Proposal for a COUNCIL DECISION on the conclusion of the Agreement in the form of an Exchange of Letters between the European Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union

COUNCIL DECISION

Brussels, 22.6.2017

COM(2017) 333 final

2017/0137(NLE)

EXPLANATORY MEMORANDUM

With the accession of the Republic of Croatia, the European Union enlarged its customs union. Consequently, the European Union was required under World Trade Organisation (WTO) rules (Article XXIV:6 of the GATT 1994) to enter into negotiations with WTO Members having negotiating rights related to the tariff schedule of Croatia in order to eventually agree on a compensatory adjustment. Such adjustment is due if the adoption of the EU’s external tariff regime results in an increase in tariff beyond the level for which the acceding country has bound itself at the WTO.

On 15 July 2013, the Council authorised the Commission to open negotiations under Article XXIV:6 of the GATT 1994. The Commission has negotiated with the Members of the WTO holding negotiating rights with respect to the withdrawal of specific concessions in relation to the withdrawal of the schedule of the Republic of Croatia in the course of its accession to the European Union.

Negotiations with New Zealand resulted in a draft Agreement in the form of an Exchange of Letters that was initialled on 18 May 2017 in Geneva (the Agreement). Consequently, this proposal asks the Council to adopt a decision to conclude the Agreement in the form of an Exchange of Letters with New Zealand. In parallel, a separate proposal on the signature of this Agreement is also submitted.

The proposal falls under exclusive competence of the Union, Article 3(1)(e) of the Treaty on the Functioning of the European Union. The subsidiarity principle therefore does not apply.

New Zealand was affected by the withdrawal of Croatia's concessions. The compensatory adjustments do not exceed New Zealand's rights in this respect. The proposal complies with the proportionality treatment.

A Decision of the Council to conclude the Agreement is required under Article 218(6)(a) TFEU.

2017/0137 (NLE)

The results of the Agreement are as follows:

Add 1 875 tonnes to the EU tariff rate quota 'Meat of bovine animals, frozen – Edible offal of bovine animals, frozen', tariff item numbers 0202 and 0206.29.91, maintaining the present in-quota rate of 20%. The new tariff rate quota shall be 54 875 tonnes;

Add 135 tonnes (carcase weight) to the allocation for New Zealand under the EU tariff rate quota 'Meat of sheep or goats, fresh, chilled or frozen', tariff item number 0204, maintaining the present in-quota rate of 0%. The new tariff rate quota allocation to New Zealand shall be 228 389 tonnes.

The Commission will adopt implementing Regulations to expand and manage the relevant quotas, pursuant to Article 187(a) of the Single Common Market Organisation (CMO) Regulation (Regulation (EC) No 1308/2013).

These implementation measures are being prepared in parallel to this proposal.

on the conclusion of the Agreement in the form of an Exchange of Letters between the European Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union

Having regard to the Treaty on the Functioning of the European Union, and in particular first subparagraph of Article 207(4), in conjunction with point (a)(v) of the second subparagraph of Article 218(6) thereof,

Having regard to the proposal from the European Commission,

Having regard to the consent of the European Parliament,

Whereas:

On 15 July 2013 the Council authorised the Commission to open negotiations with certain other Members of the World Trade Organization under Article XXIV:6 of the General Agreement on Tariffs and Trade 1994 ('GATT 1994') , in the course of the accession to the Union of the Republic of Croatia.
Negotiations were conducted by the Commission in accordance with the negotiating directives adopted by the Council.
Those negotiations have been concluded and an Agreement in the form of an Exchange of Letters between the Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of GATT 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the Union was initialled on 18 May 2017.
The Agreement was signed on behalf of the Union on […], subject to its conclusion at a later date, in accordance with Council Decision […] ¹ .
The Agreement should be approved,

HAS ADOPTED THIS DECISION:

Article 1

The Agreement in the form of an Exchange of Letters between the European Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union is approved on behalf of the Union.

The text of the Agreement is attached to this Decision.

Article 2

The President of the Council shall designate the person empowered to proceed, on behalf of the Union, to give the notification provided for in the Agreement.

Article 3

This Decision shall enter into force on the date of its adoption. It shall be published in the Official Journal of the European Union.

The date of the entry into force of the Agreement shall be published in the Official Journal of the European Union by the General Secretariat of the Council.

Done at Brussels,

FINANCIAL STATEMENT
				DATE:
1.	BUDGET HEADING: Chapter 12 – Custom duties and other duties
2.	TITLE: Proposal for a Council Decision on the conclusion of the Agreement in the form of an Exchange of Letters between the European Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union
3.	LEGAL BASIS: Treaty on the Functioning of the European Union, and in particular Articles 207 and 218.
4.	AIMS: To conclude the Agreement in the form of an Exchange of Letters between the European Union and New Zealand.
5.	FINANCIAL IMPLICATIONS	CURRENT FINANCIAL YEAR 2017 (EUR million)	FOLLOWING FINANCIAL YEAR 2018 (EUR million)		FINANCIAL YEAR 2019 (EUR million)
5.0	EXPENDITURE - CHARGED TO THE EU BUDGET (REFUNDS/INTERVENTIONS) - NATIONAL AUTHORITIES - OTHER	-	-		-
5.1	REVENUE - OWN RESOURCES OF THE EU (LEVIES/CUSTOMS DUTIES) - NATIONAL	-	-		-
		2017	2018		2019
5.0.1	ESTIMATED EXPENDITURE	-	-		-
5.1.1	ESTIMATED REVENUE	-	-		-
5.2	METHOD OF CALCULATION: volumes multiplied by the in-quota rate duty
6.0	CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE CURRENT BUDGET?					NO
6.1	CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET?					NO
6.2	WILL A SUPPLEMENTARY BUDGET BE NECESSARY?					NO
6.3	WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS?					NO
OBSERVATIONS:

ANNEX to the Proposal for a Council Decision on the conclusion of the Agreement in the form of an Exchange of Letters between the European Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union

Brussels, 22.6.2017

COM(2017) 333 final

AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS

between the European Union and New Zealand pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union

A. Letter from the Union

Sir/Madam,

Following negotiations under Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of the Schedule of the Republic of Croatia in the course of its accession to the European Union, I have the honour to propose the following:

The European Union shall incorporate in its schedule, for the customs territory of the EU 28, the concessions contained in the schedule of the EU 27 with the following modifications:

The European Union and New Zealand shall notify to each other of the completion of their internal procedures for the entry into force of this Agreement. This Agreement shall enter into force 14 days after the date of receipt of the latest notification.

I should be obliged if you would confirm that your Government is in agreement with the above. I have the honour to propose that, if the above is acceptable to your Government, this letter and your confirmation shall together constitute an Agreement in the form of an Exchange of Letters between the European Union and New Zealand.

Please accept, Sir/Madam, the assurance of my highest consideration.

For the European Union

B. Letter from New Zealand

Sir/Madam,

I have the honour to acknowledge the receipt of your letter of today's date ________, which reads as follows:

"Following negotiations under Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of the Schedule of the Republic of Croatia in the course of its accession to the European Union, I have the honour to propose the following:

The European Union shall incorporate in its schedule, for the customs territory of the EU 28, the concessions contained in the schedule of the EU 27 with the following modifications:

I am able to inform you that my Government is in agreement with the contents of your letter.

For New Zealand