Proposal for a COUNCIL DECISION on the signing, on behalf of the European Union, of the Agreement in the form of an Exchange of Letters between the European Union and the People's Republic of China 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: 2012-11-07
Institutions: European Commission
Subjects: Bulgaria, China, GATT, Romania, accession to the European Union, agreement (EU), signature of an agreement

EUROPEAN 
COMMISSION 

Brussels, 7.11.2012  
COM(2012) 640 final 

2012/0303 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the signing, on behalf of the European Union, of the Agreement in the form of an 
Exchange of Letters between the European Union and the People's Republic of China 
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  World  Trade 
Organization  (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 tariffs beyond the level for which the acceding 
country had 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 therefore 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 the People's Republic of China resulted in a draft Agreement in the form of 
an Exchange of Letters that was initialled on 31 May 2012. 

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.  The  Council  (Trade  Policy  Committe)  and  the 
European  Parliament  (INTA  Committee)  were  informed  of  the  text  of  the  draft  agreement 
prior to it being initialled. 

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 the People's Republic of China. In parallel, a separate proposal on 
the conclusion of this Agreement is also submitted. 

The ensuing implementing Regulation will be adopted by the Commission, pursuant to Article 
144  of  the  Single  Common  Market  Organisation  (CMO)  Regulation  (Regulation  (EC)  No 
1234/2007)  and  to  Article  7  of  the  Regulation  (EC)  No  1216/2009  laying  down  the  trade 
arrangements  applicable  to  certain  goods  resulting  from  the  processing  of  agricultural 
products. 

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2012/0303 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the signing, on behalf of the European Union, of the Agreement in the form of an 
Exchange of Letters between the European Union and the People's Republic of China 
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 the 
first subparagraph of Article 207(4), in conjunction with Article 218(5) 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 World Trade Organization under Article XXIV:6 of the 
General Agreement on Tariffs and Trade (GATT) 1994, in the course of the accession 
to the European Union of the Republic of Bulgaria and Romania. 

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

These  negotiations  have  been  concluded  and  the  Agreement  in  the  form  of  an 
Exchange of Letters between the European Union and the People's Republic of China 
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 Agreement') was initialled on 31 May 2012. 

(4) 

The Agreement should be signed, 

HAS ADOPTED THIS DECISION: 

Article 1 

The signing of the Agreement in the form of an Exchange of Letters between the European 
Union and the People's Republic of China 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 

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accession  to  the  European  Union  ('the  Agreement')  is  hereby  authorised  on  behalf  of  the 
Union, subject to the conclusion of the said Agreement. 

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

The  President  of  the  Council  is  hereby  authorised  to  designate  the  person(s)  empowered  to 
sign the Agreement on behalf of the Union. 

Article 2 

Article 3 

This Decision shall enter into force on the date of its adoption. 

Done at Brussels,  

For the Council 
The President 

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AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS 

ANNEX 

Between  the  European  Union  and  the  People's  Republic  of  China  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 

Place, date 

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: 

The European Union shall  incorporate in its schedule,  for  the  customs  territory of the EU 27, 

1. 
the concessions contained in the schedule of the EU 25 with the following modifications: 

On tariff line 0703 20 00 add 12 375 tonnes to the allocation for People's Republic of China 
under the EU tariff rate quota for garlic, maintaining the present in quota rate of 9.6%. 

Add 800 tonnes (drained net weight) to the allocation for People's Republic of China under the 
EU tariff rate quota for mushroom of species agaricus, prepared or preserved otherwise than 
by vinegar (tariff item number 2003 10 30, out of quota rate 18.4 + 222.0€/100kg/net eda) and 
mushroom of species agaricus, provisionally preserved or preserved otherwise than by vinegar 
(tariff item number 2003 10 20, out of quota rate 18.4 + 191.0€/100kg/net ed a), in quota rate 
23%; inclusion of tariff line 0711 51 00 (out of quota rate 9.6 + 191 €/100 kg/net eda) in the 
quota. 

Create a tariff rate quota of 2 026 tonnes (erga omnes) for chocolate with an in-quota rate of 
38% (tariff items numbers 1806 20, 1806 31, 1806 32 and 1806 90). 

Create a tariff rate quota of 2 289 tonnes (erga omnes) for confectionary with an in-quota rate 
of 35% (tariff item number 1704). 

Create a tariff rate quota of 409 tonnes (erga omnes) for biscuits with an in-quota rate of 40% 
(tariff item number 1905 90). 

People's Republic of China accepts the European Union's approach to netting-out of tariff rate 
2. 
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.  

The European Union and the People's Republic of China 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.  

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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 the People's Republic of China. 

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

For the European Union 

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B. Letter from the People's Republic of China 

Place, date 

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: 

The European Union shall  incorporate in its schedule,  for  the  customs  territory of the EU 27, 

1. 
the concessions contained in the schedule of the EU 25 with the following modifications: 

On tariff line 0703 20 00 add 12 375 tonnes to the allocation for People's Republic of China 
under the EU tariff rate quota for garlic, maintaining the present in quota rate of 9.6%. 

Add 800 tonnes (drained net weight) to the allocation for People's Republic of China under the 
EU tariff rate quota for mushroom of species agaricus, prepared or preserved otherwise than 
by vinegar (tariff item number 2003 10 30, out of quota rate 18.4 + 222.0€/100kg/net eda) and 
mushroom of species agaricus, provisionally preserved or preserved otherwise than by vinegar 
(tariff item number 2003 10 20, out of quota rate 18.4 + 191.0€/100kg/net ed a), in quota rate 
23%; inclusion of tariff line 0711 51 00 (out of quota rate 9.6 + 191 €/100 kg/net eda) in the 
quota. 

Create a tariff rate quota of 2 026 tonnes (erga omnes) for chocolate with an in-quota rate of 
38% (tariff items numbers 1806 20, 1806 31, 1806 32 and 1806 90). 

Create a tariff rate quota of 2 289 tonnes (erga omnes) for confectionary with an in-quota rate 
of 35% (tariff item number 1704). 

Create a tariff rate quota of 409 tonnes (erga omnes) for biscuits with an in-quota rate of 40% 
(tariff item number 1905 90). 

2. 
People's Republic of China 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.  

The European Union and the People's Republic of China 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 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  the  People's  Republic  of 
China." 

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

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On behalf of the People's Republic of China 

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