RETALIATION AGAINST THE RUSSIAN FEDERATION'S
IMPORT BAN ON COMMUNITY EGGS
(21253)
8214/00
COM(00) 255
| Draft Council Regulation on measures in retaliation to the Russian
Federation's import ban on fresh eggs for human consumption originating
in the European Community.
|
| Legal base:
| Article 133 EC; qualified majority voting
|
| |
| Document originated:
| 28 April 2000 |
| Forwarded to the Council:
| 2 May 2000 |
| Deposited in Parliament:
| 25 May 2000 |
| Department: |
Agriculture, Fisheries and Food
|
| Basis of consideration:
| EM of 5 June 2000 |
| Previous Committee Report:
| None |
| To be discussed in Council:
| No date known |
| Committee's assessment:
| Politically important |
| Committee's decision:
| Cleared, but further information requested
|
Background
17.1 According to the Commission, the terms of
the Co-operation Agreement with the Russian Federation permit
goods originating in the Community to be imported into Russia
free of quantitative restrictions. However, since May 1996, the
import into Russia of fresh eggs for human consumption has been
prohibited. This ban allegedly applied to all third countries,
and was based on human health protection. However, it has since
become clear that imports into Russia of fresh eggs originating
in the United States were not affected by the ban, and indeed
have increased substantially since its introduction. The Commission
says that consultations with the Russian authorities, as provided
for under the Agreement, have since been held on a number of occasions,
but without any adequate response having been given. Consequently,
in the absence of any evidence of human health problems, the ban
constitutes a disguised restriction on trade between the Parties
to the Agreement, which has resulted in substantial losses to
Community operators in the egg sector.
The current proposal
17.2 Against this background, the Commission
is now proposing that the Community should take retaliatory action
by introducing 7% import tariffs on sunflower seeds and rape seeds
originating in the Russian Federation, which currently enter free
of duty. It further proposes that the measure should be applied
until the Russian import ban has been abolished, or until the
Commission has received scientific evidence that it is justified
on health grounds.
17.3 In arriving at the rate of tariff proposed,
the Commission calculates that the trade value of the Russian
ban on eggs over the period 1996-2000 amounts to some 12.9 million
euro (£7.8 million). When set against average annual Community
imports of sunflower and rapeseeds from Russia of some 170 million
euro (£100 million) in the period 1996-98, the application
of a 7% rate would yield duty of around 12.95 million euro. However,
the Commission also suggests in its financial statement that the
introduction of such an import tariff on sunflower and rapeseeds
will totally discourage their importation into the Community.
On that basis, the actual detriment to the Russian Federation
would presumably be well in excess of 12.9 million euro.
The Government's view
17.4 In her Explanatory Memorandum of 5 June
2000, the Minister of State at the Ministry of Agriculture, Fisheries
and Food (the Rt. Hon. Joyce Quin) says that the UK interest is
limited to the economic effect which the Russian ban has on the
oversupplied Community egg market, where surpluses in the rest
of the Community have seriously undermined prices on the UK domestic
market. However, she adds that the UK has never exported fresh
eggs to the Russian Federation, and little of the sunflower and
rapeseeds imported from that source reaches the UK.
Conclusion
17.5 Whilst a trade dispute between the Community
and a major power is potentially a matter of some concern, we
accept that the Russian Federation appears to be in breach of
its obligations under the Co-operation Agreement, and that it
is appropriate for the Community to take retaliatory action. We
also understand the theoretical basis of the tariff rates proposed
by the Commission for sunflower and rapeseeds. In view of this,
and of the likelihood that the Council will want to act swiftly,
we are clearing the proposal.
17.6 On the other hand, we have at the same
time noted that the Commission considers that the practical effect
of imposing the level of tariffs proposed will be to discourage
any importation of these products, in which case the detriment
to the Russian Federation is likely to be considerably greater
than that suffered by the Community. Since the Minister has not
addressed this point in her Explanatory Memorandum, we would welcome
her comments on it, and also on the possibility that retaliatory
action on this scale might lead to an escalation of this dispute.
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