Keywords
Summary

Keywords

1 International agreements - Agreements concluded by Member States - Agreements predating the EC Treaty - Article 234 of the Treaty - Purpose - Scope - Imports from a third country which acceded to an agreement before the entry into force of the Treaty - Inapplicability of Article 234

(EC Treaty, Art. 234, first para.; General Agreement on Tariffs and Trade 1994; Council Regulation No 404/93; Commission Regulation No 478/95)

2 Agriculture - Common organisation of the markets - Bananas - Import regime - Tariff quota - Division into national quotas - Discrimination - None - Introduction of an export licence system affecting only Category A and C traders - Breach of the principle of non-discrimination

(EC Treaty, Art. 40(3); Council Regulation No 404/93; Commission Regulation No 478/95, Arts 1(1) and 3(2))

Summary

3 The purpose of the first paragraph of Article 234 of the Treaty is to make clear, in accordance with the principles of international law, that application of the Treaty does not affect the commitment of the Member State concerned to respect the rights of third countries under an earlier agreement and to comply with its obligations thereunder. Thus, for a Community provision to be deprived of effect as a result of an international agreement, two conditions must be fulfilled: the agreement must have been concluded before the entry into force of the Treaty and the third country concerned must derive from it rights which it can require the Member State concerned to respect.

Consequently, the provision in question does not apply to cases involving imports of bananas from a third country which is not a party to an international agreement concluded by Member States before the entry into force of the Treaty.

The foregoing applies specifically to imports of bananas from Ecuador during 1995 which were covered by the provisions of Regulations Nos 404/93 and 478/95 which were allegedly contrary to certain articles of GATT. That third country was not a contracting party to GATT 1947 and did not become a member of the World Trade Organisation, and therefore a party to GATT 1994, until 1996.

4 Article 1(1) of Regulation No 478/95 on additional rules for the application of Council Regulation No 404/93 as regards the tariff quota arrangements for imports of bananas into the Community and amending Regulation No 1442/93 provides that the tariff quota for imports of third-country and non-traditional ACP bananas is to be divided into specific shares allocated to various countries or groups of third countries, a given percentage being reserved for the contracting States to a framework agreement concluded with the Community. Article 3(2) provides that only Category A and C operators, and not Category B operators (including operators who have marketed Community and/or traditional ACP bananas), are required to obtain export licences from the competent authorities in Colombia, Costa Rica and Nicaragua in order to import bananas from those countries.

The division of the tariff quota into national quotas, which favours certain third countries and thus limits the import opportunities of economic operators who traditionally import bananas from other third countries, is not contrary to the general principle of non-discrimination, as stated in the second subparagraph of Article 40(3) of the Treaty.

There is no general principle of Community law obliging the Community, in its external relations, to accord third countries equal treatment in all respects and, if different treatment of third countries is compatible with Community law, then different treatment accorded to traders within the Community must also be regarded as compatible with Community law where that different treatment is merely an automatic consequence of the different treatment accorded to third countries with which such traders have entered into commercial relations. The restrictions on import opportunities which the introduction of country quotas is likely to entail for economic operators in the categories concerned are the automatic consequence of differences in the treatment accorded to third countries, depending on whether or not they are parties to the Framework Agreement and on the size of the quota allocated to them in that agreement.

On the other hand, the difference in treatment consisting in the exemption of Category B operators from the export-licence system, as a result of which only Category A and C operators have to pay a price for bananas from the third countries concerned which is some 33% higher, is incompatible with the abovementioned prohibition of discrimination, which is merely a specific enunciation of the general principle of equality, one of the fundamental principles of Community law, and renders Regulation No 478/95 invalid to the extent to which it imposes that obligation only on Category A and C operators.

Admittedly, the common organisation of the market in bananas, as established by Regulation No 404/93, and in particular the system of tariff-quota allocation, involves certain restrictions or differences of treatment detrimental to Category A and C operators which are not contrary to the general principle of non-discrimination in so far as they are inherent in the objective of integrating previously compartmentalised markets, bearing in mind the different situations of the various categories of economic operators before the establishment of the common organisation of the market. It is also true that pursuit of the objective of common organisation, which is to guarantee disposal of Community production and traditional ACP production, entails striking a balance between the various categories of economic operators in question.

However, it has not been shown that that balance, in so far as it has been disturbed by the quota increase and the concomitant lowering of customs duties provided for in the Framework Agreement, which also benefit Category B operators, could be restored only by granting a substantial advantage to that same category of operators and, thus, at the cost of introducing a new difference in treatment detrimental to the other categories of operators who had already, when the tariff quota and the machinery for dividing it up were introduced, been subjected to similar restrictions and differences in treatment.