Proposal for a COUNCIL DECISION authorising the signature of an Agreement in the form of an Exchange of Letters between the European Union and Australia 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: 2011-02-14
Institutions: European Commission
Subjects: Australia, accession to the European Union, tariff quota, trade agreement (EU)

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EUROPEAN COMMISSION 

Brussels, 14.2.2011 
COM(2011) 53 final 

2011/0031 (NLE) 

Proposal for a 

COUNCIL DECISION 

authorising the signature of an Agreement in the form of an Exchange of Letters 
between the European Union and Australia 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  Australia  resulted  in  a  draft  Agreement  in  the  form  of  an  Exchange  of 
Letters that was initialled on 15 June 2010 in Geneva. 

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 authorise the signature of the Agreement in the form of an 
Exchange of Letters with Australia. In parallel, a separate proposal on the conclusion of this 
Agreement is also submitted. 

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

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2011/0031 (NLE) 

Proposal for a 

COUNCIL DECISION  

authorising the signature of an Agreement in the form of an Exchange of Letters 
between the European Union and Australia 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, 

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  Australia  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 15 June 2010. 

(4) 

This  Agreement  should  be  signed  on  behalf  of  the  European  Union,  subject  to  its 
conclusion at a later date, 

HAS ADOPTED THIS DECISION: 

Article 1 

The signing of the Agreement between the European Union and Australia 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 approved on behalf 
of the European Union, subject to the conclusion of the said agreement. 

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The text of the Agreement to be signed is annexed to this Decision. 

Article 2 

The Decision shall enter into force on the day of its adoption. 

This Decision 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 Australia 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  will  incorporate  in  its  schedule,  for  the  customs  territory  of  the  EU  27,  the 
concessions granted and applied for the EU 25 with the following modifications: 

Add 400 tonnes (carcase weight) to the allocation for Australia 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). 

2. The European Union will ensure that the full additional allocation of 400 tonnes for Australia under 
the EU tariff rate quota 'meat of sheep or goats, fresh, chilled or frozen', is available in the first annual 
quota period which applies on the date of entry into force of the agreement, and in each annual quota 
period thereafter. 

3.  Australia  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 will together constitute an Agreement in 
the form of an Exchange of Letters between the European Union and Australia. 

The European Union and Australia will notify each other the completion of their internal procedures 
for the entry into force of the agreement. The agreement will enter into force 14 days after the date of 
the latest notification. 

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

For the European Union 

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B. Letter from Australia 

[…], […] 

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  will  incorporate  in  its  schedule,  for  the  customs  territory  of  the  EU  27,  the 
concessions granted and applied for the EU 25 with the following modifications: 

Add 400 tonnes (carcase weight) to the allocation for Australia 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). 

2. The European Union will ensure that the full additional allocation of 400 tonnes for Australia under 
the EU tariff rate quota 'meat of sheep or goats, fresh, chilled or frozen', is available in the first annual 
quota period which applies on the date of entry into force of the agreement, and in each annual quota 
period thereafter. 

3.  Australia  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 will together constitute an Agreement in 
the form of an Exchange of Letters between the European Union and Australia. 

The European Union and Australia will notify each other the completion of their internal procedures 
for the entry into force of the agreement. The agreement will enter into force 14 days after the date of 
the latest notification." 

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

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On behalf of Australia 

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