CELEX: 51998PC0378
Language: en
Date: 1998-06-11
Title: Proposal for a Council Decision concerning the approval of a Memorandum of Understanding between the European Community and the Dominican Republic on import protection for milk powder in the Dominican Republic

COMMISSION OF THE EUROPEAN COMMUNITIES
                                          Brussels, 11.06.1998
                                          COM(1998) 378 final
                                          98/0211 (ACC)
                           Proposal for a
                      COUNCIL DECISION
 concerning the approval of a Memorandum of Understanding
between the European Community and the Dominican Republic
on import protection for milk powder in the Dominican Republic
                  (presented by the Commission)
 ---pagebreak---  ---pagebreak---                           EXPLANATORY MEMORANDUM
  1.      At the end of 1994 the Dominican Republic (DR) submitted a request for
 rectification of its Marrakech list for 8 tariff concessions, of which only one (milk
 powder) was of an economic interest to the Community. The DR, as a developing
 country, has claimed that it had not understood the "tariffication process" used during
 the Uruguay Round negotiations for converting non-tariff barriers into ordinary
 customs duties.
 The Community has been the first supplier of milk powder to the DR for the last many
 years.
 2.       In the Marrakech list the DR had bound all agricultural products at a ceiling of
 40%. The proposal for rectification included creation of a tariff rate quota with an in-
 quota-rate of 20% as "compensation" for the introduction of a proposed duty rate of
 102%.
 3.       Over the last three years several meetings have taken place between the
 Commission services and the DR, which is a Member of the Lomé Convention, with a
 view to arriving at a mutually satisfactory solution on this issue.
 4.      The result of the discussions between the Commission and the DR is that the
 DR has offered a tariff quota of 32.000 tonnes of which 70% would be reserved for
the Community. The Community will manage its share of the tariff quota according
to a mechanism of export licences as established by Community regulations. The in-
quota-duty-rate is 20%, whereas the out-of-quota-duty-rate in the first year will be
84%, which will be reduced to 56% over 7 years.
5.       It is the Commission's general view that an agreement on the lines indicated
above is preferable to leaving the DR with the alternative of opening GATT Article
XXVIII negotiations, from which the Community has little to gain.
6.       The purpose of this proposal is to ask the Council to approve the result as laid
down in the Memorandum of Understanding attached to the proposed Decision
(annex A).
                                               z.
 ---pagebreak---                                               Proposal-for a
                                      COUNCIL DECISION
                                                   of..
                     concerning the approval of a Memorandum of Understanding
                    between the European Community and the Dominican Republic
                   on import protection for Milk powder in the Dominican Repub'k
                           THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Article 113 in
conjunction with Article 228 (2) first sentence thereof,
Having regard to the proposal from the Commission,
Whereas the Dominican Republic have requested a rectification of its Marrakech list for 8 tariff
concessions, of which only one (milk powder) is of an economic interest to the Community,
Whereas the Dominican Republic have offered a tariff quota of 32.000 tonnes of which 70% would be
reserved for the Community,
Whereas the Community will manage its share of the tariff quota according to a mechanism of export
licenses as established by Community regulations
                                  HAS ADOPTED THIS DECISION
                                                 Article I
The Memorandum of Understanding between the European Community and the Dominican Republic
on import protection for milk powder in the Dominican Republic is hereby approved on behalf of ihe
Community.
The text of the Memorandum of Understanding is attached to this Decision
                                                 Article 2
The President of the Council is hereby authorised to designate the person empowered to sign the
Memorandum of Understanding in order to bind the Community.
                                         S
 ---pagebreak---                                                        Article 3
The Commission shall, in accordance with the procedure laid down in Article 30 of Council Regulation
(EEC) No. 804/68 of 27 June 1968 on the common organisation of the market in milk and milk
products1, adopt detailed rules for the implementation of paragraph 3 of the Memorandum of
Understanding as referred to in Article 1.
                                                       Article 4
This decision shall be published in the Official Journal of the European Communities.
Done at Brussels,
                                                                           For the Council
      OJ N° L 148, 28.6.1968, p. 13. Regulation as last amended by Regulation (EC) N° 1587/96
      (OJ No L 206, 16.8.1996, p. 21 )
                                                     V
 ---pagebreak--- ANNEXA
  X
 ---pagebreak---                       MEMORANDUM OF UNDERSTANDING
                                      Schedule XXIII
                      Part I - Tariff for the Most Favoured Nation
                                Section 1-B: Tariff Quota
 1.  The Government of the Dominican Republic will rectify following this
     Memorandum of Understanding its Agricultural Schedule (Schedule XXIII annex to
     the Protocol of Marrakech) in order to include the following Tariff Quota:
     Description of Product:                  Powder mill
     Tariff heading (HS) Number:              0402.10
                                              0402.21
                                              0402.29
    Applicable tariff:                        20%
    Base rate:                                84%
    Bound rate:                               56%
    Size of Tariff Quota:                     32,000 M/T
    Period of Application:                    1998-2004
2.  The Tariff Quota established by this Agreement will be distributed among suppliers
    according to Article XIII of the General Agreement on Tariffs and Trade (GATT 94)
    in the following way:
    European Community                22,400 M.T.            70%
    New Zealand                        4,800 M.T.             15%
    Other suppliers                    4,800 M.T.             15%
               TOTAL                  32,000 M.T.            100%
3.  The European Community will manage its share of the Tariff Quota according to a
    mechanism of export licenses as established by the European Community
    regulations.
4.  Any WTO Member can participate in the Tariff Quota as "other supplier".
5.  The European Commission will inform the Dominican Republic of any existing or
    foreseen difficulty in supplying the European Community's share of the tariff quota,
    ïf the European Community cannot supply its share of the tariff quota allocated
    through this agreement, the Dominican Republic will have the rieht, after
                                           €
 ---pagebreak---    notification two months in advance to the European Community, to reallocate the
   unused quantity of the tariff quota among other suppliers if the supply problem is
   not resolved in that period. It is understood that this provision will not be used in
   order to impair the European Community's possibilities of continuing to supply the
   products it was supplying during the years prior to this agreement.
6. The Dominican Republic does not intend that the introduction of this Agreement
   should have the effect of artificially constraining supply and therefore increasing
   prices on its domestic market. It will, therefore, keep its market situation under
   review and will, as appropriate, make increases in the tariff quota consistent with
   this objective.
7. As well, through this Agreement it is established that the Rectification of the
   Schedule XXIII, as previously described in the first paragraph of this Memorandum,
   is valid from year 1998 (the fourth year) of the commitments established by the
   Uruguay Round.
8. The Dominican Republic will implement its Agricultural Schedule (Schedule XXIII
   annex to the Protocol of Marrakech) including the rectification as per this
   Memorandum. The tariff quota will operate on a 1 July-30 June basis. Transitional
   arrangements will apply in respect of 1998/99 if the new arrangement enters into
   force after 1 st July.
   For the Dominican Republic                      For the European Community
 ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                            COM(98) 378 final
                                              DOCUMENTS
EN                                                             03 11 10 02
                                    Catalogue number : CB-C0-98-388-EN-C
                                                             ISBN 92-78-37204-8
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