1 Import arrangements
for rice
| (a)
(25817)
11294/04
COM(04) 485
(b)
(25818)
11295/04
COM(04) 484
|
Draft Council Decision on the conclusion of an Agreement in the form of an exchange of letters between the European Community and India pursuant to Article XXVIII of GATT 1994 relating to the modification of concessions with respect to the rice provided for in Schedule CXL annexed to the GATT 1994
Draft Council Decision on the conclusion of an Agreement in the form of an exchange of letters between the European Community and Pakistan pursuant to Article XXVIII of GATT 1994 relating to the modification of concessions with respect to the rice provided for in Schedule CXL annexed to the GATT 1994
Draft Council Decision modifying the Community import regime for rice
|
| Legal base | Articles 133 and 300(2)EC; QMV
|
| Documents originated | 7 July 2004
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| Deposited in Parliament | 14 July 2004
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| Department | Environment, Food and Rural Affairs
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| Basis of consideration | Minister's letter of 14 July 2004
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| Previous Committee Report | None, but see footnotes
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| To be discussed in Council | 19 July 2004
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information awaited
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Background
1.1 The common organisation of the market in rice has contained
many of the features traditionally associated with the various
commodity regimes under the Common Agricultural Policy (CAP),
notably provision for public intervention, import levies, and
export refunds. However, in line with the reforms made in other
arable areas, a number of changes have been made in recent years,
with reductions in the intervention price being compensated for
by the introduction of direct area payments for producers. Also,
following the GATT Uruguay Round negotiations, the system under
which import levies varied according to the difference between
the Community threshold price and world prices was replaced by
a series of fixed tariffs, which operated alongside a ceiling
on the price of imported rice equal to 188% of the intervention
price for Japonica rice and 180% of that for Indica rice,[1]
and preferential access for 160,000 tonnes of husked rice from
the ACP/OCT[2] countries.
In addition, Basmati rice (aromatic Indica rice from India and
Pakistan) has had a special duty abatement, in recognition of
its higher price.
1.2 In 2000, the Commission put forward proposals
for reforming the rice regime, which would have involved the abolition
of the intervention price system.[3]
Our predecessors pointed out that this would have had major implications
for the import arrangements, given the relationship which existed
between the intervention price and the ceiling imposed on imported
rice. However, we subsequently noted that these proposals had
been overtaken by those put forward in July 2002 as part of the
more general mid-term review of the Agenda 2000 reforms,[4]
which eventually resulted in the retention of an intervention
price, albeit with the level of support reduced by 50% (from just
under €300 per tonne to €150 per tonne).
1.3 Although this turned out to be a much less radical
change than that previously envisaged, it does nevertheless still
have an impact on imports, because of the corresponding reduction
in the ceiling prices. The Council therefore authorised the Commission
in June 2003 to notify the WTO that the Community intended to
modify the tariff arrangements in this area, in order to safeguard
the position of its own producers.
The current documents
1.4 In the light of the discussions which it has
since had with the Community's principal suppliers, the Commission
has now put forward these two documents —
one (document (a)) setting out draft Council Decisions on the
conclusion of exchanges of letters with India and Pakistan on
the modifications which have been agreed with those two countries,
and the other (document (b)) setting out the consequential changes
proposed to the Community's import regime, notably the application
of a fixed tariff of €65
per tonne for husked rice and one of €175
per tonne for milled rice. However, the Commission says that
it has not been able to negotiate an acceptable agreement with
two other important suppliers (the United States and Thailand),
though it does not indicate either the reasons for this failure
or whether any further attempts are being made to reach an agreement.
The Government's view
1.5 Although we have yet to receive an Explanatory
Memorandum on these documents, we have been sent a letter of 14
July 2004 from the Parliamentary Under-Secretary of State (Farming,
Foods and Sustainable Energy) at the Department for Environment,
Food and Rural Affairs (Lord Whitty), indicating that, although
the position of Thailand is still unclear, the United States has
said that the proposed tariff of €65
per tonne on husked rice would make its produce completely uncompetitive
on the European market.
1.6 The Minister also says that, although the Commission
has only just produced these two documents, it will be seeking
agreement on them at the meeting of the Agriculture and Fisheries
Council being held on 19 July, and that the Government is likely
therefore to be face with the need to cast a vote on them before
parliamentary scrutiny clearance has been obtained in the normal
way. He adds that, although the Government agreed last July that
the Commission should seek to negotiate new arrangements, it asked
that account should be taken of the legitimate interests of existing
preferential suppliers to the Community market, and that this
is a "very complex and difficult issue", which is still
evolving. He also believes that there is a possibility of a qualified
majority in the Council in favour of the Commission's proposals,
despite the concerns which the UK has expressed over the lack
of agreement with the Unites States and Thailand, and the questions
which it has raised over the Commission's calculations. He says
that the Government is consulting urgently with a range of interests
on the best way ahead, but has not yet reached a decision on which
way to vote.
Conclusion
1.7 We find it unacceptable that an issue described
as very complex and difficult should be rushed through the Council
in this manner. The Protocol on the role of national parliaments
annexed to the Treaty of Amsterdam provides for six weeks to elapse
between a legislative proposal being made available in all languages
and the date when it is placed on a Council agenda for decision,
subject to exceptions on grounds of urgency, but there do not
appear to be any such grounds in this case, and none are stated
(as the Protocol requires) on the draft Decision itself. We ask
the Minister to tell us what justification the Commission gave
for placing the draft Decision on the Council agenda for decision
within the six-week period provided for in the Protocol, and what
discussion there was in the Council of the requirements of the
Protocol.
1.8 As it is, we can only note the position,
and await the Explanatory Memorandum which the Minister has promised.
This will no doubt indicate what decision (if any) the Council
reached on 19 July, but it would also be helpful if, in addition
to confirming that the outcome meets the needs of the UK's main
ACP/OCT suppliers — as we infer is the case from the apparent
agreement of India and Pakistan — it could also spell out
the implications of the failure to reach agreement with Thailand
and the United States. In particular, we are conscious of a tendency
in the latter case for disputes with the Community to escalate
into potentially damaging retaliatory action, and we would like
to know what steps are being taken to avoid such a development
in this instance. In the meantime, we will hold the documents
under scrutiny.
1 Japonica rice is round and medium grain and has traditionally
been produced and consumed within the southern Member States of
the Community, whilst Indica rice is long grain, imported and
largely consumed in the northern Member States. Back
2
African, Caribbean and Pacific/Overseas Countries and Territories. Back
3
(21358) 9439/00; see HC 23-xxiv (1999-2000), para 7 (12 July 2000),
HC 23-xxxi (1999-2000), para 8 (29 November 2000) and HC 63-xiv
(2002-03), para 3 (5 March 2003). Back
4
(23670) 10879/02); see HC 63-vii (2002-03), para 2 (15 January
2003) and (24234) - ; see HC 63-xi (2002-03), para 1 (5 February
2003) and HC 63-xxiii (2002-03), para 11 (4 June 2003).Official
Report, 12 February 2003, Cols. 973-1004. Back
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