EUROPEAN COMMISSION
Brussels, 24.6.2019
COM(2019) 296 final/2 – DOWNGRADED on 16.7.2019
2019/0141(NLE)
Proposal for a
COUNCIL DECISION
on the signing, on behalf of the European Union, of an agreement with the United States of America on the Allocation to the United States of a Share in the Tariff Rate Quota provided for by Regulation (EC) No 617/2009 of 13 July 2009 opening an autonomous tariff quota for imports of high-quality beef
EXPLANATORY MEMORANDUM
1.CONTEXT OF THE PROPOSAL
•Reasons for and objectives of the proposal
Pursuant to Council Regulation (EC) No 617/2009, the European Union opened an annual tariff rate quota 1 for High Quality Beef in compliance with the Memorandum of Understanding between the European Commission and the United States and its revised version, the Revised Memorandum of Understanding with the United States of America Regarding the Importation of Beef from Animals Not Treated with Certain Growth-Promoting Hormones and Increased Duties applied by the United States to Certain Products of the European Union of 21 October 2013 2 (the "TRQ "). The revised Memorandum of Understanding was communicated by the Union and the United States to the WTO Dispute Settlement Body on 14 April 2014 and it sets out a roadmap aimed at settling the WTO dispute EC – Measures concerning Meat and Meat Products (Hormones) (DS26) ("EC-Hormones").
In December 2016, the United States took steps to reinstate increased duties on certain EU products in connection with the dispute in DS26. The procedure for the reinstatement of duties was opened upon the request of the US beef industry who raised concerns about the implementation of the TRQ.
With a view to avoid the reinstatement of increased duties on certain EU products, the European Union and the United States conducted consultations regarding the operation of the revised Memorandum of Understanding pursuant to Article IV.1(b) thereof, whereby the United States requested the allocation of a share of the tariff rate quota opened pursuant to the revised Memorandum of Understanding.
It is in the interest of the Union to allocate a share of the TRQ to the United States so that both Parties may eventually reach a mutually agreed solution to the WTO dispute in case DS26 to be notified to the WTO Dispute Settlement Body.
On 19 October 2018, the Council authorised the Commission to open negotiations on behalf of the Union with the United States of America, concerning the operation of the TRQ, with a view to allocate a share in the TRQ to the United States, with a view to a definitive resolution of the WTO dispute in case DS26. These negotiations were successfully concluded.
In addition, the Council authorised the Commission to seek the agreement of the other substantial supplying countries under the TRQ as regards the country-allocation of the TRQ, in line with the applicable WTO rules, to the extent necessary. Indeed, in order to comply with Article XIII:2 of the GATT, when a tariff quota is allocated among supplying countries, the party allocating the tariff quota should seek agreement with respect to the allocation of shares in the tariff quota with all substantial suppliers. In order to make sure that the country allocation of the TRQ complies with the EU WTO obligations, the EU therefore has to seek the agreement of the other substantial suppliers under the TRQ (Australia, Uruguay and Argentina). Accordingly, the Commission sought the accord of the substantial supplying countries and obtained their written consent with the allocation of a share of the TRQ to the United States in the form of letters of acceptance received on 10, 20 and 31 May 2019.
•Consistency with existing policy provisions in the policy area
Not applicable.
•Consistency with other Union policies
Not applicable.
2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
•Legal basis
Article 207(3) and the first subparagraph of Article 207(4), in conjunction with Article 218(5) of the TFEU
•Subsidiarity (for non-exclusive competence)
Not applicable, as the Union competence in the area of common commercial policy is exclusive (Article 3(1)(e) TFEU).
•Proportionality
Not applicable.
•Choice of the instrument
An international agreement is the appropriate instrument for the allocation of a share of the TRQ to the United States.
3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
•Ex-post evaluations/fitness checks of existing legislation
Not applicable.
•Stakeholder consultations
Not applicable.
•Collection and use of expertise
Not applicable.
•Impact assessment
Not applicable.
•Regulatory fitness and simplification
Not applicable.
•Fundamental rights
Not applicable.
4.BUDGETARY IMPLICATIONS
None.
2019/0141 (NLE)
Proposal for a
COUNCIL DECISION
on the signing, on behalf of the European Union, of an agreement with the United States of America on the Allocation to the United States of a Share in the Tariff Rate Quota provided for by Regulation (EC) No 617/2009 of 13 July 2009 opening an autonomous tariff quota for imports of high-quality beef
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207(3) and the first subparagraph of Article 207(4), in conjunction with Article 218(5) thereof,
Having regard to the proposal from the European Commission,
Whereas:
(1)Pursuant to Regulation (EC) No 617/2009 3 the European Union opened an annual tariff rate quota for High Quality Beef (the “TRQ”).
(2)On 19 October 2018, the Council authorised the Commission to open negotiations on behalf of the Union with the United States of America concerning the operation of the TRQ, including on the country-allocation of the TRQ, with a view to a definitive resolution of the WTO dispute in case DS26 (EC – Measures concerning Meat and Meat Products (Hormones)).
(3)These negotiations were successfully concluded with the United States on 27 February 2019.
(4)In addition, the Council authorised the Commission to seek the agreement of the other substantial supplying countries under the TRQ as regards the country-allocation of the TRQ, in line with the applicable WTO rules, to the extent necessary.
(5)The other substantial supplying countries confirmed in writing that they agree to the above country-allocation of the TRQ.
(6)Therefore, the above-mentioned agreement should be signed on behalf of the Union, subject to its conclusion at a later date,
HAS ADOPTED THIS DECISION:
Article 1
The signing of the agreement between the United States of America and the European Union on the Allocation to the United States of a Share in the Tariff Rate Quota for High Quality Beef referred to in the Revised Memorandum of Understanding between the United States of America and the European Union Regarding the Importation of Beef from Animals not Treated with Certain Growth-Promoting Hormones and Increased Duties Applied by the United States to Certain Products of the European Union (2014) is hereby approved on behalf of the Union, subject to the conclusion of the said agreement 4 .
The text of the agreement is attached to this Decision.
Article 2
The President of the Council is hereby authorised to designate the person(s) empowered to sign the Agreement on behalf of the Union.
.
Article 3
This Decision shall enter into force on the date of its adoption.
Done at Brussels,
For the Council
The President
EUROPEAN COMMISSION
Brussels, 24.6.2019
COM(2019) 296 final/2 – DOWNGRADED on 16.7.2019
ANNEX
to the
Proposal for a
COUNCIL DECISION
on the signing, on behalf of the European Union, of an agreement with the United States of America on the Allocation to the United States of a Share in the Tariff Rate Quota provided for by Regulation (EC) No 617/2009 of 13 July 2009 opening an autonomous tariff quota for imports of high-quality beef
ANNEX
AGREEMENT BETWEEN
THE UNITED STATES OF AMERICA
AND THE EUROPEAN UNION
ON THE ALLOCATION TO THE UNITED STATES OF A SHARE IN THE TARIFF RATE QUOTA FOR HIGH QUALITY BEEF REFERRED TO IN
THE REVISED MEMORANDUM OF UNDERSTANDING
REGARDING THE IMPORTATION OF BEEF FROM ANIMALS NOT TREATED WITH CERTAIN GROWTH-PROMOTING HORMONES AND INCREASED DUTIES APPLIED BY THE UNITED STATES TO CERTAIN PRODUCTS OF THE EUROPEAN UNION (2014)
The United States of America and the European Union, the Parties to the Revised Memorandum of Understanding between the United States of America and the European Union Regarding the Importation of Beef from Animals Not Treated with Certain Growth-Promoting Hormones and Increased Duties Applied by the United States to Certain Products of the European Union of 21 October 2013 (hereinafter “the 2014 MoU”), have agreed as follows:
Article 1
Objectives
The objectives of this Agreement are to:
1.allocate to the United States a share of the autonomous tariff rate quota ("TRQ") for High Quality Beef of 45 000 metric tonnes product weight referred to in Article II.4, Article II.5 and Article VI of the 2014 MoU; and
2.complement or modify certain rights and obligations of the Parties referred to in Articles III, IV, V, VII and VIII of the 2014 MoU.
Article 2
Allocations within the quota
1.The European Union shall allocate to the United States 35 000 metric tonnes of the 45 000 metric tonnes tariff rate quota referred to in Article 1. The remaining quantity of 10 000 metric tonnes shall be made available to all other countries. The allocations shall be phased in over a period of seven years (“the implementation period”) as follows:
|
United States |
All others |
|
|
Year 1 |
18 500 metric tonnes |
26 500 metric tonnes |
|
Year 2 |
23 000 metric tonnes |
22 000 metric tonnes |
|
Year 3 |
25 400 metric tonnes |
19 600 metric tonnes |
|
Year 4 |
27 800 metric tonnes |
17 200 metric tonnes |
|
Year 5 |
30 200 metric tonnes |
14 800 metric tonnes |
|
Year 6 |
32 600 metric tonnes |
12 400 metric tonnes |
|
Year 7 and subsequent years |
35 000 metric tonnes |
10 000 metric tonnes |
2.For certainty, the core obligations in Article II(1) of the 2014 MOU, including the in-quota tariff rate of zero (0) %, apply to the portion of the TRQ allocated to the United States.
3.The annual volume of the TRQ shall be evenly divided among four quarterly sub-periods. The quota year shall begin on 1 July and end on 30 June.
Should this Agreement enter into force on a date other than 1 July, Year 1 of the implementation period shall start on the first day of the next sub-period of the quota year and shall last for four consecutive sub-periods 1 . Any unused quantities from the sub-periods preceding, in that quota year, the first day of Year 1 shall be added to the quantities available in the first sub-period of Year 1 of the implementation period. These quantities shall be added to the quantities allocated to the United States and to all others in proportion to their shares in the overall volume of the TRQ.
Article 3
Quota management
The share of the TRQ for High Quality Beef allocated to the United States shall be administered by the European Union on a first-come, first-served basis. The European Union shall make every effort to administer the share of the TRQ allocated to the United States in a manner that allows importers to fully utilize it. This Article replaces Article III of the 2014 MoU.
Article 4
EC-Hormones dispute
1.The United States Trade Representative shall conclude the proceeding initiated in December 2016, pursuant to Section 306(c) of the Trade Act of 1974, as amended, with a determination not to reinstate action to exercise the authorization in WT/DS26/21. The United States shall publish its determination no later than on the date of the entry into effect of the country-specific quota allocation specified for Year 1 in Article 2.
2.During the implementation period referred to in Article 2(1), the review period referred to in Article 4(3), and until such time a mutually agreed solution referred to in Article 4(3) is notified:
(a)the Parties shall not request the establishment of a panel under Article 21.5 of the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU") in "European Communities – Measures concerning meat and meat products (Hormones)" (WT/DS26) ("EC — Hormones");
(b)the United States shall not suspend the application to the European Union of tariff concessions and related obligations as authorized by the Dispute Settlement Body of the World Trade Organization in EC — Hormones, Recourse by the United States to Article 22.7 of the Dispute Settlement Understanding WT/DS26/21.
3.No later than ten (10) years following the entry into force of this Agreement, the United States and the EU shall meet to review the operation of the TRQ with a view to reaching a mutually agreed solution to be notified to the WTO Dispute Settlement Body in accordance with Article 3.6 of DSU by the end of the review. The review shall be completed no later than 11 years following entry into force of this Agreement. This provision replaces Article IV of the 2014 MoU.
4.Should the Parties fail to jointly notify such a mutually agreed solution to the WTO Dispute Settlement Body within 11 years following the entry into force of this Agreement, either Party may terminate the Agreement in accordance with Article 6.1.
Article 5
On-the-spot checks
The Commission may request the Government of the United States to authorize representatives of the Commission to carry out on-the-spot checks in the United States provided such on-the-spot checks are conducted on a non-discriminatory basis with respect to other country suppliers. Those checks shall be performed jointly with the competent authorities of the United States.
Article 6
Withdrawal and Effects
1.Either Party may withdraw from this Agreement by providing written notice to the other Party. This Agreement shall be terminated six months from the date of receipt of that notice by the other Party. Withdrawal from this Agreement shall not constitute withdrawal from the 2014 MoU unless the Parties expressly declare such an intention.
2.Withdrawal from the 2014 MoU pursuant to its Article V.4 shall entail withdrawal from this Agreement. The Parties shall respect the core obligations listed in Article II of the 2014 MoU during the six-month period from the date when the withdrawal notice referred to in Article V.4 therein was provided.
3.Absent notification to the WTO Dispute Settlement Body of a mutually agreed solution pursuant to Article 4(3), nothing in this Agreement shall be construed as changing the respective rights or obligations of either party under the DSU with respect to EC — Hormones.
4.Nothing in this Agreement shall be construed as conferring rights or imposing obligations on persons other than those established between the Parties themselves, nor as permitting that this Agreement be directly invoked before the courts and in the domestic legal systems of the Parties.
5.This Agreement shall enter into force on the first day after the date on which both Parties notified each other of the completion of the internal procedures that are necessary to ensure compliance with obligations of the Parties under Article 2 and Article 4 (1).
IN WITNESS WHEREOF the undersigned, being duly authorized by their respective Governments, have signed this Agreement.
DONE at <LOCATION> this <DATE>, in duplicate in the English language, which is the authentic text of the Agreement.
For the United States of America For the European Union