Proposal for a COUNCIL DECISION concluding an Agreement in the form of an Exchange of Letters between the European Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedules of the Republic of Bulgaria and Romania in the course of their accession to the European Union
Date: 2011-02-11
Institutions: European Commission
Subjects: New Zealand, accession to the European Union, tariff quota, trade agreement (EU)

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EUROPEAN COMMISSION 

Brussels, 11.2.2011 
COM(2011) 58 final 

2011/0029 (NLE) 

Proposal for a 

COUNCIL DECISION  

concluding an Agreement in the form of an Exchange of Letters between the European 
Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of the General 
Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of 
concessions in the schedules of the Republic of Bulgaria and Romania in the course of 
their accession to the European Union 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

With the accession of the Republic of Bulgaria and Romania, the European Union enlarged its 
customs  union.  Consequently,  the  European  Union  was  obliged  under  WTO  rules  (GATT 
Article XXIV:6) to enter into negotiations with WTO Members having negotiating rights in 
the schedules of any of the acceding Members in order to agree on compensatory adjustment. 
Such adjustment is due if the adoption of the EU’s external tariff regime results in an increase 
in tariff beyond the level for which the acceding country has bound itself at the WTO, whilst 
taking ‘due account of reductions of duties on the same tariff line made by other constituents 
of the customs union upon its formation’. 

On  29  January  2007,  the  Council  authorised  the  Commission  to  open  negotiations  under 
Article  XXIV:6  of  GATT  1994.  The  Commission  has  negotiated  with  the  Members  of  the 
WTO  holding  negotiating  rights  with  respect  to  the  withdrawal  of  specific  concessions  in 
relation to the withdrawal of the schedules of the Republic of Bulgaria and Romania, in the 
course of their accession to the European Union.  

Negotiations with New Zealand resulted in a draft Agreement in the form of an Exchange of 
Letters that was initialled on 7 September 2010 in Brussels. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

Negotiations  have  been  conducted  by  the  Commission  within  the  framework  of  the 
negotiating directives issued by the Council. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

This proposal asks the Council to adopt a decision concluding the Agreement in the form of 
an Exchange of Letters with New Zealand. In parallel, a separate proposal on the signature of 
this Agreement is also submitted. 

The implementing Regulation will consequently be adopted by the Commission, pursuant to 
Article 144 of the Single Common Market Organisation (CMO) Regulation (Regulation (EC) 
No 1234/2007). 

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2011/0029 (NLE) 

Proposal for a 

COUNCIL DECISION  

concluding an Agreement in the form of an Exchange of Letters between the European 
Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of the General 
Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of 
concessions in the schedules of the Republic of Bulgaria and Romania in the course of 
their accession to the European Union 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207(4), first subparagraph, in conjunction with Article 218(6)(a)(v) thereof, 

Having regard to the proposal from the European Commission, 

Having regard to the consent of the European Parliament1, 

Whereas: 

(1) 

(2) 

(3) 

On 29 January 2007 the Council authorised the Commission to open negotiations with 
certain other Members of the WTO under Article XXIV:6 of the General Agreement 
on  Tariffs  and  Trade  (GATT)  1994,  in  the  course  of  the  accessions  to  the  European 
Community of the Republic of Bulgaria and Romania. 

Negotiations  have  been  conducted  by  the  Commission  within  the  framework  of  the 
negotiating directives issued by the Council. 

These  negotiations  have  been  concluded  and  an  Agreement  in  the  form  of  an 
Exchange  of  Letters  between  the  European  Union  and  New  Zealand  pursuant  to 
Article  XXIV:6  and  Article  XXVIII  of  the  General  Agreement  on  Tariffs  and  Trade 
(GATT)  1994  relating  to  the  modification  of  concessions  in  the  schedules  of  the 
Republic  of  Bulgaria  and  Romania  in  the  course  of  their  accession  to  the  European 
Union was initialled on 7 September 2010. 

(4) 

The  Agreement  was  signed  on  behalf  of  the  European  Union  on  […],  subject  to  the 
conclusion of the Agreement at a later date, in accordance with Council Decision […]. 

(5) 

The Agreement should be concluded, 

1 

OJ C […], […], p. […]. 

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HAS ADOPTED THIS DECISION:  

Article 1 

The Agreement in the form of an Exchange of Letters between the European Union and New 
Zealand pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs 
and  Trade  (GATT)  1994  relating  to  the  modification  of  concessions  in  the  schedules  of  the 
Republic of Bulgaria and Romania in the course of their accession to the European Union, is 
hereby concluded. 

The text of the Agreement is annexed to this Decision. 

Article 2 

The President of the Council shall designate the person empowered to proceed, on behalf of 
the European Union, to the notification provided for in the Agreement, in order to express the 
consent of the European Union to be bound by the Agreement. 

Article 3 

This  Decision  shall  enter  into  force  on  the  day  of  its  adoption.  It  shall  be  published  in  the 
Official Journal of the European Union. 

The date of entry into force of the Agreement shall be published in the Official Journal of the 
European Union. 

Done at […], 

For the Council 
The President 

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AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS 

ANNEX 

between the European Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII 
of  the  General  Agreement  on  Tariffs  and  Trade  (GATT)  1994  relating  to  the  modification  of 
concessions  in  the  schedules  of  the  Republic  of  Bulgaria  and  Romania  in  the  course  of  their 
accession to the European Union 

A. Letter from the European Union 

[…], […] 

Sir,  

Following negotiations under Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs 
and Trade 1994 (GATT) relating to the modification of the Schedules of the Republic of Bulgaria and 
Romania  in  the  course  of  their  accession  to  the  European  Union,  I  have  the  honour  to  propose  the 
following: 

1.  The  European  Union  shall  incorporate  in  its  schedule,  for  the  customs  territory  of  the  EU  27,  the 
concessions contained in the schedule of the EU 25 with the following modifications: 

Add  400  tonnes  (carcase  weight) to  the  allocation  for  New  Zealand  under  the  EU  tariff  rate 
quota 'meat of sheep or goats, fresh, chilled or frozen', maintaining the present in-quota rate of 
0% 

Create an erga omnes allocation of 200 tonnes (carcase weight) under the EU tariff rate quota 
'meat of sheep or goats, fresh, chilled or frozen', maintaining the present in- quota rate of 0% 

Adjust the EU tariff rate quota ‘live sheep, other than pure-bred breeding animals’, with an in-
quota  rate  10%,  by  removing  the  allocations  of  1010  tonnes  (Romania)  and  4255  tonnes 
(Bulgaria) 

Adjust  the  EU  tariff  rate  quota  'meat  of  sheep  or  goats,  fresh,  chilled  or  frozen',  with  an  in-
quota  rate  0%,  by  removing  the  allocations  of  75  tonnes  (Romania)  and  1250  tonnes 
(Bulgaria) 

Change the definition of the EU tariff rate quota of 1300 tonnes 'high quality beef' in the EU 
WTO  schedule  to:  'High  quality  meat  of  bovine  animals  fresh,  chilled  or  frozen.  Supplying 
country  New  Zealand.  Qualification  for  the  quota  is  subject  to  conditions  laid  down  in  the 
relevant EU provisions'. 

2.  The  European  Union  shall  also  replace  the  definition  of  high  quality  beef  in  the  European  Union 
regulations  implementing  this  quota  by  the  following:  'Selected  beef  cuts  derived  from  exclusively 
pasture  grazed  steers  or  heifers,  the  carcases  of  which  have  a  dressed  weight  of  not  more  than  370 
kilograms. The carcases shall be classified as A, L, P, T or F, be trimmed to a fat depth of P or lower 
and have a muscling classification of 1 or 2 according to the carcase classification system administered 
by the New Zealand Meat Board'.  

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3. New Zealand accepts the European Union's approach to netting-out of tariff rate quotas as a way of 
adjusting  the  GATT  obligations  of  the  EU  25  and  those  of  the  Republic  of  Bulgaria  and  Romania 
following the recent enlargement of the European Union.  

4. Consultations may be held at any time with regard to any of the above matters at the request of either 
Party. 

I should be obliged if you would confirm that your Government is in agreement with the content of this 
letter. Should this be the case, this letter and your confirmation shall together constitute an Agreement 
in  the  form  of  an  Exchange  of  Letters  between  the  European  Union  and  New  Zealand  (the 
‘Agreement’). 

The  European  Union  and  New  Zealand  shall  notify  each  other  the  completion  of  their  internal 
procedures  for  the  entry  into  force  of  the  Agreement.  The  Agreement  shall  enter  into  force  14  days 
after the date of receipt of the latest notification.  

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

For the European Union 

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B. Letter from New Zealand 

[…], […] 

Sir,  

I have the honour to acknowledge the receipt of your letter of […], which reads as follows: 

"Following  negotiations  under  Article  XXIV:6  and  Article  XXVIII  of  the  General  Agreement  on 
Tariffs  and  Trade  1994  (GATT)  relating  to  the  modification  of  the  Schedules  of  the  Republic  of 
Bulgaria  and  Romania  in  the  course  of  their  accession  to  the  European  Union,  I  have  the  honour  to 
propose the following: 

1.  The  European  Union  shall  incorporate  in  its  schedule,  for  the  customs  territory  of  the  EU  27,  the 
concessions contained in the schedule of the EU 25 with the following modifications: 

Add  400  tonnes  (carcase  weight) to  the  allocation  for  New  Zealand  under  the  EU  tariff  rate 
quota 'meat of sheep or goats, fresh, chilled or frozen', maintaining the present in-quota rate of 
0% 

Create an erga omnes allocation of 200 tonnes (carcase weight) under the EU tariff rate quota 
'meat of sheep or goats, fresh, chilled or frozen', maintaining the present in- quota rate of 0% 

Adjust the EU tariff rate quota ‘live sheep, other than pure-bred breeding animals’, with an in-
quota  rate  10%,  by  removing  the  allocations  of  1010  tonnes  (Romania)  and  4255  tonnes 
(Bulgaria) 

Adjust  the  EU  tariff  rate  quota  'meat  of  sheep  or  goats,  fresh,  chilled  or  frozen',  with  an  in-
quota  rate  0%,  by  removing  the  allocations  of  75  tonnes  (Romania)  and  1250  tonnes 
(Bulgaria) 

Change the definition of the EU tariff rate quota of 1300 tonnes 'high quality beef' in the EU 
WTO  schedule  to:  'High  quality  meat  of  bovine  animals  fresh,  chilled  or  frozen.  Supplying 
country  New  Zealand.  Qualification  for  the  quota  is  subject  to  conditions  laid  down  in  the 
relevant EU provisions'. 

2.  The  European  Union  shall  also  replace  the  definition  of  high  quality  beef  in  the  European  Union 
regulations  implementing  this  quota  by  the  following:  'Selected  beef  cuts  derived  from  exclusively 
pasture  grazed  steers  or  heifers,  the  carcases  of  which  have  a  dressed  weight  of  not  more  than  370 
kilograms. The carcases shall be classified as A, L, P, T or F, be trimmed to a fat depth of P or lower 
and have a muscling classification of 1 or 2 according to the carcase classification system administered 
by the New Zealand Meat Board'.  

3. New Zealand accepts the European Union's approach to netting-out of tariff rate quotas as a way of 
adjusting  the  GATT  obligations  of  the  EU  25  and  those  of  the  Republic  of  Bulgaria  and  Romania 
following the recent enlargement of the European Union.  

4. Consultations may be held at any time with regard to any of the above matters at the request of either 
Party. 

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I should be obliged if you would confirm that your Government is in agreement with the content of this 
letter. Should this be the case, this letter and your confirmation shall together constitute an Agreement 
in  the  form  of  an  Exchange  of  Letters  between  the  European  Union  and  New  Zealand  (the 
‘Agreement’). 

The  European  Union  and  New  Zealand  shall  notify  each  other  the  completion  of  their  internal 
procedures  for  the  entry  into  force  of  the  Agreement.  The  Agreement  shall  enter  into  force  14  days 
after the date of receipt of the latest notification.  

I hereby have the honour to express my Government's agreement with the above letter. 

On behalf of New Zealand 

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