CELEX: 51979PC0546
Language: en
Date: 1979-10-19 00:00:00
Title: RECOMMENDATION FOR A COUNCIL DECISION AUTHORIZING THE COMMISSION TO OPEN NEGOTIATIONS WITH INDIA WITH A VIEW TO THE CONCLUSION OF AN AGREEMENT ON TRADE IN COIR PRODUCTS (presented by the Commission to the Council)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (79) 546
Vol. 1979/0188
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
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file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                               COM(79)546 final
                                               Brussels . 19th October 1979
                        RECOMMENDATION FOR A COUNCIL DECISION
                 AUTHORIZING THE COMMISSION TO OPEN NEGOTIATIONS
                     WITH INDIA WITH A VIEW TO THE CONCLUSION OF
                       AN AGREEMENT ON TRADE IN COIR PRODUCTS
                       (presented by the Commission to the Council )
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 ---pagebreak---                                   EXPLANATORY MEMORANDUM                                v
1.    The Agreement in force between the Community and India on trade in coir
products expires on 31 December 1979 . This Agreement constitutes for India -
the Community 's main supplier - the " special arrangements" which wereprovided
for under the Community 's offer on generalised tariff preferences in order to
enable the developing countries concerned to take advantage 'of the preferences
                                1
for the products in question .
                                                       '       "         *
      The main features of the Agreement are as follows :
       the unilateral granting by the Community in the context of the GSP of
       suspension of tariff duties , which have been zero-rated since 1 January 1978 ;
       confirmation of the continuation of the arrangements ensuring almost total
       freedom from controls on imports into the Community ( an import quota remains
         in one Member State in respect of coir mats and mattings ;  CCT heading .
       No . ex 58.02 ) ;
       assurances from India as regards the supply under non-discriminatory conditions
       of the raw materials necessary for . the Community coir products industry ;
       the setting up of a Joint Cooperation Committee with the task , inter alia ,
       of investigating opportunities and making suggestions with a view to cooperation
       in the fields of research and development as regards the production and uses
       of coir products .
                                                                < *
  Sn Lanka also receives preferences for coir products but , in view of the low
 level of exports from this country, the special arrangements took the form of a
single exchange of letters in which Sri Lanka undertook to enter into negotiations
with the Community if necessary .
2
  It should be pointed out that the Community agreed that its MTN offer should
include–the conversion of this quota into a voluntary restraint measure , the im­
 plementation of the offer being left for discussion in detail in the negotiations
 ( see point III ( b ) below ).                                                        *
 ---pagebreak---                                                       -   2  -
                                                                                                         i
       II .     As the Agreement expires on 31 December 1979 / the Import arrangements to
>_• apply to these products from 1 January 1980 should be established. The Commission                    j,
       considers that it would be appropriate to try to conclude a new agreement of six                  \
       years' duration with its Indian partner , whereby :
       - a quantitative import protection measure would be maintained for. a specified period
        (A.year^ in the region of the Community ( France) which retains a quota , in order to
           afford its industry the time needed to adjust to the liberalization of imports .
          This should be. achieved , with India 's agreement , by instituting, for * y*ars , a system of
           voluntary restraint of exports under which reasonably limited increases would be            ' ;
                                                                                                           !
          allowed in the exports concerned , and , in the last two years of- the Agreement , res-          ;
          trictions on coir products would be totally suspended .                                          ,
          This conversion of the quota into a voluntary restraint arrangement would
           constitute the implementation of the MTN offer .
  . - the suspension of duties which as been in force in the Community in the context
          of the GSP since 1 January 1978 would be maintained ;
       - formal assurances would be obtained from India on the supply of coir yarn to the
     -    Community industry under normal price conditions .                                                 j
       III .     There are a number of grounds for this policy :                                             '
      a)      the Community offer on generalised tariff preferences stipulated in respect of
              coir products that the elimination of customs duties would also be included where
        \     special arrangements had been made with the exporting developing countries .
              As this elimination has been put into effect , it should be maintained .                       i
       b)     In the context of the multilateral trade negotiations , the Community made an
              offer to India on quantitative restrictions on coir products to the effect that
              the import quota applying in France for coir mats and matting should be converted j
                                                       -•                                                     !
              into an arrangement for voluntary restraint of exports and that the ceiling should
              be administered by India . When the multi lateral trade negotiations ended                      j
              and no communication was received from India , the Community sent that country               ]
              a letter stating :
                                                    •                                                  .      i.
                            i) that the Community offer still stood , and                                     ;
                         ii )  that the details and implementation of this offer would be      .
                               discussed again on a bilateral basis in the forthcoming negotiations .
       c)     The production and export of coir manufacture is of prime importance to the
              economy of the State of Kerala in southern iidia , where approximately 1 million
              people cfepend on this trade for their livelihood .  On several occasions at
              meetings of the Joint Committees set up under the Cooperation Agreement between        ■
              India and the Community, the Indian authorities have requested that the import
   t .      ; quotas sti 11 in force in France be abolished.
 ---pagebreak---                                             -    3
      India repeated this request in the multilateral trade negotiations .       In
      view of the statements made in the MTN in favour of the developing countries , -
      the Community would appear to have little choice but to move towards meeting
      India 's requests , especially since coir products are unquestionably developing
      country products .                               „
      However , account should also be taken of the need for the French coir products
       industry , which at present receives protection , to adjust gradually to a system
      of liberalization of imports .    This industry , which provides work for about
      250 people in France, is gradually turning towards the manufacture of more
       sophisticated articles ( rubber-backed carpets arid doormats ) than those produced
      by Indian industry . It still needs time to enable it to complete this process
      of specialization .
         /                            -  •     '           »                   ^          \ • '
  cj)The assurances to be obtained from India on the supply of coir yarn to Community
      industry are warranted by the fact that India is the only country - in the world
      at the moment which is able to supply the Community 's industries with these
    . products .   The European industry - notably its French component - is the leading -
      world user of Indian coir yarn .     For a number of years the relevant Indian
      authorities have applied a policy which would 'appear to have the effect of increasing
      the price and the scarcity of exported coir yarn ;     the introduction of the husk
      control regulation , which gives the corporate sector a monopoly of the retting of
1     husks , led .to the doubling of retted husk prices between 1974 and 1976 and to a
      50% prise in the price of exported yarn , according to the European firms affected .
      At the beginning of this year , the Indian Coir Board decided to increase the     ■
      price of coir yarn by 50-60% . . The European industry has complained several times
      about this policy, which clearly is, making difficult the attempts of cooperation
      between the Community and Indian industries being made in the Joint Committee
      or under the present Agreement in force . Apart from the above mentioned price
      problem , the European industry has on many occasions expressed its serious
      fears concerning the prospect of a steady supply of yarn and other coir products
      originating in India , and it would be opportune to take this concern into .
      consideration during the negotiations .
                                                                         0/• ■
 ---pagebreak---                                        -  4
IV .   Given the - Community 's need to continue, to regulate trade in coir products
for a while and the advisability of doing this / as in the past , by means of
measures negotiated with its partner , taking into account the need for the'
Community to ensure that progress, is made towards meeting India 's requests in
part at Least - thus creating the conditions for negotiations to be undertaken
with some chance of producing an agreement - and bearing in mind also the need
to allow the Community industry in the Member State retaining an 'import quota
for coir mats and matting some time to adjust to the liberalization of imports ,
it would seem advisable that the two following points should constitute the basis
of the Community 's approach to the negotiations
                          \ ,
     -   establishment of a system of voluntary restraint of exports in
         respect of the region of the Community which at present operates an
         import quota for this product ( coir mats and matting );
     -   an undertaking to suspend completely all quantitative restrictions
         on exports for the last two - years of the - Agreement .
     Accordingly , the Commission recommends that the Council adopt the attached
draft Decision .                                                                  -
 ---pagebreak---                RECOMMENDATION FOR A COUNCIL DECISION
           authorizing the Commission to open negotiations                 ^ -
           with India with a view to the conclusion of an
               agreement on trade in coir products
                                                        \                                .
THE COUNCIL OF THE EUROPEAN COMMUNITIES­
                                           •                  9                        '
Having regard to the Treaty establishing the European Economic Community ,
and in particular Article 113 thereof ,
Having regard to the Recommendation from the Commission ,
Whereas the Community offer on generalised tariff preferences stipulates that
for coir products the elimination of customs duties will also be included ^
" where special arrangements have been made with the developing exporting
countries";
Whereas these " special arrangements" are constituted by an Agreement on trade ,
in coir products negotiated by the European Economic Community with the Republi
of India ;   whereas this Agreement expires on 31 December 1979 ;
Whereas it is advisable to authorize the opening of negotiations with
India with a view to , determining the arrangements which shall apply after
this date to trade in coir products ,   .
                                                           -, f                . - - ■
HAS DECIDED AS FOLLOWS :
                                  Sole Article
      The Commission is hereby authorized to open negotiations with a view to
the conclusion of an agreement between the European Economic Community and
the Republic of India on trade in coir products .
      The Commission shall conduct these negotiations in consultation with
the Article 113 Committee and in accordance with the Directives annexed to this
Decision .
Done at Brussels ,                                              For the Council
                                                                 The President
 ---pagebreak---                                                            ANNEX
                   NEGOTIATING DIRECTIVES
1. Agreement to be valid for six years , i.e. until 31 December 1985 .
2. Voluntary restraint xby India of its exports to France of coir mats
   and matting ( CCT heading No . ex 58.02 ) until 31 December 1983\
   The volume of the ceiling will be calculated on the basis of the
   national quota currently in force, with an appropriate annual percentage
   increase .
3. Suspension on 1 January 1984 of all quantitative restrictions in force
   in the Community .
                             V
4. Maintenance of the zero duty tariff suspension currently in force
   under the GSP .
5. Specific assurances to be given by India as regards supplies of coir
   yarn to European industry .           .