Page 99 Paragraphs 3.278 and 3
4. DEVELOPMENTS IN SELECTED SECTORS Page 113 – Paragraph
Paragraph 4.5 in the Secretariat's report refers to the fact that, for the EU "the main imports tend to be of raw products for processing while the main exports tend to be processed products". Question:
29. Does the EU intend to reform its trade policy, more specifically its tariffs and quotas regime, in order to allow the entrance of more imports of processed products, particularly from developing countries?
EU reply: The EU has no plans to autonomously change its tariffs for agricultural products and in particular CAP reforms are not intended to do so. Any change will result from a successful conclusion to the DDA. The EU has and will continue to negotiate preferential market access including for developing countries. In the meantime, the EU will continue to respect its WTO commitments.
Page 114 – Paragraph 4.8
Paragraph 4.8 in the Secretariat's report states that, although some steps have been taken in reducing the CAP spending and moving towards support decoupled of production, "the reform post-2013, like earlier reforms, will not directly address market access conditions into the EU market, and tariffs, tariff quotas and the Special Agricultural Safeguard will not be affected". Questions:
30. Does the EU intend to reform its market access policies, reducing its current high level of protection for agricultural products?
31. Is there any proposal currently under consideration in the EU so as to achieve this objective?
EU reply to questions 30 and 31: The EU has no plans to autonomously change its tariffs for agricultural products and in particular CAP reforms are not intended to do so. Any change will result from a successful conclusion to the DDA. The EU has and will continue to negotiate preferential market access including for developing countries. In the meantime, the EU will continue to respect its WTO commitments.
Page 114 – Paragraph 4.9
Paragraph 4.9 in the Secretariat's report mentions that, from end-2012, "the possibility to grant direct payments linked to production has been further restricted so that only suckler cows, sheep and goats, and cotton are eligible (where 35% of the cotton component of the Single Payment Scheme remains coupled to production)".
Questions:
32. Does the EU intend to completely eliminate the possibility of granting such direct payments linked to production?
33. If so, is there a timeframe under consideration?
EU reply to questions 32 and 33: This is not envisaged in the CAP for the period 2014-2020. EU Member States should be allowed to use part of their national ceilings for direct payments for coupled support in clearly defined cases where specific types of farming or specific agricultural sectors undergo certain difficulties and are particularly important for economic and/or social and/or environmental reasons. Applying coupled support will be optional for Member States and limited to an appropriate level. Payments will be based on fixed areas and yields or on a fixed number of animals.
Paragraph 4.10 states that, "under Article 69 of Council Regulation (EC) No. 73/2009 each member State may reserve up to 10% of the total amount available for direct payments to fund support for quality, marketing, environment, or risk management, or to assist farmers in disadvantaged areas, or types of farming in the dairy, rice, bovine meat, or sheep meat and goat meat sectors".
Questions:
34. How are the said direct payments implemented?
EU reply: Article 69(1) of Council Regulation (EC) No 73/2009 gives the possibility to EU Member States to use up to 10% of their national ceiling for direct payments to grant specific support. Nine categories of support measures can be implemented which are listed in Article 68(1) of the Regulation. The Member States notify their decision to implement the scheme to the European Commission by describing the support measures in a detailed way, including the objectives and the reasons of their decision. The Member States ensure consistency between specific support measures and measures implemented under other EU support instruments, including specific support, as well as measures funded by state aids. They also ensure that the support measures
they implement are verifiable and controllable. The European Commission carries out the assessment of the measures notified in view of ensuring their compliance with the legal framework. Some of the measures are subject to the Commission's approval.
35. Is there any link to production in the funding of marketing activities or the assistance of farmers in disadvantaged regions?
EU reply: Some of the measures listed in Article 68(1) of Regulation (EC) No 73/2009 may be linked to a volume of production and are subject to a limited maximum percentage of the Member State's national ceiling for direct payments fixed at 3.5% according to Article 69(4) of the Regulation. Such measures are provided for in particular in the case of the sector-specific measures implemented under Article 68(1)(b) of the Regulation, which are allowed to the extent necessary to create an incentive to maintain current levels of production.
36. What are the criteria for defining "disadvantaged regions" in the EU?
EU reply: The Member States target the sector-specific support granted under Article 68(1)(b) of Regulation (EC) No 73/2009 at economically vulnerable or environmentally sensitive areas. Under Article 68(1)(c) of the Regulation, the support is for areas subject to restructuring and/or development programs in order to prevent land being abandoned and/or to address specific disadvantages of farmers in those areas. There is no further EU definition of "disadvantaged regions" for the purposes of the scheme. It is up to Member States to identify the areas or regions where targeted support might be able to address specific difficulties and to implement the scheme accordingly.
Page 115 – Paragraph 4.13
In paragraph 4.13 of the Secretariat's report, the EU's public intervention mechanism is described, including its annual buying ceilings, and reference is made to the possibility of "purchases beyond these ceilings if the "market situation and, in particular, the development of market prices, so requires." In such cases buying-in would take place by tendering at a price not higher than the intervention price".
Questions:
37. Could the EU inform the criteria for defining which market situation or trend in market prices may trigger public interventions beyond the annual buying ceilings?
EU reply: Article 13 of Council Regulation (EC) No 1234/2007 provides that "… the Commission may decide to continue public intervention beyond the amounts (….) if the market situation and, in particular, the development of market prices, so requires."
38. How are the intervention prices determined in such cases?
EU reply: In such cases public intervention prices and quantities for intervention are determined by means of tendering procedures (see Article 18 of Council Regulation (EC) No 1234/2007). Page 118 – Paragraph 4.22
Regarding EU's production quotas for sugar, paragraph 4.22 of the Secretariat's report states that "unlike milk production, the quota can be exceeded without penalties, provided the excess is exported, sold for non-food uses (such as biofuels) or counted against the following year's quota". Questions:
39. Does the EU intend to strengthen its sugar production quotas regime by applying penalties when the established limits are exceeded, as is the case with milk.
40. How does the EU justify the fact that one of the possibilities of exceeding the quotas without being subjected to any penalty is through the exportation of sugar, a possibility which tends to distort the world market?
EU reply: The EU exports of out-of-quota sugar respect WTO commitments. Page 118 – Paragraph 4.23
Paragraph 4.23 of the Secretariat's report informs that "the use of export subsidies in the EU continued to decline although they were still being used in 2011 for some products such as poultry meat, eggs, beef and veal, processed pig meat products and some Non-Annex I products (prepared foods containing eggs)".
Question:
41. Does the EU intend to reform its agricultural policy in order to eliminate its current export subsidies, a practice that undeniably distorts international trade?
EU reply: On export competition, the EU is committed to the Hong Kong Ministerial Declaration, and in particular its paragraph 6, in its entirety. This states: "the date … for the elimination of all forms of export subsidies, together with the agreed progressivity and parallelism, will be confirmed only upon the completion of the modalities".
Page 123/124 – Paragraph 4.38
Paragraph 4.38 of the Secretariat's report includes data on the total catch in the EU and its participation in the world catch. According to the report, "in 2000 the EU-27 catch was 6% of world catch and in 2010 it had fallen to 3.9%".
Questions:
42. Could the EU inform the total catch by EU vessels outside EU waters, as well as provide an estimation of its participation in the world total catch?
EU reply: While the EU does not develop aggregated data on the total catch by EU vessels outside EU waters and estimation of its participation in the world total catch, EU vessels' catches data based on the fishing area as defined by FAO are available at the following web address: http://ec.europa.eu/fisheries/documentation/publications/pcp_en.pdf.
Then, for more detailed dataset, see: http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database.
World total catches can be obtained from FAO annual reports: http://www.fao.org/fishery/sofia/en.
43. In addition, could the EU provide the total catch figures of EU vessels in foreign waters (including third countries' EEZs) under access agreements, especially in developing countries?
EU reply: Regarding fisheries agreements, information is available on the web address: http://ec.europa.eu/fisheries/cfp/international/agreements/index_en.htm.
Page 127 – Paragraph 4.47
Paragraph 4.47 of the Secretariat's report states that "overfishing continues to be a major problem facing EU fishing with the majority of commercial fish stocks in EU waters giving cause for concern. In 2007, 29 out of 33 of Europe's most important commercial fish species were over-fished while "decisions on catch levels remain dominated by short-term thinking, and the catching capacity of the European Fleet remains more than twice what is needed to harvest [the EU's] fish stocks
sustainably.". Paragraph 4.51 (page ), on the other hand, describes the EU's total allowable catch and quota allocation system.
Questions:
44. Are there more stringent measures under consideration in the EU in order to address the overfishing problem in its waters?
EU reply: The European Commission evaluates the number of overfished stocks (the stocks where the latest estimate of fishing mortality rate is higher than the rate corresponding to maximum sustainable yield) based on analyses by independent scientists working at the "International Council for the Exploration of the Sea", the "Scientific, Technical and Economic Committee for Fisheries", and the scientific committees of various regional fisheries management organisations. According to these analyses from 2005 until 2013 the number of overfished stocks subject to annual regulations limiting fishing opportunities in EU waters (and nearby waters) in the Northeast Atlantic, including the North Sea and the Baltic Sea, fell from 32 to 16 (from 94% to 39% of the assessed resources).
Management of fishing capacity is subject to an entry/exit system. The fleet capacity for each Member State may not exceed certain levels, expressed in Kilowatt (KW) engine power and gross tonnage (GT). When a Member State withdraws a vessel using state funds (i.e. decommissioning) the maximum permitted levels are decreased by amounts corresponding to the capacity withdrawn.
This system has led to gradual reductions in ceilings on fleet capacity. The actual capacities of the fleets concerned have also reduced.
The European Commission expects that, based on the reform of the EU Common Fisheries Policy, overcapacity will be further reduced, where needed. The reform foresees some measures in this view. However, the final outcome of the reform of the EU Common Fisheries Policy is not known at this juncture as it is subject to adoption under ordinary legislative procedure foreseen by the Treaty on the functioning of the European Union and this procedure has not yet been completed by date of writing.
45. More specifically, is the EU envisaging any reform in its total allowable catch and quota allocation system?
EU reply: The reform of the EU Common Fisheries Policy is subject to adoption under ordinary legislative procedure foreseen by the Treaty on the functioning of the European Union and this procedure has not yet been completed by date of writing. Its outcome cannot be predicted at this stage. The proposal presented by the European Commission foresees the gradual introduction of an obligation to land all catches in various fisheries and species beginning in 2015. The nature of Total Allowable Catches and quotas would therefore change from limits on landings to limits on catches. The allocation system among EU Member States would remain unchanged. Member States would retain the facility to exchange quotas among themselves.
Page 128 – Paragraph 4.53
In paragraph 4.53 of the Secretariat's report, there is a description of the Regulation (EU) No. 1026/2012, which gives the Commission the power to "adopt measures against a third country which it has identified as allowing non-sustainable fishing of a fish stock it shares with the EU. Allowing non-sustainable fishing is defined as failure to cooperate in management of the shared stock 'in full compliance' with international law, and failing to adopt fishery management measures or adopting such measures without due regard for other countries and the EU. The measures that may be taken include: imposing quantitative restrictions on imports of fish from the stock, on imports of species associated with the stock, on imports of products made of or containing the stock or species associated with it; and other restrictions. Before taking such measures, the third country would be notified and it then has one month to respond and "remedy the situation".
Questions:
46. Could the EU explain the legal basis, especially under the WTO Agreements, for the imposition of import restrictions in such cases?
EU reply: The EU will implement, if needed, measures under Regulation (EU) No. 1026/2012 in a manner consistent with its WTO obligations. The EU notes in this context that trade relations between WTO Members should be conducted with due regard to the objective of sustainable development, including the protection and preservation of the environment and the conservation of natural resources, as stated in the WTO Agreement.
47. What are the criteria for assessing other countries' compliance to "international law" and how is "international law" defined for the purposes of Regulation (EU) No. 1026/2012? EU reply: The criteria for assessing other countries' compliance are set out in Article 3 of Regulation (EU) No. 1026/2012. In assessing compliance, the European Commission will consider international law, including international cooperation and conservation obligations designed to govern the sustainable exploitation of fish stocks, which is applicable to the other countries concerned, namely (i) international treaty law, including UNCLOS, UNFSA, international treaties setting up RFMOs and internationally binding measures established thereunder and/or international fisheries agreements, and (ii) international customary law. Relevant international practice, as, inter alia, reflected in the FAO Code of Conduct for Responsible Fisheries and/or the FAO International Plans of Action including the one for the management of fishing capacity and/or the one to prevent, deter and eliminate illegal, unreported and unregulated fishing, will be taken into account.
Pages 130/132 – Paragraphs 4.59/4.65
In paragraphs 4.59 to 4.65 of the Secretariat's report, the EU's policies to support fisheries are described.
Questions:
48. Could the EU inform how much support is provided for operational costs incurred in fisheries activities, i.e. the fuel tax exemptions referred to in paragraph 4.64?
EU reply: The EU does not provide financial support to operational costs. Individual Member States can provide fuel tax exemptions in the framework of Council Directive 2003/96/EC.
49. Could the EU explain what the "cost-reducing transfers" mentioned in paragraph 4.63 are? EU reply: Cost reducing transfers refer to aid provided by the EU to the Member States for the implementation and enforcement of the Common Fisheries Policy. Such support is provided within the framework of such regulations as:
Council Regulation (EC) No 199/2008 of 25.02.2008 concerning the establishment of a Community framework for the collection, management and use of data in the fisheries sector and support for scientific advice regarding the Common Fisheries Policy.
Council Regulation (EC) No 1224/2009 of 20 November 2009 establishing a Community control system for ensuring compliance with the rules of the common fisheries policy.
Council Regulation (EC) No 1198/2006 of 27.07.2006 on the European Fisheries Fund. Page 156 - Table 4.31Table 4.31 makes reference to the planned reform of Regulation 868/2004 concerning protection against subsidization and unfair pricing practices causing injury to EU carriers. One of its objectives is the definition at EU level of a template for a "fair competition clause" as a basis for inclusion in air services agreements.
Question:
50. How can the EU ensure that these "fair competition clauses" will not prevent foreign carriers from exploring air transport services in the EU?
EU reply: As key objective of EU external aviation policy, fair competition is meant to ensure that airlines compete on a level playing field which is not distorted by unfair practices by market players or state intervention.
Indeed, fair competition clauses are included in existing EU comprehensive air transport agreements establishing a liberal market access regime (complete liberalisation of third and fourth freedom traffic rights complemented by a gradual liberalisation of further traffic rights). Therefore, fair competition clauses will not prevent foreign carriers from having access to the EU air transport market; on the contrary, they will facilitate further access.
PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT