Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL concerning the implementation of the Agreements concluded by the EU following negotiations in the framework of Article XXVIII of GATT 1994, amending and supplementing Annex I to Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff
Date: 2012-03-16
Institutions: European Commission
Subjects: Brazil, Thailand, import (EU), poultry, poultrymeat, tariff preference, tariff quota

EUROPEAN COMMISSION 

Brussels, 16.3.2012  
COM(2012) 115 final 

2012/0054 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

concerning the implementation of the Agreements concluded by the EU following 
negotiations in the framework of Article XXVIII of GATT 1994, amending and 
supplementing Annex I to Regulation (EEC) No 2658/87 on the tariff and statistical 
nomenclature and on the Common Customs Tariff 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Negotiations  under  Article  XXVIII  of  GATT  1994  concluded  on  poultry  in  2007  (OJ  L138 
30.5.2007) covered tariff lines on poultry meat under heading 0210 as well as one processed 
poultry line, 1602 32 19 in the EC Schedule CXL: cooked preparations containing more than 
57% of poultry meat. Limiting the negotiations to the processed poultry line 1602 32 19 was 
considered  to  sufficiently  prevent  potential  substitution  effects.  Subsequent  import  data, 
however,  showed  a  dramatic  import  surge  of  processed  poultry  meat  under  tariff  line 
1602 32 30:  preparations  containing  25%  or  more  but  less  than  57%  by  weight  of  poultry 
meat or offal. This indicated that exporters seemed to take advantage of a relative gap in the 
EU level of protection, substituting poultry preparations containing more than 57% of poultry 
meat  with  preparations  containing  less  than  57%,  under  tariff  line  1602 32 30.  Comparable 
substitution effects were to be expected under other 1602 tariff lines in the future. In order to 
comprehensively  address  these  substitution  effects  affecting  the  EU  poultry  industry,  the 
Commission  requested  from  the  Council  the  authorisation  to  renegotiate  the  concessions  on 
poultry meat under Chapter 16 of the CN. 

On  25  May  2009  the  Council  authorised  the  Commission  to  open  negotiations  under 
Article XXVIII of the GATT 1994 (COM proposal 8615/09 WTO 72 AGRI 166) with a view 
to the renegotiation of concessions on poultry meat tariff lines under Chapter 16 of the CN.  

On 16 June 2009 the communication of the EU's intention to modify the concessions on items 
1602 20 10,  1602  32 11,  1602 32 30,  1602 32 90,  1602 39 21,  1602 39 29,  1602 39 40  and 
1602 39 80  included  in  Schedule  CXL  of  the  European  Communities  was  circulated  to  the 
other WTO Members. 

Negotiations have been conducted by the Commission in consultation with the Trade Policy 
Committee and within the framework of the negotiating directives issued by the Council. 

The Commission has negotiated with the Federal Republic of Brazil and with the Kingdom of 
Thailand holding each principal supplying interests and/or substantial interests in various of 
the tariff lines concerned. 

The  Commission  has  negotiated  with  the  Federal  Republic  of  Brazil,  holding  a  principal 
supplying  interest  in  products  of  HS  codes  1602 32 11  (Processed  chicken  meat,  uncooked, 
containing 57% or more by weight of poultry meat or offal), 1602 32 30 (Processed chicken 
meat,  containing  25%  or  more  but  less  than  57%  by  weight  of  poultry  meat  or  offal)  and 
1602 32 90 (Processed chicken meat, containing less than 25% by weight of poultry meat or 
offal) and with the Kingdom of Thailand, holding a principal supplying interest in products of 
HS codes 1602 39 21 (Processed duck, geese, guinea fowl meat, uncooked, containing 57% or 
more  by  weight  of  poultry  meat  or  offal),  1602 39 29  (Processed  duck,  geese,  guinea  fowl 
meat,  cooked,  containing  57%  or  more  by  weight  of  poultry  meat  or  offal),  1602 39 40 
(Processed  duck,  geese,  guinea  fowl  meat,  cooked,  containing  more  than  25%  but  less  than 
57% by weight of poultry meat or offal) and 1602 39 80 (Processed duck, geese, guinea fowl 
meat, cooked, containing less than 25% by weight of poultry meat or offal) and a substantial 
interest  in  products  of  HS  code  1602 32 30  (Processed  chicken  meat,  containing  more  than 
25% but less than 57% by weight of poultry meat or offal) and 1602 32 90 (Processed chicken 
meat, containing less than 25% by weight of poultry meat or offal). 

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The  negotiations  have  resulted  in  Agreements  in  the  form  of  exchanges  of  letters  initialled 
with the Kingdom of Thailand on 22 November 2011 and with the Federal Republic of Brazil 
on 7 December 2011. 

The agreements were negotiated on the basis of the Combined Nomenclature codes in force at 
the time. 
In the newest version of Annex I to Council Regulation (EEC) No 2658/87 on the tariff and 
statistical  nomenclature  and  on  the  Common  Customs  Tariff  as  laid  down  in  Commission 
Regulation  (EU)  No  1006/2011  published  in  OJ L 282  of  28  October  2011,  the  tariff  lines 
1602 39 40 and 1602 39 80 have been merged into a new tariff line 1602 39 85. It is therefore 
appropriate to reflect this new situation in the present implementing regulation. 

The  autonomous  Customs  duty  rates  for  the  tariff  lines  covered  by  the  negotiations  are 
currently set at levels below the new conventional duty rates resulting from the modification 
of  concessions  pursuant  to  Article XXVIII  of  GATT 1994.  However,  under  Council 
Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common 
Customs Tariff, the autonomous customs duties apply when they are below the conventional 
duties. 

The  autonomous  rate  of  duty  fixed  in  the  Common  Customs  Tariff  should  therefore  be 
increased to the level of the conventional duty in the present implementing regulation.  

2. 

BUDGETARY IMPLICATION  

See Financial Fiche in Annex. 

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2012/0054 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

concerning the implementation of the Agreements concluded by the EU following 
negotiations in the framework of Article XXVIII of GATT 1994, amending and 
supplementing Annex I to Regulation (EEC) No 2658/87 on the tariff and statistical 
nomenclature and on the Common Customs Tariff 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207(2) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

Council  Regulation  (EEC)  No  2658/87(1)  established  a  goods  nomenclature, 
hereinafter referred to as the "Combined Nomenclature", and set out the conventional 
duty rates of the Common Customs Tariff.  

By  its  decision  …  concerning  the  conclusion  of  Agreements  between  the  European 
Union and the Federal Republic of Brazil, and between the European Union and the 
Kingdom  of  Thailand,  the  Council  concluded,  on  behalf  of  the  Union,  the  before 
mentioned  Agreements  with  a  view  to  closing  negotiations  initiated  pursuant  to 
Article XXVIII of GATT 1994.  

The agreements were negotiated on the basis of the Combined Nomenclature codes in 
force at the time. 

In  the  newest  version  of  Annex  I  to  Council  Regulation  (EEC)  No  2658/87  on  the 
tariff and statistical nomenclature and on the Common Customs Tariff as laid down in 
Commission  Regulation  (EU)  No  1006/2011  published  in  OJ  L  282  of  28  October 
2011, the tariff lines 1602 39 40 and 1602 39 80 have been merged into a new tariff 
line 1602 39 85. The Annex to this Regulation reflects this new situation.  

The autonomous Customs duty rates for the tariff lines covered by the negotiations are 
currently  set  at  levels  below  the  new  conventional  duty  rates  resulting  from  the 
modification  of  concessions  pursuant  to  Article XXVIII  of  GATT 1994.  However, 
under Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature 

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and on the Common Customs Tariff, the autonomous customs duties apply when they 
are below the conventional duties. 

The autonomous rate of duty fixed in the Common Customs Tariff should therefore be 
increased to the level of the conventional duty.  

Annex I to Council Regulation (EEC) No 2658/87 should be amended accordingly and 
the autonomous and conventional duties set at the determined level. 

(6) 

(7) 

HAVE ADOPTED THIS REGULATION: 

Article 1 

In Regulation (EEC) No 2658/87, Part Two of Annex I (Schedule of Customs Duties) shall be 
amended with the duties shown in the Annex to this Regulation. 

The autonomous duties shall be set at the level of the conventional duties. 

Article 2 

In Regulation (EEC) No 2658/87 Annex 7 of Section III of Part Three (WTO tariff quotas to 
be opened by the Competent Community Authorities) shall be amended with the tariff quotas 
and supplemented with the volumes and duties shown in the Annex of this Regulation. 

This Regulation shall enter into force on [x]1 

Article 3 

This Regulation shall be binding in its entirety and directly applicable in all Member States in 
accordance with the Treaties. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

1 

The date of entry into force of the regulation should be the same as the date of entry into force of the 
two  agreements.  In  order  to  ensure  that  both  agreements  enter  into  force  on  the  same  date,  the 
notification  provided  in  the  agreements  to  the  effect  that  the  Union  has  concluded  its  internal 
procedures should not be made until the notifications from both Thailand and Brazil have been received 
by the Union. Both notifications by the Union should then be made on the same date. 

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ANNEX 

Notwithstanding  the  rules  for  the  interpretation  of  the  Combined  Nomenclature,  the  wording  for  the 
description  of  the  products  is  to  be  considered  as  having  no  more  than  an  indicative  value,  the 
concessions being determined, within the context of this Annex, by the coverage of the CN codes as 
they exist at the time of adoption of the current Regulation. 

Part Two 
Schedule of Customs Duties 

CN code 

Description 

Duty rate (autonomous and 
conventional) 

1602 32 11 

Processed  chicken  meat,  uncooked,  containing  57  %  or  more 
by weight of poultry meat or offal 

2 765 €/ton 

1602 32 30  

Processed  chicken  meat,  containing  25  %  or  more  but  less 
than 57 % by weight of poultry meat or offal 

2 765 €/ton 

1602 32 90 

1602 39 21 

1602 39 29 

1602 39 85 

Processed chicken meat, containing less than 25 % by weight 
of poultry meat or offal 

2 765 €/ton 

Processed  duck,  geese,  guinea 
containing 57 % or more by weight of poultry meat or offal 

fowl  meat,  uncooked, 

2 765 €/ton 

Processed  duck,  geese,  guinea  fowl  meat,  cooked,  containing 
57 % or more by weight of poultry meat or offal 

2 765 €/ton 

Processed duck, geese, guinea fowl meat, containing less than 
57 % by weight of poultry meat or offal 

2 765 €/ton 

Part Three 
Tariff Annexes 

Description 

Duty rate 

CN code 

1602 32 11 

Processed  chicken  meat,  uncooked,  containing  57  %  or  more 
by weight of poultry meat or offal  

1602 32 30  

Processed  chicken  meat,  containing  25  %  or  more  but  less 
than 57 % by weight of poultry meat or offal  

Open a tariff quota of 16 140 tonnes, of 
which 15 800 tonnes shall be allocated 
to Brazil 

In-quota rate: 630 €/ton 

Open a tariff quota of 79 705 tonnes, of 
which 62 905 tonnes shall be allocated 
to Brazil and 14 000 tonnes to Thailand 

In-quota rate: 10,9 % 

1602 32 90 

Processed chicken meat, containing less than 25 % by weight 
of poultry meat or offal 

Open a tariff quota of 2 865 tonnes, of 
which 295 tonnes shall be allocated to 

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1602 39 21 

Processed  duck,  geese,  guinea 
containing 57 % or more by weight of poultry meat or offal 

fowl  meat,  uncooked, 

Open a tariff quota of 10 tonnes for 
Thailand 

Brazil and 2 100 tonnes to Thailand 

In-quota rate: 10,9 % 

1602 39 29 

Processed  duck,  geese,  guinea  fowl  meat,  cooked,  containing 
57 % or more by weight of poultry meat or offal 

ex 1602 39 85 

Processed duck, geese, guinea fowl meat, containing 25 % or 
more but less than 57 % by weight of poultry meat or offal 

ex 1602 39 85 

Processed duck, geese, guinea fowl meat, containing less than 
25 % by weight of poultry meat or offal  

In-quota rate: 630 €/ton 

Open a tariff quota of 13 720 tonnes, of 
which 13 500 tonnes shall be allocated 
to Thailand  

In-quota rate: 10,9 % 

Open a tariff quota of 748 tonnes, of 
which 600 tonnes shall be allocated to 
Thailand 

In-quota rate: 10,9 % 

Open a tariff quota of 725 tonnes, of 
which 600 tonnes shall be allocated to 
Thailand 

In-quota rate: 10,9 % 

The exact tariff description of the EU WTO Schedule shall apply to all tariff lines and quotas above. 

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FINANCIAL STATEMENT 

BUDGET HEADING: 
Chapter 12 – Custom duties and other duties  

Fichefin/11/ 1163357 
DDG/GM/nh 
6.146.2011.1 

DATE: 06/10/2011 

APPROPRIATIONS: 
DB2012: 19 171.2 M€ 

TITLE: 
Proposal for a Regulation of the European Parliament and of the Council concerning the implementation of 
the Agreements concluded by the EU following negotiations in the framework of Article XXVIII of GATT 
1994, amending and supplementing Annex I to Regulation (EEC) No 2658/87 on the tariff and statistical 
nomenclature and on the Common Customs Tariff. 

LEGAL BASIS: 
Treaty on the Functioning of the European Union, and in particular Articles 207 and 218. 

AIMS: 
To  implementing  the  import  Agreement  between  EU  –  Brazil  and  Thailand,  in  order  to  address  the 
substitution effects of imports affecting the EU poultry industry.  

1. 

2. 

3. 

4. 

5. 

FINANCIAL IMPLICATIONS 

12 MONTH 
PERIOD 

(EUR million) 

CURRENT 
FINANCIAL 
YEAR 2011  
(EUR million) 

FOLLOWING 
FINANCIAL 
YEAR 2012 
(EUR million) 

5.0 

5.1 

CHARGED TO THE EC BUDGET 

NATIONAL AUTHORITIES 
OTHER 

EXPENDITURE 
- 
(REFUNDS/INTERVENTIONS) 
- 
- 
REVENUE 
- 
(LEVIES/CUSTOMS DUTIES) 
NATIONAL 
- 

OWN RESOURCES OF THE EC  

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 
5.2  METHOD OF CALCULATION: - 
6.0 

- 

-  

- 

-  

- 

- 1.4  

2013 

2014 

2015 

- 

- 

- 

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? 

YES NO 

YES NO 

YES NO 

YES NO 

OBSERVATIONS: 
Following  negotiations  under  Article  XXVIII  of  GATT  1994,  started  mid-2009  with  Brazil  and  Thailand,  the 
measure aims to implementing the import Agreement between EU – Brazil and Thailand*, in order to address the 
substitution effects of imports affecting the EU poultry industry. The implementation of the agreement concerns: 
- an increase the out-of-quota rates for 7 tariff lines of processed poultry meat products, and, 
-  opening  TRQs  for  the  same  7  tariff  lines  of  processed  poultry  meat  products,  for  Brazil,  Thailand  and  other 
countries. 
The import volume of the quota is similar to the quantity imported prior to this agreement. There is no effect on the 
internal market balance that could lead to needs for market instruments. In case of import of the total quota under 
this  draft  regulation,  it  can  be  estimated  that  the  measure  could  involve  a  reduction  of  own  resources  of  an 
approximated net amount of EUR 1.4 million, after deduction of 25% of collection costs by Member States.  
* Financial Statement of the conclusion of the Agreement: No 1163256/2011.  

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