Letter from Thailand 

Bangkok, ……….. 

Sir, 

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

1. 

2. 

3. 

4. 

5. 

The  bound  rates  of  duty  for  husked  rice  (HS  subheading  1006 20),  for  semi-milled 
and  milled  rice  (HS  subheading  1006 30)  and  for  broken  rice  (HS  subheading 
1006 40) shall be respectively EUR 65/t, EUR 175/t and EUR 128/t. 

The  EC  shall  apply  a  rate  of  duty  for  semi-milled  and  milled  rice  (HS  subheading 
1006 30) in accordance with paragraphs 3 to 6. 

The  Annual  Reference  Import  Level  shall  be  calculated  as  the  average  volume  of 
total semi-milled and milled rice imports entering the EC-25 from all origins in the 
marketing  years  (from  1  September  to  31  August)  2001/02–2003/04  plus  10%  (i.e. 
337 168 tonnes). 

Six-Month  Reference  Import  Level:  in  each  marketing  year,  a  six-month  reference 
import  level  shall  be  calculated  as  47  percent  of  the  annual  reference  import  level 
calculated in paragraph 3 above (i.e. 158 469 tonnes). 

Mid-Year Adjustment to Applied Tariff Rate: within 10 days after the end of the first 
six months of each marketing year, the EC shall review and, if necessary, adjust the 
applied tariff rate as follows: 

(a) 

(b) 

if actual semi-milled and milled rice imports for the just-completed six-month 
period are more than 15 percent above the six-month reference import level for 
that  period,  as  calculated  under  paragraph  4  above  (i.e.  more 
than 
182 239 tonnes), the EC shall apply a tariff rate of EUR 175/t; 

if actual semi-milled and milled rice imports for the just-completed six-month 
period  are  less  than  or  equal  to  the  six-month  reference  import  level  for  that 
period, as calculated under paragraph 4 above, increased by 15 percent (i.e. less 
than or equal to 182 239 tonnes), the EC shall apply a tariff rate of EUR 145/t. 

For purposes of (a) and (b) above, actual semi-milled and milled rice imports 
are  all  imports  entering  the  EC-25  from  all  origins  under  the  HS  subheading 
1006 30. 

6. 

End-of-Year Adjustment to Applied Tariff Rate: within 10 days after the end of the 
marketing year, the EC shall review and, if necessary, adjust the applied tariff rate as 
follows: 

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(a) 

(b) 

if actual semi-milled and milled rice imports for the just-completed marketing 
year are more than 15 percent above the annual reference import level for that 
12-month  period,  as  calculated  under  paragraph  3  above  (i.e.  more  than 
387 743 tonnes), the EC shall apply a tariff rate of EUR 175/t; 

if actual semi-milled and milled rice imports for the just-completed marketing 
year  are  less  than  or  equal  to  the  annual  reference  import  level  for  that 
12-month  period,  as  calculated  under  paragraph  3  above,  increased  by 
15 percent (i.e. less than or equal to 387 743 tonnes), the EC shall apply a tariff 
rate of EUR 145/t. 

For purposes of (a) and (b) above, actual semi-milled and milled rice imports 
are  all  imports  entering  the  EC-25  from  all  origins  under  the  HS  subheading 
1006 30. 

TRQ:  the  EC  shall  open  a  new  annual  TRQ  of  13 500  tonnes  of  semi-milled  and 
milled  rice  of  which  4 313  tonnes  shall  be  allocated  to  Thailand.  The  in-quota  rate 
shall be zero.  

Broken rice: for rice with HS subheading 1006 40, the EC shall apply an import duty 
of EUR 65/t. 

The volume of the current TRQ of broken rice shall be increased to 100 000 tonnes. 
The in-quota duty shall be equal to the duty of paragraph 8 above less 30.77 percent. 

Data:  the  calculation  of  the  annual  and  six-month  actual  import  levels  under 
paragraphs 5  and  6  above  shall  be  determined  using  EC  rice  imports  license  data. 
The EC shall publish these data on the internet on a weekly basis. 

Transparency: the EC shall promptly provide public notice of any adjustment in the 
applied tariff rate. 

Consultation:  at  the  request  of  either  party,  the  parties  shall,  within  30 days  of  the 
receipt  of  such  a  request,  enter  into  consultations  on  matters  covered  by  this 
agreement. 

7. 

8. 

9. 

10. 

11. 

12. 

13. 

The provisions of this agreement shall be applicable as from 1 September 2005.  

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.  

For the Kingdom of Thailand 

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FINANCIAL STATEMENT 

1. 

BUDGET HEADING: 

Chapter 10 – Agricultural duties  

2. 

TITLE: 

PDB 2006 APPROPRIATIONS: 

EUR 763,5 Mio 

Proposal for a Council Decision on the conclusion of an agreement in  the form of an exchange of letters 
between the European Community and Thailand pursuant to Article XXVIII of GATT 1994 relating to the 
modification of concessions with respect to rice provided for in EC Schedule CXL annexed to GATT 1994 

3. 

LEGAL BASIS: 

Article 133 of the Treaty in conjunction with the first sentence of the first subparagraph of Article 300(2). 

4. 

AIMS: 

To set out the method of calculation of applied duties for rice. 

5. 

FINANCIAL IMPLICATIONS 

5.0 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
– 
(REFUNDS/INTERVENTIONS) 
– 
– 

NATIONAL AUTHORITIES 
OTHER 

5.1  REVENUE 

OWN RESOURCES OF THE EC  

– 
(LEVIES/CUSTOMS DUTIES) 
– 

NATIONAL 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 

5.2  METHOD OF CALCULATION: 

– 

12-MONTH 
PERIOD 

(EUR million) 

CURRENT 
FINANCIAL 
YEAR  2005 
(EUR million) 

FINANCIAL 
YEAR 2006 and 
following years 
(EUR million) 

– 

– 

– 

– 

– 

(1) 
– 6,3 

2007 

– 
(1) 

2008 

– 
(1) 

2009 

– 
(1) 

2010 

– 
(1) 

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 

RELEVANT CHAPTER OF THE CURRENT BUDGET? 

6.1  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? 

N / A 

N / A 

YES NO 

YES NO 

OBSERVATIONS: 

(1) It  is  estimated  that  the  measure  has  a  negative  financial  impact  on  forecast  of  own  resources  for  the  2006 
financial year and the following financial years. The level of the net amount is estimated to – EUR 6,3 million. 

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