CELEX: 51975PC0434
Language: en
Date: 1975-07-25 00:00:00
Title: RECOMMENDATION FOR A COUNCIL DECISION authorizing the Commission to open negotiations with India and Bangladesh for the conclusion of agreement on jute products (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (75) 434
Vol. 1975/0167
 ---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 COMMUNITIES
                                                    COM(75) 434 final
                                                    Brussels . 25 July 1975
                RECOMMENDATION FOR A COUNCIL DECISION
     authorizing "the Commission to open negotiations with India
   and Bangladesh for the conclusion of agreement on jute products
             (submitted to the Council by the Commission)
 COM(75) 434 final
 ---pagebreak---                          EXPLANATORY STATEMENT
1.         Two agreements were negotiated in 1973 between the Community
on the one hand , and India and Bangladesh , on the other , on trade in
jute products . These agreements constitute for these two countries ,
which are the main suppliers for the Community , the " special measures"
contained in the Community'.s offer on generalised preferences , and
provide the means by which the developing countries concerned may
benefit from preferences for the products in question, ( l ).
           The main provisions of the present agreements are :
- the autonomous ground by the Community of a progressive suspension
    of tariffs reaching , by the last year of the agreements ( 1975 ) a
   reduction amounting to between 50 and 60 % according to the products ;
- self-restraint at an agreement level by India and Bangladesh on their
   export of broad jute ( categories 4 and 5 ) and yarn ( category 6 ),
    suspension of quantitative restrictions which may be in force for the
   products under restraint as well as a stand-still     fofr the quantitative
   restrictions applied within the Community to products in categories
   1 to 3 ( 2 ).
- the setting up of a joint Commission charged in particular with the
    study of all important economic problems connected with jute .
( 1 ) Thailand also benefits from tariffs preferences for jute products .
      However , taking into account present levels of Thailand exports , the
      Community has felt possible to grant preferences without taking
      measures analogous to those agreed with its principal suppliers .
      It has nevertheless been agreed with Thailand , in an exchange of
      letters , that if neoessary , this country would join negotiations .
      with the Community.
( 2 ) These last mentioned jute products , that is to say bags and narrow
      cloth ( categories 1 to 3 ) remain subject to the import regime in force
      in the Member States s quotas in France , Ireland , United Kingdom
      and Germany (cloth only in this last Member State ) liberalised
      elsewhere *
 ---pagebreak---                                 - 2 -
2.          Since the agreements expire on 31 December 1975 » the import
regime for these products from 1.1.1976 must be laid down. The Commission
feels it appropriate to seek , by the conclusion      of new arrangements
with India and Bangladesh , a regime which will enable the system set up
under the preceding agreements to be continued and , finally the freedom
from duty ( as envisaged in the Community 's offer on GSP ) and the
progressive removal of quantitative import restrictions . The main
reasons for this approach are as follows :
– The Community's offer in tariff preferences provides , for jute
   products , that " freedom from duty is also envisaged within the frame­
   work of special measures to be drawn up with exporting developing
   countries"}
– the Community 's jute industry , for which a restructuring and
   adjustment is in progress , is undergoing a particularly acute crisis
   and the maintenance of self-restraint measures for some time yet should
   allow this process to be achieved in an orderly manner and specially
   the retraining of those employed in the jute industry for other activities
   or for the achievement of certain very sophisticated modes of production
   in the jute sector , already largely under way .
3.         The negotiations should be engaged taking into account
– the situation in the Community market ,
– the experience gained under the agreements in force as well as the
   policy followed by the Community with regard to developing countries
   in general and the third countries in question in particular taking
   account of the importance which jute represents in their economies .
(a) The Community jute industry has experienced since 1972 a fall in produc­
       tion find consumption , and in certain Member States at least ,
       an increase in unemployment and short-time working . Production has in
       fact fallen off in the period of question by 24 $ for yarns and
       25 $ for cloth and bags . For yarns , the fallen production has been
       particularly felt in the United Kingdom and Belgium which are the
       two principal producers amongst the Member States : between
       1973 and 1974 in fact , the drop has been 16$ in<-the United Kingdom
       and 13 $ in Belgium . For the cloth industry there has been a . general
       fall in production , although the United Kingdom and Belgium have
       been especially hard-hit : 21 % inr'the United Kingdom and 17 in
       Belgium *
 ---pagebreak---                   In parallel with this fall in Community production imports from
       third countries of the whole range of jute products have also diminished
       "between 1972 and 1974 ! 41 % for yarns , 4 $ for cloth and "bags . However ,
        as far as cloth and "bags are concerned , since Community production
       has fallen more rapidly than imports the proportion of imports in
        consumption has grown from 39 to 49 %• One could not say , however , that
       the difficult industrial situation can he ascribed to imports since these
        are diminishing. The dropp in Community production is to be explained
       principally by the contraction of the market which becomes more marked
       each year due in part to the general economic situation but more
        specially to the speeding of the process of substitution of jute by^jmthetic
       products .
(b ) On the basis of the imports in 1974 from India and Bangladesh one may
    deduce that despite the lowering of tariff protection (reduced from 1.1.1975
    by 50 $ or 60 $ according to the product , freedom ffrom duty being main­
    tained in the United Kingdom and Denmark ), ceilings provided for broad
    cloth ( categories 4 and 5 ) and yarn ( category 6 ) have not been completely
    used either by India or by Bangladesh with the exception of the quota
    share of the United Kingdom . As regards India, the Community ceiling for
    categories 4 and 5 has been used only to a level of 26 fo» For Bangladesh
    the limit for categories 4 and 5 has only been used to a level of 34 $ and
    no exports of yarn ( category 6 ) have been recorded.
    On several occasions India and Bangladesh have drawn the Commission's
    attention to their disappointment .. regarding the results achieved under
    these agreements . The two countries have particularly indicated that
    the rigid allocation of ceilings between Member States often led to a
    partial freezing of their export possibilities .
    One may admit that one of the essential objectives of these agreements
    for supplying countries , that is to say the growth of their sales in the
    Community market , has not been achieved .
    Doubtless the growth of sales was difficult in a market where demand has
    been falling from year to year as jute products met increasing competition
    from synthetic products ( competition sharpened by relatively stable prices
    for synthetic goods compared with the ria«:in price for jute products .)
 ---pagebreak---                                 - 4 -
Nevertheless it should be said that the situation of India and
Bangladesh on the Community jute market has undeniably deteriorated
during the period of application of the agreements ( for products under
self-restraint exports have diminished between 1973 and 1974 by
75 $ for yarns exported by Bangladesh and by 61 $ for broad, cloth ex­
ported by India)*
These two countries haver furthermore observed on many occasions that the
negotiation and conclusion <of new agreements would be extremely difficult
unless concrete export possibilities which took into account the reality
of the market situation were agreed .
4.          Taking into account the considerations set out above on the
present situation and the long term possibilities of development for the
Community jute industry it seems appropriate that a self-restraint
regime for the products in question should continue to be maintained }
in order to realise this objective within a contractual framework it
seems appropriate that the negotiating guidelines be drawn up in the
following sense :
– the pursuit of the reduction of tariff barriers within the framework
   of GSP ;
– a growth in self-restraint levels with a more flexible allocation
   amongst Member States and more adapted to real trade flows .
            The Commission recommends that the Council adopt the
draft decision annexed hereto *
 ---pagebreak---         RECOMMENDATION         FOR A COUNCIL DECISION
       authorising the Commission to open negotiations with India
       and Bangladesh for the conclusion of agreement on Jute products
THE COUNCIL OP THE EUROPEAN COMMUNITIES
having regard to the Treaty establishing the European Economic Community
and especially its Article 113 »
having regard to the recommendation of the Commission ,
whereas the Community 's offer in generalised tariff preferences
provides that , for jute products , freedom from duty would also he
provided for "within the framework of special measures to "be adopted
with developing exporting countries";
whereas agreements on trade in jute products    which constitute "these
special measures " have been negotiated "by the European Economic
Community with India and Bangladesh , and that these agreements
expire on 31 December 1975 ?
whereas it seems appropriate to authorise the opening of negotiations
with India and Bangladesh to establish a regime which will apply
after this date to trade in jute products }
RAS DECIDED
                             Sole Article
            The Commission is authorised to open negotiations for the
conclusion of an agreement between the European Economic Community and
India and Bangladesh on trade in jute products .
            The Commission shall lead these negotiations in consultation
with the Special Committee established under Article 113 of the Treaty ,
and in conformity with directives set out in the annexe to the present
decision *
Done at Brus sels ,                               For the Council
                                                  The Président
 ---pagebreak---                                                   AÎTNEX
                        NEGOTIATTNG DIRECTIVES
1 . Duration of agreement : 4 years until 31«12.1979 »
2 . Self-restraint by India and Bangladesh of their exports of
    jute products in categories 4 , 5 and 6 . Community ceilings will be
    established on the basis of those agreed for 1975 with an appropriate
    annual growth rate which will permit a substantial enlargement of
    present import possibilities *
3 . As a counterpart , the Community will pursue , on an autonomous
    basis , the suspension of customs duties in annual stages so
    that by 1.1.1980 products in categories 4 » 5 » and 6 may enter
    duty free *
    Products in categories 1 to 3 which will not be restrained will fall
under the general system of preferences from 1.1.1976 : zero duti
within the framework of ceilings .