CELEX: 51976PC0115
Language: en
Date: 1976-03-31 00:00:00
Title: Recommendation for a COUNCIL DECISION on the notification of provisional application by the European Economic Community of the International Cocoa Agreement, 1975 (submitted to the Council by the Commission)

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DE LA COMMISSION
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DOCUMENTS "COM"
COM (76) 115
Vol. 1976/0038
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIE
                                        COM ( 76 ) 115 final "
                                        Brussels . 31 March 1976
                     Recommendation for a
                       COUNCIL "DECISION
         on the notification of provisional application
         by the European Economic Community of the
         International Cocoa Agreement , 1975
         ( submitted to the Council by the Commission.)
                         V
C0M(76 ) 115 final
 ---pagebreak---       Commission Communication to the Council
relating to the International Cocoa Agreement ,
                    1975
 ---pagebreak---                                   - 1 -
  I . The United Wat ions Cocoa Conference , 1975
            The International Cocoa Agreement , 1972 , which expires on 30
  September 1976 , was the subject of fresh negotiations which led to the
  conclusion of the International Cocoa Agreement , 1975 ( Geneva, 22
 September - 20 October 1975 ) •
            The new Agreement -like its 1972 predecessor - is based on a dual
 intervention mechanism within a fixed range of prices : that is , export
 quotas and operations by a buffer stock of 250 000 tons of cocoa beans .
 The charging of a contribution on trade in the product in order to
 finance the buffer stock is maintained , as are the controls on the member
 countries' exports and imports which this entails .        The regulation of
 imports from non-member countries and the possibility of suspending
export quotas in the light of price levels are also retained in the new
Agreement .
           Many amendments have been made to these provisions , namely the
substantial raising of the price range\ new conditions for the review
and revision of the prices , steps to simplify and render more flexible
the quota machinery ( which is adapted to market characteristics ), the
increased role of buffer stock operations particularly in the event of
a fall in prices , and improved conditions of supply for consumer countries
that are members of the Agreement .       Moreover , the ne w three-year Agree­
ment may be extended for two years without fresh negotiations .         It is
scheduled to enter into force on 1 October 1976 •
           It may be hoped that the economic provisions of the new Agreement
will be more effective than those of the first Agreement .         Because of
the world market situation and the high prices of the product since
1973 the provisions relating to stabilization of the market have not yet
                                                                         •/.
   The minimum price , 23 US cents per pound under the 1972 Agreement
    ( raised to 29.5 i*1 1974 ) > has been fixed at 39 cents and the
    former maximum price of 32 cents ( raised to 38.5 i*1 1974 ) has
   been fixed at 55 cents , which means that the range has been
    widened from 9 to 16 cents .
 ---pagebreak---                                     - 2 -
  been able to function , but the system of financing the buffer stock
  means that .large sums can be mobilized for purchases of cocoa by
  the stock .      The funds which will be available when the first Agree­
  ment comes to the end of its three-year period on 30 September 1976
  are estimated at $ 85 million .
  II . The role of the Community and the Member States in the negotiations
              Since this is the only international agreement currently in
  force which embodies measures to control exports and imports , its
  application would have been impossible - from the standpoint of the
  common commercial policy - without the Community participating
  ( which it did from the time the 1972 Agreement entered into force ) as
 well as all the Member States .
             Moreover , the Agreement being of a " mixed " nature , with the
 Community having jurisdiction in some matters and the Member States in
 others , the Council adopted on a proposal from the Commission in
 September 1975 provisions for the negotiation of the second Agreement ,
 and these were successfully implemented in the course of the work :
      ( i ) the Community was alio . zed to participate automatically in the
            Conference ( instead of in an observer capacity) ;
    ( ii ) the Community and the Member States were represented by ten
            delegations ;
 ( iii ) the Commission representative was normally the spokesman on matters
            covered by the common commercial policy under Article 113 and on
            matters which were the subject of common action under Article 116 ;
   ( iv ) the negotiating directives , which were annexed to the Council
            Decision authorizing the Commission to negotiate on behalf of the
            Community in matters within the Community competence , were
            adhered to a
             The Community was therefore able to play a major part in this
Conference since , for the first time in the case of a. mixed agreement ,
the ./hole of the negotiations were conducted at Community level , even
 ---pagebreak---                                - 3 -
 on the most difficult questions such as those concerning prices ana
 the mechanisms for intervention by reference to price levels .
         This result was made possible  only by the spirit of cooperation
 and the ./ill to succeed displayed by the ten delegations throughout
 the Conference .   In this connection it will be recalled that the
Community accounts for 40$ of world imports ( 1972-74 average ), folio . ed
by the United States with 23$ and the USSR with 9$ *
         The United States , which is not a member of the 1972 Agreement ,
participated in the preparatory work and in the 1975 Conference , at
 .vhich it belatedly put forward proposals for a simplified agreement
based mainly on a buffer stock .    Since the second Agreement ./as not
concluded on this new basis , the United States regards it as unacceptable .
         On the producer countries' side , one of the biggest producers
 ( ivory Coast ) was unable to support the final compromise on price levels
and the market intervention mechanisms ; this is the first time an
international product agreement has been concluded with one of the
principal producer countries standing aside from the other developing
countries .   The fact is all the more remarkable in view of the existance
of a Cocoa Producers' Alliance , comprising Brazil and the five main
African producer countries ( Ghana , Nigeria, Ivory Coast , Cameroon,
Togo ) .
Ill . The entry into force of the Agreement : proposals by the Commission
         The 1975 Agreement is open for signature until 31 August 1976
inclusive and is scheduled to enter into force provisionally or
definitively on 1 October 1976 , subject to the following conditions :
five exporting countries accounting for at least 80fa of the basic
quotas and importing countries accounting for at least TOfo of world
imports must have deposited their instrument of ratification or have
given notification by not later than 30 September 1976 that they will
apply the Agreement provisionally .
 ---pagebreak---                                - 4 -
           On the exporting countries' side , if Ivory Coast - ere to stand
 by its intention not to sign or accept the neti Agreement , the chances
 of the Agreement entering into force on 1 October 1976 .vould be
 seriously jeopardized in view of the conditions stated above , since
 Ivory Coast is the world 's third largest producer ( l5«5 of the basic
 quotas ) .
           As regards the importing countries , the situation is comparable
 to that under the 1972 Agreement ; that is , if the United States does
 not participate , the entry into force of the Agreement would pre­
 suppose the participation of all the other principal importing countries ,
 .-.'hose delegates to the Conference adopted the new Agreement provided
 it .-/as accepted by all the principal exporting countries .    For this
 reason , while acknowledging the uncertainties surrounding the new
Agreement arising from Ivory Coast 's position and pending the results
 of the discussions among the principal exporting countries , the Commission
 considers that it would be appropriate - particularly as 1976 will be
marked by the fourth session of UNCTAD and the work of the Conference
on International Economic Cooperation - that the Community and the
Member States should not jeopardise the possible entry into force of the
new Agreement and should make the necessary preparations to be able to
complete the procedures within the period specified .
           The Commission therefore recommends that the Council :
decide that the 1975 International Cocoa Agreement will be signed as soon
as possible before 31 August 1976 on behalf of the European Economic
Community, subject to conclusion of the Agreement ;
adopt , in accordance with the text annexed hereto , a decision to the
effect that the Community will notify the Secretary-General of the
United Nations before 30 September 1976 that it will apply the agree­
ment provisionally, as an importing member , when the Agreement enters
into force in accordance with Article 69 .      The text of the Agreement
will be annexed to the decision , which will be published in the Official
Journal of the European Communities .     This reference to Article 69
implies the participation of all the principal exporting countries and
all the principal importing countries , except the United States .
 ---pagebreak---                              - 5 -
        Even if one or more Member States were unable to complete
 these formalities within the period specified , it should still be
 possible for the Community to do so in order to avoid any break in
 continuity in the application of the rules of the Agreement covered by
 the common commercial policy in the event of the new Agreement entering
 into force on 1 October 1976"'". In this connection the Commission
 would point out that when the Council adopted the Decision on partici­
 pation by the Community in the negotiation of the second Agreement , the
Council drew attention to the special difficulties of one of the
Member States and expressed the view that a solution should be worked
out at Community level so that the new Agreement could be applied by
all the Member States and the Community .
        Lastly, in anticipation of the forthcoming meetings of the
Executive Committee and the sessions of the International Cocoa Council
to be held in March and July 1976 , the Commission proposes that the
Community and the Member States adopt sn open and constructive attitude
in case it should prove necessary , before 1 October 1976 , to consider
an alternative solution to the entry into force of the 1975 Agreement
on that date ; possible solutions could be the extension of the 1972
Agreement pursuant to Article 74(4 ) of that Agreement or a protocol
maintaining the Agreement in force for a specified period .
  See Council Regulation (EEC ) Ho 3135/ 73 of 9 November 1973 on the
  implementation of the economic and control rules of the International
  Cocoa Agreement , 1972 in OJ No L 324 of 24 November 1973 , p. 20 .
 ---pagebreak---                  GMR    ATIOT : FOIÏ A COUÎÎCIL DÉCISION
on tho notification of provisional application by the
European Econon-.ic Comas Tity of the International Cocoa
                      A r; r e c mont , i >' 75
TUE CCUNCT ,; C7 THE suacrs/.N COI ;. UNTTIE3 ,
Ir.vinr rogor-' tn the Tre&ty establishing the European Ucononic
Co rc unity and in particular Article 113 thereof ,
Having repai d to 'he recorrmondation from the Commission ,
 ---pagebreak--- Whereas the Cor,;:.iuni Ly is participating in i-he Interna lxcnn.1 Cocoa
Agreement , 1972 ;
Whereas the Council har. 'J cidcd to cijjn before 31 August l??b the
International Cocoa A^rccnvrit , 1975 on behalf of the Community ,
subject to conclusion of the Agreement ;
Whereas the Community should give         notice      that it will apply
the Agreement provisionally pending completion of the internal
procedures necessary for its conclusion ,
H AS APCPTED T' IS DECISION :
                            Sole Article
1.      In accordance with Article Co of the International Cococ..
Agreement . 1975 » the European Economic Community vill notify the
                                                                          9
Secretary-General of the United Nations before 30 September 1976
that it will r:pply the Agreement provisionally , as an importing
member , when the Agreement enters into force in accordance .-. ith
Article 69 O
The te::t of the Agreement is annexed to this Decision .
2.      The President of the Council is hereby authorized to designate
                                                    1
the person empowered to give this notification .
   The date from which the Agreement will be applied provisionally
   will be published in the Cficial Journal of the European
   Communities .
 ---pagebreak---         Notif?,.rat i.on of provisional application
In accordance with Article 68 of the Interna Lionel Cocoa
Agreement , l'?75j the European Economic Community hr-rchy
 •■ ives notification of provisional application . In . jiving
this notification the Community will consider itself
provisionally an imp or tine member of the above A--rec.vent
with     11 the rights and obligations arisinc therefrom v:hcn
the Agreement enters into force in accordance with Article
69 and until the date on which the t'ecision concluding
the A ; reer.ient is deposited by the Council of the European
C orrrnmi ties .