CELEX: 51976DC0263
Language: en
Date: 1976-06-09
Title: Draft Commission Communication to the Council relating to the International Coffee Agreement, 1976#Recommendation for Council decisions concerning the signing of the Agreement on behalf of the Community and the notification of provisional application of the Agreement

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (76) 263
Vol. 1976/0083
 ---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
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
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,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
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,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIE
                                       «
                                            COM(76)263 final.
                                             Brussels . 9     1976 .
 Draft Commission Communication to the Council relating to the
             International Coffee Agreement , 1976
 Recommendation for Council decisions concerning the signing
 of the Agreement on "behalf of the Community and the notificat­
      ion of provisional application of the Agreement
                                             \
               /
    COK176) '263 final
 ---pagebreak--- I. ' Activities of the International Coffee Council in lQf ?
     relating to the negotiation of a new international arreement
            The International Coffee Agreement , I968 , extended in 1973 without its
     economic provisions , expires on 30 September 1976 . It was the subject of
     fresh negotiations within the International Coffee Organization , which led
     to the conclusion of the International Coff4ee Agreement , 1976 ,      "the 28th
     session of the International Coffee Council ( London , 3 November – 3 December 1975)«
            The new Agreement , which is open for signature from 31 January to
     31 July 1976 , should enter into force on 1 October 1976 for a period of six
     years , that is to say until 30 September I982. During the third year of its
     life ( i.e. before 30 September 1979 )> "^he Contracting Parties must notify
     the United Nations of their intention to continue participating in the
     Agreement during the following three years .
            Like its antecedents ( I962 ancl I968 ), the new Agreement is based on
     export quotas calculated by reference to certain price levels , but major
     adjustments have been made which should establish a better balance between
     the interests of the producer and consumer countries .
            It is hoped that the economic provisions of the new Agreement will prove
     more flexible than those of the earlier Agreements , for while pursuing the
     objective of reducing fluctuations in coffee prices , they should also be able
     to adapt to the fundamental trends of the world market .
     T-foin features of the new International Coffee Agreements 1
  J
         - Export prices and quotas
            The International Coffee Council continues to play n vital role in this
     area ; at the beginning of each coffee year it fixes the price bracket(s )
     determining the level at which export quotas are introduced , suspended or
     restored. In the absence of a Council decision on prices , however , the
     mechanism can function by refereiioe to the average of the prices of ' robustas 1
    and 'other mild arabicas' during 1975 ( 63.23 US cents/lb ), which in fact
     constitutes the floor price under the Agreement . Prom the second coffee year
                                                                 t
     (l October I977)i if there is still no Council decision on prices , the ouota
                                                 %
 ---pagebreak---  machinery can operate by reference to "the avorage of the prices in tho
 preceding year if the market prices depart from that average by 15^ or
 more either way within a price bracket ranging from 63.23 to 77.46 cents/lb^
 it being understood that the latter price is a ceiling beyond which quotas
 may not be introduced unless the Council decides otherwise". It should be .
 noted that these prices may be revised twice during the life of the Agreement ,
 although this in no way implies indexation .
     - Market cup-olios
       The world market is divided between the market of the member countries
 subject to quota arrangements and the market of non-member countries not
                                      r-
 subject to quotas . The consumer countries that are members of the Agreement ,
among which the EEC accoxxnts for nearly 40/f> of world imports , should be
assured , in the event of quotas being introduced , that they will obtain
more regular coffee supplies than under the system set up by the earlier
agreements , for basic quotas fixed in advance for each country are no longer
laid down in the Agreement .    The method of calculating annual export quotas ,
which the Council will fix each year , is based on the proportion of 70$f> on
average exports effected in the past and on the proportion of 30$ on tho
 exporting member countries' ascertained stocks , which should eliminate the
danger of certain exporting countries being allocated annual export quotas
which do not correspond to their real export capacity during the reference
year , as happened in the past , particularly in the case of the main exporting
 country. Moreover , the provisions on the redistribution of any production or
 export shorfallo are aimed at discouraging producers from adopting a unilateral
policy of deliberately holding back stocks . Special measures are envisaged
to take account of the interests of small producer countries exporting ler.s
than 400,000 60-kilogramme bags of coffee per year.
       In the event of quotas being established , importing members
limit thoir imports from non-members            t to an annual volume which
reflects their traditional trade with those              . calculated on the
bapis of the average for 1971 to 1974 or that for 197? to 1974 , whichever
is preferred.
( l ) 77.46 cents « 63.23 cents ( Average of prices of robustas and other
      mild arabicas in 1975 ) + 22.55».
 ---pagebreak---                                      -3-
          – Promoting conr.utTmtion
            A promotion fund, with resources which may reach ^ 25 million in two
     years thanks to a compulsory levy on the coffee exports of the exporting
     members , will contribute 50% of the cost of financing multiannual promotion
     campaigns to stimulate consumption in the importing countries , with the
     remainder being provided by interested bodies in those countries .
          – Production and stocks nolicy
            With a view to facilitating the coordination of production policies ,
     which may require studies ox^hven technical assistance , the Council may
     fix a financial contribution to be paid by the exporting countries to offset
     any expenditure thereon. The Council will take measures to ascertain the
     stocks in the exporting countries and will study on arrangement for an
     international stock.
II . The r8le of the Community and the Member States in the negotiations
            Although the Community is not a member of the Agreement which was
     extended in 1973 without its economio provisions , one Member State not having
     signed , it participated in the negotiations as an observer , as did that
     Member State . Despite this unsatisfactory legal - situation
                                           the Commission delegation , pursuant to the
     Council Decision of 18 August 1972 which was valid for the 1975 negotiations^^
     made proposals at the preparatory stage concerning the areas coming within
     Community jurisdiction (Article 113 ) and these were accepted by all the
     Member States and implemented during the negotiations . . The provisions enabling •
     the Community to participate in the Agreement were oonfirmed and arrangements
     were made to enable the Community to sign it on the same basis as governments .
     ( l ) See document 247/75 ( COMER 33 ) of 17 February 1975 *
 ---pagebreak---                                           -4-
              Thanks to "the spirit of cooperation and the will to succeed displayed
       "by the delegations , it was possible to harmonizo the Member States 1 positions
     ' on tho other matters with a view to common action# A satisfactory solution
       wan thus found to the most difficult questions , such as those concerning
       prices and <ruo!,;».n . In view of their important place in the negotiations , tho
        spirit of compromise displayed by the delegations of the two main members of
       the International Coffee Organization , the United States and Brazil , should
       also be emphasized, .
              On tho producor countries' side , tho African countries , including many
       AGP States , and the Central American countries obtained satisfaction as
       regards distribution of the market ; they should now obtain export quotas more
       in line with their real production capacity since Brazil ,xvhose production
       potential has been cut for some time by one of the worst frosts in its history ,
      has made concessions on this vital issue .
Ill# The entry into force of the Agreement ; Comnusftion proposal
             The 1976 Agreement is open for signature until 31 July 1976 inclusive
      by the Contracting Parties to the extended I968 Agreement and by the
       Governments^ ^invited to the negotiating session* It is scheduled to enter
       into force provisionally or definitely on 1 October 1976 , subject to the
      following conditions : not less than twenty exporting countries accounting
      for at least 80$ of the votes and not less than ton importing countries
      accounting for at least 80$ of the votes , broken down as shown in Annex II to
      the Agreement , must have deposited their instrument of ratification or have
      ( l ) Pursuant to Artiole 4(3 ) of tho Agreement , the term • Government 1 is
            deemed to apply to the European Economio Community# .
 ---pagebreak---                                  -5-
given notification "by not later than 30 September 1976 that they will apply
the Agreement provisionally.
      In view of the general satisfaction at the outcome of the negotiations
on thin Agroomont , which restores international cooperation in renp^r.t of
the developing countries' most important agricultural export following an
interruption of three years , the Commission considers it most derirable –
particularly as 1976    is    marked by the fourth session of UNCTAD and
the Conference on International Economic Cooperation - that the Community and
the Member States should Templets the necessary procedures by the date set so
as to enable the new ^Agreement to enter into force . As regards the provision
coverod by the common commercial policy , in order to be able to apply the
Agreement the Community will have to adopt before 30 September 1976 the necessary
rules for the import control system and for possible restrictions on imports
from countries which are not members of the Agreement , taking account of the
free movement of floods within the common customs territory and the common
measures for liberalizing trade with third countries .
      The Commission therefore recommends that the Council :
- decidos that the 1976 International Coffee Agreement will be signed ao soon
  as possible before 31 July 1976 on behalf of the European Economic Community
   subject to conclusion of the Agreement ;
- adopts, 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 197 6 that it will apply the Agreement
  provisionally , as an importing member , when the Agreement enters into
  force in accordance with Article 61 . The text of the Agreement will be
  annexed to the decision , which will be published in the Official Journal
  of the European Communities .
      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 ensure that throughout the customs territory of the Community
the rules of the Agreement covered by the common commercial policy are applied
as from the entry into force of the new Agreement on 1 October 1976.
                                                ./•
 ---pagebreak---                                    - 6 -
      For constitutional reasons one Member State gave an account during the
 preparatory stage of the negotiations of the logal difficulties it faced
 as regards the provisional application of the Agreement , that such an
undertaking entailed the obligation to make a finanoial contribution towards
 the oost of administering the Agreement for a period preceding the com­
pletion of the ratification procedures .
                                 4
      Here the Gommissioi^would point out that in a similar case when the
Council adopted the Decision on participation by the Community in the
negotiation of the second International Cocoa Agreement , the Council drew
attention to the special difficulties of that Member State 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 .  The Commission oonsiders that the same procedure should be
followed for the International Coffee Agreement .
 ---pagebreak---               COMMISSION
OF THE EUROPEAN COMMUNITIES                                              Brussels ,
 Dirvctoratf-Ginvml for Ow«'opir>«nt
                                  DRAFT RECOMMENDATION FOR A. COUNCIL DECISION
                         on the notification of -the provisional application by the
                         European Economic Community of the International Coffee
 i.                                                       Agreement , 1976
 f                                                          :            –                  :    .
                         THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
                         Having regard to the Treaty establishing the European Eoonomio
                         Community , and in partioular Article 113 thereof ,
                         Having regard to the recommendation from the Commission ,
  'rovisional       Au« de la Lo ! 200. 8 - 1040 Brunel» - T«l«phone 735 00 40 / 73880 40 -   COMEUn BruiMIl" –
                                                       T«l«i " 2J877COMEU 8 "
 ---pagebreak--- Whereao the Council has decided to sign before 31 July 1976 the
International Coffee Agreement , 1976 , on "behalf of the Community ,
subjeot to oonolusion of the Agreement ;
Whereas the Community should give notification     that it will apply
the Agreement provisionally pending completion of the internal
procedures necessary for its oonolusion ,
HAS ADOPTED THIS DECISION :
                              Sole Article
1.      In accordance with Article 61 of the International Coffee
    Agreement , 1976 , the European Economio Community will notify the
    Secretary-General of the United Nations before 30 September 1976
    that it will apply the Agreement provisionally , as an importing
    member , when the Agreement enters into force in acoordanoe with
    tho eaxd Article .
                 ï
    The text of the Agreement is annexed to this Decision .
                                                     *
2.      The President of the Counoil is hereby authorized to designate
    the person empowered to give this notification^*.
   The date from whioh the Agreement will be applied provisionally
   will be published in the Offioial Journal of the European
   Communities .
 ---pagebreak---               Notification of proviaional application
       In accordance with Artiole 61 of the International Coffee
Agreement , 1976 , the European Economic Community hereby gives
notification of its provisional application. In giving this notifi­
cation the Community will oonsider itsolf provisionally an
importing member of the above Agreement , with all the rights
and obligations arising therefrom , when the Agreement enters into
foroe in accordance with the said Artiole and until the date on
which the deoision ooncluding the Agreement is deposited by the
Counoil of the European Communities .
               !
               i