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Fischler welcomes agricultural trade liberalisation with applicant countries

European Commission - IP/00/682   29/06/2000

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IP/00/682

Brussels, 29 June 2000

Fischler welcomes agricultural trade liberalisation with applicant countries

Franz FISCHLER, Commissioner for Agriculture, Rural Development and Fisheries, today welcomed the new agricultural trade liberalisation agreements the EU successfully negotiated with nine Central and Eastern European countries (CEECs). "This is a firm step forward in increasing free trade between us. And it is a necessary step which prepares the applicant countries for the single market." The agreements will enter into force on July 1, 2000. Based on current trade figures (1996-1998), CEEC agricultural exports to the EU to be exempted from duty will increase from, on average, 37% to, on average, 77%. EU agricultural exports to the nine CEECs to be exempted from duty will increase from, on average, 20% to 37%. (see Annex 2). While the results achieved so far are satisfying, negotiations will continue with a view to progressively expanding agricultural trade liberalisation with each country in order to avoid the potential negative impact of an immediate opening of markets upon accession.

Approach for the negotiations, including the so-called "double zero" option

The Council authorised the Commission in March 1999 to open negotiations with each of the CEECs with a view to further liberalising bilateral trade in agriculture. Negotiations with each of the countries have been carried out on a reciprocal basis, with no products à priori excluded from the negotiations. In accordance with the Council directives, a global balance of the negotiations has been achieved. The negotiations were equally founded on the principle of neutrality with respect to the functioning of the CAP.

The negotiating approach covered three different kinds of bilateral concessions linked to the degree of sensitivity of the products and the nature of the CAP mechanism:

List 1: For the least-sensitive products (CEEC products currently facing EU import duty of less than 10% and products imported from the EU and not cultivated in the CEECs), an immediate and full liberalisation of trade has been agreed for unlimited quantities. The list covers more than 400 products and includes, in particular, citrus fruits, olive oil and horse meat.

List 2: The so-called "double zero" approach provides for the reciprocal elimination of export refunds and the elimination of import tariffs within the framework of tariff quotas. The initial level of the tariff quota has been set, as far as possible, at the level corresponding to the current trade pattern (based on the average of the past three years) - see Annex 3. A substantial yearly increase of the tariff quotas has been agreed bilaterally, taking into account the sensitivity of the products and the potential trade development. At this stage, the approach only covers products for which the CAP provides for border protection (import tariffs and export refunds) such as pig meat, poultry, cheese and some fruits and vegetables. Products for which an internal CAP support system is applied have not been included in the double-zero approach, but could be envisaged at a later stage.

List 3: This involves a limited exchange of "ad hoc" concessions decided on the basis of specific requests made and agreed on a case by case basis. The list also aims at balancing the overall agreement.

The approach is identical for all the CEECs both for those in the Luxembourg group (Hungary, Poland, Czech Republic, Estonia, Slovenia) with whom negotiations on the agricultural chapter of the acquis were opened on June 14 and in the Helsinki group (Bulgaria, Romania, Lithuania, Latvia, Slovakia) with whom negotiations on the agriculture chapter have not yet begun.

Results of the negotiations

New progressive trade liberalisation agreements have to date been concluded with nine of the ten CEECs (see Annex 1). Foreseeing immediate liberalisation of most of the non-sensitive products, in particular a large number of Mediterranean products, the agreements equally provide for progressive liberalisation in the sectors of poultrymeat, pigmeat, cheese and some fruits and vegetables, based on the "double zero" approach(1). The results differ from one country to another (see Annex 3), according to their readiness to liberalise the trade .

Negotiations will continue with the aim to further free up the trade between the EU and the CEECs in order to prepare them for accession. In certain sectors, the current divergences between the respective CEECs' agricultural policies and the CAP remain too important for the moment to allow for free trade without affecting the functioning of the CAP.

State of negotiations with Poland

Negotiations to conclude an agreement with Poland are ongoing. The situation is more difficult given the unilateral decision by Poland to increase import duties on certain agricultural products as from 1999 in contradiction to the standstill provisions of the Europe Agreement. The Council has specified in its negotiating mandate that the possibility of concluding negotiations with each country shall be judged in light of progress made to remove trade barriers imposed on agricultural products in breach of the Europe Agreements.

Calendar for formal adoption of the agreements

The agreements foresee that the new concessions will enter into force on July 1, 2000. The Council Regulation relating to the concessions with Estonia was adopted on June 19. Given that the remaining eight regulations will not be adopted by the Council by July 1, the new concessions will be applied retroactively from this date(2). EU export refunds for the products included in the double zero approach have already been abolished for the countries concerned.

ANNEX 1

Date of conclusion of negotiations

Country

Date
Estonia22.11.1999
Hungary14.04.2000
Czech Rep04.05.2000
Slovak Rep04.05.2000
Latvia08.05.2000
Bulgaria18.05.2000
Slovenia22.05.2000
Romania26.05.2000
Lithuania05.06.2000

ANNEX 2:

Trade liberalisation: Evaluation of the impact of the agreements reached with 9 CEECs

'000 EURO

EU importsEU exports
Existing situation
Total Trade38 042 20346 689 591
Agriculture Trade1 786 4962 729 107
Exempted from duty652 634538 103
As a % of agricultural trade36.519.7
Liberalisation negotiations
List 1 non-sensitive219 846307 592
List II double zero352 395118 996
List III additional requests180 59178 690
Total new liberalisation752 832505 278
As a % of agricultural trade42.118.5
New total exempted from duty1 367 8171 013 020
As a % of agricultural trade76.637.1

ANNEX 3:

Products for which the "double zero" approach has been accepted

Pork

PoultryEggsCheeseTomatoesProcessed tomatoesApples
EstoniaIIIII
LatviaIIIIII
LithuaniaIIIIII
BulgariaIIIII
HungaryIII
Czech RepIII
Slovak RepIIIII
RomaniaII
Slovenia

(1) The situation with Estonia is unique in that the EU already benefits from preferential free trade arrangements for all of its agricultural exports to Estonia.

(2) For Lithuania, it was agreed by both parties that the application of the concessions will not come into force until January 1, 2001.


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