European
Communities
EUROPEAN
PARLIAMENT
Wbrking Documents
1983-
198412 ftlarch 1984
REPORT
drarn up on behal.f
of
the
Committee onExternaI Economic Retations
on economic and
trade retations
between the EEC and EFTARapporteur:
ilrs
PRUV0TDocurlENT 1-1496t84
PE 82.8471f
in.
During
its sitting of
13 December L982, the European Parliament referredthe motion
for
a
reeotution by Miss HOOPER (Doc. L-g42l8D andat its sitting
of
15 September 1983 the motionfor
a resolution
by Mre NIELSEN on relationswith
the Nordic countriee 0-709183) pursuantto
Rule 47 of, the Rules ofProcedure
to
the Conrmittee on External Economic Relations as the conmitteereeponsible and
to
the Cormnittee on Economie and MonetaryAffairs
and thePolitical
Affaire
Comnitteefor their
opinion.At
its
meetingof
19 January 1983 the conrmittee decidedto
draw up areport
and appointed Mrs PRWOT rapporteur.It
considered thedraft
report
aEits
meetingsof
2 November 1983 and22 February 1984;
at
the
tatter
rneetingit
unanimousl.y adopted the motion fora resolution
as a whole.Ttre
following
tookpart
in
thevote:
Sir
Fred CATHERI{OOD, chairman;Mr van AERSSEN, eecorrd vice-chairman; Mrs BADUEL GLORIOSO, Mr BORD,
Mr DAMSEAUX (deputizing
for
the repporteur, Mrs PRUVOT), Lord HARMAR-NICHOLLS(deputizing
for
Miss HooPER), Mr M0MMERSTEEG, Mrs MOREAU, Mr PELIKAN,Hr PESIIAZOGLOU,
tlr
MDOUX, Mr RIEGER, Mr RMEREZ, Mr SPENCER, Mr STELLA andSir
Jack SIEWARI-CLARK.The Corunitteq on Economic and Monetary
Affairs
and thePo1itical
Affairs
Cormittee
will
nof
bedelivering
an opinion.Ttris
report
waq Eabled on 28 February 1984.Ttre deadline
for
the tabling
of
amendmentsto this
report
aPPeersin
thedraft
agendafor
the
part-sessionat
ntrichit trill
be debated.rrPo378E
OR.FR.
CONTENTS
A.
MOTION FOR A RESOLUTIONFage
5
B.
EXPLANATORY STATEMENT...
9I.
Assessmentof
economic and traderelations
betweenthe EC and EFTA
II.
Barriers
to
trade betwden the EC and the EFTAcountries ..
...
... .
.
L7TII.
Problemof
governmentaids
in
international
tradeagregments
...
... o...
22IV.
Modificationof
Greenland!s
staEus
...
24Annex
1
Extract
from the declarati-on by the EFTA councils atministerial
level ...
...
27I
Annex
2
Extract
fromthe
statement by thecouncil
of
20July
1982to
markthe tenth
anniversaryof
the Free TradeAgreements concluded
by
the EECwith
the EF"IAcountrigs
...
...
...
28Annex
3
List of
ereasin
which the cormnission considere thatstronger meaaures are both desirable and
feaeible
.
.
29Annex
4
Motionfor
a
reeolution by Miss HOOpER(ooc.
L-924182)...
...
...
30Annex
5
Motionfor
a resolution
by Mrs NIELSEN(ooc.
L-709183)...
...
32tIPo378E
A
Ttre Conrmittee on External Economic Relations hereby submits
to
the EuropeanPar:liament
the
following motionfor
a resolution
togetherwith
explanatorystetement:
I,IOTION FOR A RESOLUTION
on economic and trade
retations
between the European Conmunity and the EFTA countriegThe European Parliament,
-
having regardto
the motionfor
a resolution
by Miss HOOPER (Doc. L-924t82)-
having regardto
the motionfor
a
reeolution by Mrs NIELSEN(ooc.
1-709/83)-
having regardto
the
proposal from the cornnissionto
the council(Doc.1-58/S3)
-
wtrereaswith
theabolition
of
custonsduties
between the EEC and EFTA frorn1 January 1984
the largest
free
trade areain
the world has beenestablished
in
Europe,-
having regardto
the egreements concluded between EFTA and the EC and thestatement by the Council
of
20July
1982to
mark thetenth
anniversary ofthe
signatureof
the Free Trade Agreements concluded bythe
EC tith
theEFTA countries,
-
having regardto
the discussions held byite
delegationwith
an EFTAparliamentary delegation
in
straebourg on9
and 10 February 1983,1 and 2 December 1983 and
in
particular
thernlnieterial
meetingto
be heldon 9
April
1984,-
having regardto
thereport
bythe
Conmittee on External Economic Relations(Doc. 1-14e6/83),
rrPo378E
A.
endorsingthe
importance attached by the Councilin
the above-nrentionedstatement Eo the development
of
cooperation between the EEC and EFTA,B.
noting
that
current relatione
between the EFTA countries and EC MenberStates are generally speaking
veiy
good andthat
the EFTA countries areprincipal
trading
partnersof
thb EC, nakinga
significant
contributionbal.ance
of
payments equilibrium,the
to
E.
C. having regard
to
the
cotrmon economic,political,
soeial,
energy andenvironment problems
currently
facedby
the countriesof
l{estern Europe,D. heving regard
to
the
creation onI
July
L977of
a
Europeanfree
trade areaincluding
17countries
(10 Conmunity lrlember States and 7 EFTA countries),1.
having regard
to
the large
degreeof
cooperation alreadytaking
placebetween the Corumunity Member States and the abovernentioned countries,
particularly with
regardto
free
trade agreements, cooperation on the EMSand Euratom research,
Notes
with satisfaction
the
favourableresults
of
the
free
trade agreementsand hopes
that
the
final
obstactesto
trading
relations,
in
particular
non-tariff
barriers,
will
be eliminated ae soon as poesible;2.
I,Ietcomesthe
ctoselyknit
cooperation andtrading
relations
between the connnunity Memberstates,
sweden, Norway, rceland,Finland,
switzerland,Austria
and Portugal;3.
Requests the Councilto
contact the EFTA Councilof
Ministerewith
a viewto
organizingjoint
meetingsof
ministers
or
officiale, in
particular
for
the
purposeof
eliminating
technicalbarriers
to
trade;4.
Considersthat
it is
eseential
to
harmonize technical standardswithin
EFTAand the EEC
in
order
to
promotetrade,
andcalls
onatl
the
relevant bodiesto
begin preparatory workwith
this
endin
view;5.
Hopes Ehat the probtenof
rules
of
origin
may besettled
asewiftly
aspossible,
in
the
interest of
both sidee;wPo378E
6.
Requeste the Council and the Foreign Ministers meetingin political
cooperation
to
establish regular
contectwith
the governmenteof
the EFTAcountries on iasuee
of joint
interest to
all
l{estern European countries inconjunction
with
negotiationo onspecific
topics
conductedwithin
international
organizationeor
on the occaeionof
direct
intergovernmentalmeetings;
7.
Earnestly desirescloser
contactg betweenthe
countries concernedat all
leve1e,
for
example throughcollaboration
between ECOSOC, the EFTAConsultative Comrittee and the EEC;
8.
Hopeethat
the countriesof
l{estern Europe as a ntrolewill
be ableto
takea
united
etandat
majorinternational
conferences, and attachee thegreatest inportance
to
proceedinga conductedwithin
GATTor parallel
to it;
9.
Notea the devaluationof
the Swedieh kronaof
8 october 1982 and hopesdistortions
will
not
ariee
in
economic and traderelations
betrreen EFTAand the EEC;
10. Requeete the Comnission
of
the European Cormrunitiesto
report
a8 soon as possible on theeffect
of
the devaluationof
the Swedishkrona
oninternational
trade as a ntrole once the neceosarystatistical
data areavailable;
11. Holds
to
theprinciple that
any attemptto
reduce imports from EFTAcountries on the Pretext
of
defendingthe
internal
rnarket woutd bedetrimental;
12. Hopes,
with
regardto
moneterypolicy that
some formof
eolidarity
andsupport can be eetablished between the l{estern European currencies and the
EMS, wtrich might address the problen
of
the European partnero;13. Declaree
that
it is
preparedto
increase contactat
perliamentary levelwith
all
EE'[A countries by wtratever meana seem most appropriate;wP0378E
E2.847ltin-14.
Instructs
ite
Presidentto
forwardthie
reeolution
to
the Council andCorunission
of
the European Conununities, the Conferenceof
Foreignt{inisters
rneetingin politieal
cooperation, the major internationalinEereat groups
of
Western Europe and the Governmentsof
the Member Stetegand those
of
Finland,
Sweden, Norway,Iceland,
Portugat,Austria
andSsitzerland and
to
the parlianentsof
the FaroeIsles
and the ftana islands.[rPo378E OR.FR.
EXPI.ANATORY STATEI.TENT
-I.
ASSESSI.{ENT OF ECONOI.{IC AND TMDE RELATIONSBETWEEN THE EEC and EFTA
Introduction
l' ol
22 March 1957 the Treatyof
Rome, establiahing the European Econouriccormnunity' was
eigned.
rt
enteredinto
force
onI
January1958.
one yearlater, in
February 1g5g, representativesof
theAustrian,
British,
Danish,Norwegian, Portuguese, Swedieh and Swies Governments ruet
in
OgIoto
lay
thefoundations
of
a free
trade zonefor
induetrial products.
The stockholnr
convention,
establishing
the European Free Trade Aseociation(nrre)
was signed
on 2 January 1960 and entered
into
force on 3 Mayof
the sameyear.
Finlandgcceded
to it in
1961.
Icel.andin
1970.2'
The Convention providedfor
the
abolition
of
custome dut:les andquantitative
reatrictione
on trade-
anobjective
which wae reachedin
f966-following
ablueprint
fairly
eimilar
to
thet
of
the EEC,but
dealingonly
withinduetrial
producte, subjectto
certain particular
condiGions. The conventiondid
not
imply thecreation
of
a
cormon customstariff
vis-a-r,is
the
rest
ofthe rsorld'
nor
the haruonizationof legislation; it
waea
fr.ee trade area andnot e
cuetom8 unionor
conmonmarket.
Rulesin
the Convention dealing withcompetition and
the
right of
establishnent were directed moreat
avoidingtrade
discrimination
thanat
marketunification.
3'
with
time EFTA members have considerably developedtheir
cooperation,Particulerly
byeliminating technical
obstaclesto
trade,
where they hsvecollaborated
lrith
the cotmunity, and by providingtechnical
and economicaid
to Portugal'
Economic consultations have increased, covering such mettersaB
international
economicrelatione
andregional
policy.
cooperrrtion betweenEFTA and Yugoslavia has been encouraged through
the
establiehrnentof
a Joint EFTA-Yugoelavia Conmrittee.
rn
lray 1980a free
tradeagreemenE wae conducted between Spain end EFTA.
ttPo378E
Ite
developmentof
relatione
rrith
the European Comunity4,
Ttre openingof
negotiationefor
ttrefirst
enlargementof
the Comunity in1969 eoon
led to
discuaeions onrelations
between EFTA countries and the European Conmunity. Agreementorere
signedwith
gtrra countrieain
July
1972except
for
the agreementwith
Finland,
ctrich was merelyinitialled in
July
andsigned on 5 October 1973, and the agreement
rith
Norway which rres negotiatedlater
and signed on 14 May1973.
Ttre agreernents providedfor
theestablieh-ment
of
a free
trade zonefor
induetrial
products between the EEC and each ofthe EFTA
countries, with
minor concessionefor
certain
agricultural
producte. Consequencesof
the
Swedieh devaluation5.
Following the devaluations,statistics for
the
first
five
nontheof
1983show
that
Swedenrs exports rose by 82,rtrile
exports from the EECto
Swedenincreased by 57
in
the same period.No
firm
conclusions cen bedram
from thesefigures
as awhole.
Brokendown country-by-country, they show an increaee
of
more than 347ia
importsfrorn Sweden
into
the
Belgo-Luxembourg Union and an increaaeof
more than 152in
Swedish exportsto
the United Kingdom;the
level
of
exporteto
otherConrnunity countries
ie
rnuch lower.Swedenrs exports
to
Denmark increasedby tonlyr juet
above 91,a
vetymodest
rise
comparedto
exportsto
the United Kingdom, and one which does notappear
to
have had disastrous coos€Qu€oc9s.EEC-EFTA cooperation
in
the rnonetaryfield
6.
Ttrisis
e verysensitive
area whichis
a
subjectof
great
interegt
andconsiderable concern
for all
theparties
involved.I'Iider cooperation
in thia field will
reguire
lengthy and very complexprepgration, and
there
i.sunlikely to
besignificant
progress exceptin
thevery
long t€rtn.I.t"o378E
OR. FR.
Itgd s lelwgeg
lhs
Europegn_Comrun i ty_and_EFIATtre importance
of
EFTAin
Comunity trade7.
TableI
sholre,for
the period L974to
1981,the
importance repregented byEFTA
in total
cormrunity tradewith
third countries. It
carrr be seenthat
up tothe
late
seventies the proportionof
EUR9
imports coming from the EFTAcountriea showed
a
considerable increase, from L5.67.in
1974to
18.42in lglg,
but that
in
recent yeerothis
figure
hasfallen
back eomewhat(tl.4Z in
1981).rn
bothrelative
and absolute terms EFTA has been e more importsnt exportnarket
thanit ie
an importprovider.
The group hae coneiotently representedup
to
one quarterof all
export sales from the Conmunitywith
a
peakof
25.47.being reached
in
1980.
Thishigh
level
of
export salee has meantthar
theconurunity has mainteined
a poeitive
trade balancewith
trrtl
over the entireperiod.
The importance
of
the Cosurunityin
EFTA trade8. In
table
2,
the normal conceptof
lookingat
the Conrnunity asa
eingletrading
entity (i.e.
by excludingall
intra-Conununitytrade)
has been extendedto
the EFTAgroup.
Thie has been done so asto
be ableto
Bssess theimportance
of
the Conrmunity asa
trading partner
for
EFTA orrthe
same basis asin
the previouesection.
Thetitle
rExtra EFTA| thereforerefers to
all
trade
carried out
by the EFTA countries excluding tradewith
other EFTA partners.rt
ahould be notedthdt
the
source andunits of
measurementof this
table
arenot
the ssme aafor
table
I
and nodirect
comparieons are poseible between thetwo tablee due
to
differenceein
methodology.It
can beclearly
Been from Table3 that
the Comnunityis
an extremelyinPortent
trading
Partnerfor
EFTA,in
termeof
both irnports andexports.
In1978 the comrunity (nun
to)
supplieda
peak of. 657of toral
EFTA iurporrsconring from
third
countries,
a market share whichfell
backto
59.42in
19g1.As an export market the Conununity accounted
for
alnost
602of all
externalsales
of
the EFTA groqpin
1981, having reacheda level
of
62.62in
theprevious yearo
lfPo378E
Structure
of
EC-EFTA trade9.
Tabl.e3
provides a breakdosnof
trade between EUR9
and the EFTA group byrnajor product
categoriee.
Hereit
can be seenthat
the
trade betweenthe
twogrouPe
is
consistently
dominated by manufactured products (chemicals,machinery and transport equipment and other manufactured goods),
with
food andtaw materials accounting
for
only
a
small proportionof
both importe andexport6.
In
termsof
trade balances,in
1981 the Cormunity uraintaineda
surplus inal.l
of
the categories considered exceptfuel
products, where EFTA haea
smalladvantage. AIso noteworthy
is
the
fact that
1981 saw an exceptionallevel
oftunspecifiedr
inports
by the Conununity from EFTA. Past experience Buggeststhat
such occurrences areoften
explained by movementsof
gold whieh do notappear elsewhere
in
the
tradeetatistics.
One
of
the reasonsfor
the
lowlevel
of
non-manufactured tradeis
certainly
the
fact
that
the agreements between the Coumunity and EFTA do not,in
general, includeagricultural
products.ASg igultgra l_trade_wi
th
EFTAAgricultural
trade
is
a
relatively
uniurportantpart
of
the cormrercebetween
the
two groups.EC imports
of
agricultural
products10.
In
1980' over onehalf of all
Cormrunityinports
of
agricultural
productsfrom EFTA lrea eccounted
for
by wood andcork,
andthis
was areo the nostimportant product group
for all
llember States except Denmark,for
which hidesand skins were
slightly
noresignificant,
and Belgiuut and Luxembourg wherefood products were predominant.
This
latter
product group aleo accounted fora
large
proportionof
the
remaining iurportsof
the other Dlember Statesrn
1981,the
patternof
imports rras broadlysimilar
to
that
of
theprevioue year
with
Greece,in its firet
yearof
Comrunity membership, provingno exception.
$rPo378E
OR.FR.
EC exports
of
agricultural
producte11.
rn
1980, exportg wereat
a
lowerlevel
than imports,giving
EFTA apositive
trade balancein
agricultural producte.
Comrunity exports wereheavily
concentrated on food productswith
the balanceof
ealesfor
eachllember
state
diatributed
amonget the other headingsin
varying, rrays.IdPo378E
OR.FR.
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II.
BARRIERS TO IRADE BEI'IIEEN I'ITE EC AND EFTA COUNTRIES11. Although E["IA and EC Member States together provide
in
theorya
singletrading aree,
sone considerable obstactesto
traderemain.
Of course nany ofthese obstacles apply ae mrch
to
tradewithin
each grouping as between them;such probLems as have arieen are
of
relatively
minor importancefor
economicand
political
relations
between the EC and EFTAin
general.Agriculture
12. Ttre major area
of
tradein
wtrichprotectionist
barrierg
are maintained iein
agricultural products.
Although tradewithin
the EuroPean Cormnunityis
largely
free
of
suchbarriers,
moot EFTA countriee maintain individualpolicies
directed
tolratrdsraising
domestic productionto
e maxinnrm andexclud-ing
importeof
competingproduce.
The Free Trade Agreemente signed by the ECLriEh EFTA countriee do
not
coveragricultural
products excePtfor
certain
pro-cessed products included
in
Protocolsto
the Agreemenro,for
whichin
general,the
fixed Eariffs
have been gradually removedwhile
thevariable levies
aremaintained both
for
EC exports and importsof
the productsin
question.13.
Bilateral
agreements onindividual agricultural
products have beensubsequentty concluded
with
some EFTA countries(e.g.
cheesein
the case ofFinland), but
such concessions as have been made remain on every limited
scale and on an ad hoc basie
rather
than as thereeult
of
negotiations beEweenthe
twoorganizations.
In
general,trade
in
agricultural
products remains ata
lowlevet
andpolicies
for
trade on both sides remainhighly
protectionist.
lar
ilf-bgrrigrg
gn_igdus tr iaI
groduc t s14.
Industrial
producte exportedto
the EC from EFTA countries are admittedduty-free
with
oneexception.
Someresidual
Eariff
quotas remain on paper andpeper producte and when exports
of
these products froma
particular
EFTAcountry exceed
a fixed ceiling
the ECis
entitled untiL
l
January 1984 toreimpose customs
duties. In
1982 suchduties
were imposed on 5 produetsimported from Sweden and one from
Austria.
Noneare
currently
in
forcebecause
the
tariff
guotas are calculated on an annual basis and havenot
yetbeen
filled for
1983.
Ttreprincipal
duties
were aboliehedfron
1 January 1984.A few
eimilar
tariff
errangementa are maintained by EFTA countrieefor
theConmrnityrs exports
but
all of
theseexpire
et
the
endof
thie
year.wPo378E
OR.FR.
Ipn-lafilf_bgrgigrg
15.
A11 EFTA and EC Menrbereare
eignatoriesof
GATT and aPPly thearticlee
ofGATT concerning
quantitative
restraints,
customsvatuation,
dumping andsubsidies.
Ttre Codes negotiated during the Tokyo Roundfurther
limit
thescope
for
erectingor
maintainingbarriers
to
trade,
andespecially
thoseresulting
from etandards, government subsidies and Procurementpolicies.
Tteee Codes have now entered
into
force and regular meetings areheld in
Geneva
to
ensuretheir
ProPer implemeatation by signatories.15. CATT provides the rnain interna,tional forum
for
studyingthe
impact ofgovernment regulations on
trade,
but
the European Conmieeion and the EFTAsecretariat
haveheld
ralks
on such ieeuesat tregional'level.
fiie
recentrequirement imposed by the French Government
that
customa documents be inFrench has been
the
subjectof
anofficial
complaint from EFTA.In
additionthe Conrmission has
held
talks with individual
EFTA members concerninggovernment eubeidies,
in
particular with
Sweden,with
some degreeof
success.Borh rhe Treaty of,
por"
(Article
92) and the Stockholm Convention(Article
13)
refer to
governmentaidsr
but
the ECrules
are muchtighter
both withregard
to
the incompatibility
of
st,ate eubsidieswith
the common market and tothe
systemof
identifying
and sanctioning auchsubsidies.
EFTA members ereonly
invited,
not obliged,
to
report to
other memberstates
the aide providedby them.
17.
It is
obviouethat
recourse Eo governmentaid
for
theprotection
ofdonrestic
induetriee
from Eheconpetitive
pressureof
inpoite
is likely
toincrease
in
a
timeof
recesgion *trentariff
barriere
haveeffectively
beenetiminated.
firis
subject maywell
proveto
be a metterof
increasing concernin
EFTA-ECrelations,
atthoughit
hasnot
yet
seriously
affected comercialrelations
betweenthe
two groupings, except perhapsindirectly
in
the steelsector,
wtrich has been a notoriously voraciousrecipient
of
governmentaid
inmany countries.
Current voluntary
restraint
agreemente, whichlimit
exportsof
eteelproducts between the EC and several EFTA partnera
to
ttraditional
levelst,
have been renewed on terma
rtrich
providefor
considerable cutbeckein
trade in1983, given the
very large
falls in
demandfor
eteel
both on EC and EFTAmarketg.
r{Po378E
OR.FR.
18. AgreementE on
trade
in
industrial
products concluded between the EC andEFTA countries have
hitherto
beenlimited
to
the
steel
sector.
In
addition
toa
general conunitmentto
restrict
quantities to within certain
limits,
EFTAcountries agreed
to
cornplywith
the
guidanceprices
eetabliehedat
intervalefor
the connnunitytg ownsteel
industrybut
with
a
permitted margin ofpenetration
of
3Z below thoseprices.
Forother
crisis
sectors trade betweenthe EC and EFTA continues
without
suchguantitative
restrictions
and notablyin
the
textiles
aector,
wherebilateral
agreements concludedby
the Connmrnityand by EFTA countries under
Article
4
of
theMulti-Fibre
Arrangement arelinited to
rlow-costI
supplying countries and donot
reetrict
trade betweenindustrialized
countries.In
theagriculturel
eector,
however, agreements $hichlirnit
exports ofsheepmeat and goatmeet
to
the EC have been concludedwith
Iceland and Austria.leghgiga!
to
trade19. GATT
is
againthe
principal
forumfor
discussionof
the
trade aspects of technicalbarriers
such esstandarde.
Ite
cormrittee onthis
subject meets 4timee annually and
is
now conductingite third
annual reviewof
theCode.
Ttrenotification
procedureis
apparentty workingwell
and the 35 signatorieeof
the Code are
nol
elaborating proposalsfor
improvingits
implementation.At
world 1evel, standards themselves are harmonizedfor
the mostpart
bythe rnternational
organizationfor
standardization(rso)
and by theInternational
Electrotechnical Comnission(IEC).
Ttredifference
in
competenceof
these two orgenizationsreflects
thedifferent hietorical
developmeng ofharmonization
in
the industries
concerned.the
progress madein
achievingworld-wide acceptance
of
standardeis
however patchy andslow.
rn
someindustries,
such as motorcare,
considerable advances have been made,but
ingeneral agreemente are
difficult
to
achieveat this
level.
20. Ttre tlro correeponding European organizations are CEN and CENELEC (European
Cormnittees
for
Standardization andfor
Electrotechnical Standardization) whichare based
in
Brussele and whoge menbers includeall
EC and EFTA countries(except Iretand and,
in
the
caeeof
CEN, Luxernbourg) and,in
addition,
Spain.Ttese organizations
ain to
harmonizenational
etandards and prepareinternational standards.
Both the EFTAsecretariat
and the EuropeanConmieeion cooperete
closely
with
these organizationa and provide mandates,sometinee
jointly, for
the elaborationof
new European etandarde.r{Po3788
OR.FR.
-19-
PE 822L.
It
ahould be noted howeverthat
many problemsfor
trade wtrich arisebecause
of
conflicting
national
etandardswithin
Europe arenot
brought beforethese organizations
for
varioua reesoos which may include:-
the
prior
exigtenceof
technicat comritteesin
world-wide organizationswhich are already examining the problem;
-
therefusal
of
theother
participeting
countrieeto
establieha
conmitteebecause the problem
is
confinedto a snall
numberof
atates;-
the conclusionof bilateral
deals betweenindividual
countriesto
avoid thedelays inherent
in
armrltinational
procedure.22.
In
generalthe
issueof
standardsis
not
of
great
importancein
thediscussions
of
the Corununitywith
EFTAor its
Member States becauseall
thecountries are represented
in
the European organizations concerned. Howeverone such issue has
recently
appeared wtrich does seemlikely
to
haveconsiderable consequences
for
trade.With regard
to agricultural
productesiuilar
problems canarise.
Swedenhas
recently
bannedthe
importetionof
certain
fruits
and vegetabtes from theEC because
of
the
presenceof
insects
in
some regions wtrichare
forbiddenunder Swedenrs phytosanitary
regulations-23. EFTA
itself ie
very
active
in
promoting the rmrtuat recognition ofstandards
by
ite
MemberStates. In
some EFTA'reciprocal
recogpition schemes'EC Member Statee are already
participating,
including
thosefor
tpressurevessels
t,
tgas applianceot,
tagricultural
machines and tractorsI
(a11of
whichinclude the UK and Denmark),
that
for
tships'equipmentr (erhich includee the NeEherlands the FR Germany aswell),
and,finally,
thet
for
rpharmaceuticalel(which includes
Ireland
aswelt
ae the other EC countriee mentionedbut
notthe Netherlande).
24.
One aspectof
the Conmunityrsfuture
policies
that
ia of
concernto
EtrTAcountries
is
a
proposalfor
a
CouncilDirective
put
forwardby
the Comniesionin
1980 (COM 80/400) which may soon be approved by theCouncil.
The proposedI{Po378E
OR.FR.
-
directive
will
establish a
procedurefor
exchanging inforrnation between ECMember States on the preparation
of
newtechnical
standards, which ehouldassist
in
preventing the emergenceof
newbarriers
to trade.
Currenttyit
isthought
that
about 5000 new standardg are being eetabliehed throughout WesternEurope
annually.
Eachof
theseis
a
potential
non-tariff
barrier.
25. On the other hand, problems have
arisen
in
the trade
in
newsprintwith
theScandinavian countries.
Before
it
accededto
the European Conmunities, the United Kingdon hadconcluded an agreement
with
canadaetipulating
-
and guaranteeing-
theimportation
of
6251000 tonnesof
newsprintof
Canadianorigin into
Ehe UnitedKingdom. The
quantity
imported wasto
increaseto
1r500rooo tonneseventually. British
acceseionto
the ECled to
a revision
of
the
agreement,which had a
very
seriouseffect
on the Canadian economy by suddenly deprivingit of
an importanttraditional
export market.It is
neceoseryto
take Btepsto
redressthis
situation,
in
collaborationwith
Canada and the Scandinavian countries and taking accountof
the
interestsof all
contractingparties.
GATTnight
providea
suitable
forum fornegotiations on
thie
subject.wPo378E
III.
PROBLEI.I OF GOVERN}IEIiIT AIDSIN
INTERNATIONAL TMDE AGREEMENTS26. A
control
of
governmentaids
ig
neceesaryfor
the
preservationof
a
freetrade system, since most
aid
measures heve aneffect
ontreding
conditions.Efforts
to limit
the
grantingof
sEate aids havein
fact
been oneof
the majorpreoccupations
of
international
organizations such as GATT, the Community andEFTA.
In
trying to
eetablish
an appropriate behaviourfor
governmentsin
this
respect,
these organizations havelaid
downcertain
provisions andrules to
befollowed by the member countries.
27.\\e
Treatyof
Ronre€stablishing
the EECcontains,
in
paragraph 1 ofArticle
92,a
generalprohibition
onstate
aids whichdistort or
threaten todistort
conpetition and adveraelyaffect
trade between Member States.Paragraph 2
of
that
Article
contains an exceptionto this
generalrule
withregard
to
aids
of
a social
characEer andaidg
intendedto
renedy damage causedby
natural
calamitiesor
other
extraordinaryevents.
Paragraph3
of
Article
92 allows
for
further
exernptions from the generalrule with
regardto
regionaland
sectoral aids
and anyother
categoriesof
aids
as ruly be specified byDecieion
of
the EC Council.28. According
to
Article
13of
the
Stockholm Conventionestabliehirg
E,
government aids which
frustrate
thebenefits
expected from the removal orabgence
of
duties
andguantitative
restrictions
on trade between the EFTAMember States
are
forbidden.
Ttris applieein
particular
to
export subeidiesspecifically
listed in
Annex Cto
the Stockholn Convention,but
covers alsoany
other
formof
governmentaid. In their
interpretaion
of Article
13of
theConvention, as adopted
in
July
1968, the EFTA Council recognized, on the onehand,
that
governmentaide,
providedthat
they nere conpatiblewith Article
13, were
legitimate
inetrumenteof
economicpolicy
andthet
it
was thereforenot
the purposeof Article
13to prohibit
the
freedosrof
Member Statee tointroduce government
aid
neasures as elementsin
internal
economicpolicies;
on the other hand, the
criterion for
aseessing governmentaids,
namely whether theyfrustrated
thebenefite
expected from the Association, rras oneof
fact.
In
order
to
fruetrate,
a
governmentaid
rmrstinjuriously
affect
thedevelop,ment
of
trade betneen the EFTA MemberStates,
either directly
orindirectly.
liltren judging whetheror
not
anaid
rraefrustrating,
thecurmrlative
effect
of
different
aids
ehould be takeninto
coneideration.[rPo378E
OR.FR.
29. The Free Trade Agreements between Ehe European Eeononic Conmunity and the
EFTA countries declared as incompatible
with
the proper functioningof
theAgreements,
in
sofar
aeit
rnightaffect
trade between the Comrunity and theEFTA countriesr any
public aid
whichdietorted
or
threatenedto dietort
competition
by
favouringcertain
undertakingsor
the
productionof
certaingoode.
With regardto
that
provision
the Cornmunitystated,
when signing theAgreernents,
that
it
wouldinterpret
it
accordingto
the
criteria
applicable tothe corresponding provieions
uithin
the Cormunity.30.
The General Agreement onTarif&
and Trade (GATT),in
conjunctionwith
the Agreement onthe Interpretation
of Articles
VI,
XVI andXXIII (the
SubsiaiesCode) worked
out
in
the contextof
thellultilateral
Trade Negotiations, hasset
upa legal
framework accordingto
which governmentaide,
andin
particular
export eubeidieer EaY be assessed. According
to
theseprovisions,
anyContracting Party
with
a
conplaint concerning the ugeof
government aids maysubmit the matter
for
consultation andexamination.
In
cases where the uee ofexport eubsidies
is
implied,
exampleeof
which are givenin
the Annexto
the GATT Code, aninjury
would be presumedto
exiet.
31.
Thisbrief,
and therefore imprecisedescription,
indicates
that
the provisions concerning governnentaide,
although theydiffer in
wording andstructure,
can besaid
to
be based onthe
same,or
at
leaet very eimilar,
principles.
Ttrey appearaltogether
to
besufficiently
clear
and,at
the
sametime,
flexible
enoughto
allow
for
aneffective control
of
governmentaids
ingeneral.
Wtrat therefore mattersie
not
to
tighten
the marginof
judgment orto
sharpenthe
legal
frameworkfor
governmentaide, but
rather to arrive
at
aproper implementation
of
theexisting
rules.[lPo378E
oR.tr'R.
IV.
I.IODIFICATION OF GREENI,.AIDIS STATSSOn the basis
of
a
proposal byl{r
Richard Burke, the Cormnissionerspecifically
reeponsibtefor
thie
natter,
the Conmiseion has decided on astance Eo be adopted by the Corununity
in its
future relations with
Greenland.Ihe
Conunission niehesto
maintain cloeelinks
between Greenland and theConrmunity and
is
endeavouringto
take accountof
the
interests
of
those nostconcerned by
relations
betweenthe
twg.In
1973, wtren the Kingdomof
Denmarkjoined the
Corununity, Greenland wasan
integral part
of
the former.
Six
yearslater,
pursuantto
the Danish homerule legislation
of
1 Hay 1979 adopted by referendumin
Greenland' theGreenlandere obtained
a certain
degreeof
independence.In a
eubsequentreferendum, hetd on 23 February L982, the
majority
of
Greenlanders (522) votedagainst Greentandts membership
of
the European Comuunity. Consequently,in
amemorandum addressed
to
the Councilof
Minietersof
19 May L982, the DanishGovernment proposed
a revision
of
the EC TreaEiesproviding
for
Greenlandrswithdrawal.
According
to
theTreaties,
the Comniesionis
requiredto
draft
an opinionon
this
proposal. I{trile regretting that
the proposal concerns the withdrawalof
Greenland fromthe
Corununity, the Comriesion nevertheless decidedin its
conrmunication
to
the Councilto deliver a
favourable opinion on the change ofsteEuo
of
Greenlandvis-l-vis
the Courntrnity. The Cormniseion takes thefollowing view concerning
this
new relationehip:Trade
in
induetrial
producteAs regardg
trade
in
induetrial
products between the Conuntrnity andGreenland,
the
CCTwill
no longer be applicableto
Greenland and arrangementsbased on
a free
trade areaare
thereforenecessary.
firis
would grantpreferential
treatmentto
all
productsorigineting
in
Greenland, ensuring thernfree
accessto
the Conrmunity marketwithout
anyquantitative
restrictions,
customs
duties
or
equivalefltlevies.
Hence they would be subjectto rules
oforigin
excludingindustrial
products fromthird
countriesfron
preferential
treetment on
inport
into
the Conrnunity through Greenland. firey would also besubject t,o Comnunity safeguard measures againet
distortion
of
the Cormunity marketwPo378E
OR.FR.
rlG
resulting
fromdeflection
of
trade causedby
the considerable differences inexternal
tariffs or
the
tradepolicy
applied Eo raw materials orsemi-manufactured products used
in
Greenland, and preventing any majordisruption
of
the Conrnunity market which couldresult
fromthe
implementationof this
sysEem. The arrangemenE would ensure preferenEial treatmentfor
Conununity
industrial
product,s,giving
themfree
access Eo Greenland, whileGreenland would be enEitled
to
introduce custornsduties
and quantitativeimport
restricEions
for
Conmunity productsif
they helpedits
development andindustrialization or
budgetary earnings; however, these measures would notlead Eo
discrimination
against llember States.Trade
in
agricultural
produccsTrade
in
agriculturdl
products (products containedin
AnnexII of
the EECTreaty).
Such trade should be based on theprinciple of
more favourabletreatnenE than
that
granted by the Conununity and Greenlandto third
countries(irnplementing provisions would
specify
the wayin
whichthis
principle
shouldbe applied).
Free movemenE
With regard
to
the free
movementof
persons (movemenEof
workers andright
of
establishmenE),
services andcapital,
the new system would require equalEreatment on
the
terriEory of
Greenlandfor all
Conmunity l'lember SEatenationals and
for all
legal
persons subjectto
national
legislation
of
one ofthe llember SEates;
it
wouldalso
providefor
thepossibility of
introducingsubsequent iurplementing provisions
for
greater
freedomof
movementof
persons,services and
capital
between Greenland and the Corununity. These provisionswould doubtless
help
to
faciliuate
cooperationin
the
field of
industrial
andagricultural
research and development andother
formsof
cooperation betweenthe Corununity and Greenland
in
certain
areas accepted by both sides.Fis herie s
Fishery producEs: the nerr system
will
providefor
obligatory
measures tobe t,aken by Greenland and the Corununity
to
ensurethe
opEirnal devetopment ofthe
activities
of
Greenlandrs fishing
fleet
togetherwith
its
dependentprocessing and rnarketing sectors and
the protection
of
the Couununityrsfishing
interegts
in
Greenland waters.t.lPo378E
OR.FR.
For
this
purpose,the
sysEem would securefull liberalization for
fisheryproducts,includingProcessedproducts,imporEedbytheCorrrrunityfrom
Greenland and
originating there'
Free access andfree
movementof
theseproducts would be subject t,o
the
provisions governing the conmon organizaEionof
the marketin particular the
safeguard clauses'ThissysEemwouldalsoprovidefortheallocationofquotastothe
Conununity
in
Greenland wat.ers, which,uhile taking
eccountof
Greenlendrsneeds
referred
t,o above, would be designedto
maintainthe traditional fishing
activities of
Ehe MemberStatesr fleets.
These quotas andthe
conditions offishing
would haveto
be agreed between Ehe Cornmunity and the competentauthorities for
Greenland beforethe entry into force of
theprotocol to
beadopEed.
Concerning
the sPecific
questionof
salmon'the current
guaranEeesapplying
to rhis
branchof fishing in
Greenlandwill expire at
the endof
1983and
are
Eo be replaced by appropriate conservaEion measuresfor
salmonmigrating between Greenland and Corununity waEers'
HPO378E
OR.FR.
tin-ANMX 1
TENTH ANNIVERSARY OF IIIE FREE-TRADE AGREE}iENTS
ExEract frora Ehe declaration
of
the EHIA Councilsat
minieteriaL
level-On the occasion
of
the
Eenth anniversaryof
the
conclusionof
the FreeTrade AgreemenEs
(ftns)
wittr
Ehe European Comrunities, the EFTA government,semphasize
their
great
and continuing importance. These Agreements haveconstituted
a
challengeto
the economies involved, have provedto
be viableinsEruments even
in
a periodof
economicdifficulties
and increasingprotectionist
tendencies and have provided an exampleof
awell
functioningfree
t,radearee.
Their
smooth operation has contributedto
a harmoniousrelationship
between the EFTA countries and the Corununity andto
the
creationof a
free
marketof
more than 300million people.
They have thus enabled asubstantial expansion
of
trade and production on the basisof
a
sEable tradingsysEem
in
tlestern Europeto
takeplace.
The Europeanfree
trade
system,comprising 17
countries
and 422of total
worldtrade,
providesa logical
andclose
link of
a
speciatquality
betweenthe
two groupings, which are eachotherrs most important
trading
pert,ner.
Supportingall initiatives
taken toreinforce
and extend the Europeanfree
trade'system, che EFTA g,overnmentsregard
with
sympathy and understanding the enlargementof
the
ConununiEy which,inter alia
dueto
the
FTAs,will
represent apositive
stepfor
the further
consolidation
of
economic and cradingrelations
in
Western Europe.The EFTA governments
ere
fu1ly
convincedthat
substantial
advantagesincluding greater economic
stability
and improvedliving
standards haveaccrued
to
Ehe countriesparticipating
in
the Europeanfree-trade
system. AEEhe same time
their
other trading
partners havealso
benefitced from thedynamic
effects resulting
fromthat free
trade.
The EFIA GovernmentsEhere-fore
considerthat
the maintenance and improvementof
that
sysEem and Ehesafeguarding
of
open markeEsfree
from anykind
of
discrimination arecrucial
to
the endeavoursto
overcome Ehe presentinternational
economicdifficulties.
In this
conEext, the EFTA countriesreaffirur
their
conmitmentto
the
liberal
trading
system as Laid downin
GATT, and Eheir preparednessto
act
in
inEernational organizations, wiEh
a
viewto
fighting protectionist
tendencieswherever they appear.
The
last
ten years have broughE about an ever increasing interdependenceand
a
corununiEyof
interest
between thenational
economiesof
the
17 StatesParticipating
in
the
Europeanfree
tradesystem.
EFTA Governments areconvinced
that
this will facilitate
meetingfuture
challenges-
also
in
aglobal
context.r{P0378E
OR.FR.
lltin-Extract
from the Eent,h anniversarystatement by the Council of
of
the
Free Trade AgreementsEhe EFTA countries
ANND( 2
20
July
1982to
mark theconcluded by the EEC r^,ith
On Ehe occasion
ot the
tenEh anniversaryof the
signingof
the Free TradeAgreements between
the
CorununiEy and the EFTAstates,
the Council would stressthe
very special
iuportance the Cosrnunity attachesto its relations with
eachof
the EFTA nembercountries,
which are amongits principal trading
partners. The Treatiesestablishing
Ehe Corununities and the Conventionof
SEockholmestablishing EFTA, together
with the
agreements concluded between the Community andthe
EE"TAcountries,
haveit
possibleto
creat,ea
stable andreliable
monetery andtrading area,
the exisEenceof
whichis a a
preciousasset
parEicularly at this
timeof
profound changesin
the world economy.It
is in
t.his areathat the
countriesof
the Conununity and EFTA conduct almostEwo-thirds
of their trade....
In this
regard,the
Councilis gratified, first
and foremost,at
Eheexce1lenE way t,he Free Trade Agreenents
linking
the Conununityto
Ehe EFTAcount,ries have functioned o\rer
the
last
ten years.Referring moreover
to the
sEatement made by the Headsof
State andGovernments
of
Ehe EFTAcountries in
llay 1977 and Ehe guidelines Ehe Councilitself
approvedin
June 1978, the Council once rnore expresses the Cormnunity'sint,erest
in
improvingthe
funcEioningof
these agreements and extending Eheirscope
in all
areas where Ehisis
shownto
beuseful. It also confirns
theparticular
importanceit
attachesto
developingwith
the EFTA countriescooperation
additional to
Ehe Free Trade Agreement,s, andthe
readinessof
theCouununity
to
undertake such cooperationin
the mutual int,erestof the
partiesconcerned.
Thefact that
the Community and the EFTA countries areeconomically and cotrmercially dependent on one another makes closer
cooperaEion
in
nunerousfields all
the uoredesirable,
and a greet, deal ofprogress has been made here over
the last
fewyears....
r{Po3788
OR.FR.
ANNEX 3
List of
areasin
which the conrmission coneidersthat
etronger measures are both desirableand feasible.
l'
rmprovingthe
functioningof
the
joint
conrmittees on the FreeTrade Agreements
2.
Rulesof
origin:r3,
lleasures takenat
frontiers
4.
Tradein
agricultural
products*5.
Proceesedagricultural
producte*6.
Fieheries7.
Technicalbarriere
to
tr€de*8.
Reetrictions on exports9.
Cornmunity trade markrr10. Conrmunity patent*
11. Pubtic contracts*
12. State aids*
13. Courpetition
rules
applicableto
undertakings14.
Induetrial
policy15. Research and Development Cooperation
16.
Trans-frontier
exchangeof
inforrnation17. Environment*
18. Consumer protection
19. Health and eafety conditions
at
the work place20.
Traneport*21.
Economic and monetary policy*22. International
economic relations23. Development cooperation
24'
cooperationin
international
organizationsof
an econo,ic nature25.
Information(*)
The subjects asterisked have already appeared on thecouncilrs
liet
ofL4 December 1978
I.,Po378E
ANNEX 4
ilOTION FOR A
RESOLUTI0N
5OCUTT1ENT 1-9Z4tB?tabled
by Miss HooPERpursuant
to
Ru[e 47of
the
Rulesof
Procedureon
the externaI trade
effects
of
the
SwedishdevaLuation
of
0ctober 1982,n"
guror""nr".tr.r"na,
A.
having regardto
the EEC-EFTA free-trade agreement,B.
having regardto
the decisionof
thenerty
etected Syedish Governmentto
devatue the Krona by sixteen percent oh E october 19E2,C.
having regardto
the
LegaIaction
taunched by the European Comnission ayear ago against an a[leged
price-fixing
carteI
operated by Nordic paperand putp producers,
D.
hav'ing regardto
the exercise by the Commissionfor
thefirst
timeof its
povers
of
detegated[egistation
under Council. Regul.ation (EEC) No. 373E/E1of
December 1981,t.
Supports the Commission's decisionof
8
November 19EZto
reinstate
externaltariffs
onfive
gradesof
papercurrent[y
exported by Sredenin
votumes exceedingceitings
estabtished underthe
EEC-EFTA free-trade agreement;2.
Catts upon the Commission:a)
to
exptainto
the European Partiamentthe
reasons[ying
behindits
decisionto
reinstate theseduties,
andto
pubtishits
broad assessmentof
the
LikeLyecononic impact
of
these measuresin their
Iimited
periodof
appIicabitity
from 13 November
to
31 December 1982,b) to
indicate
yhetherit
proposesto
reintroduce these measuresin
19E3, anduhether
it is
consideringatternative
coursesof
action
in
the perioduntiI
next year's pre-estabLished
ceitings
in
the paper sector are exceeded,c)
to
outLinein detait
its
overatl
analysisof
the
recent Suedish and Finnishdevatuations
(of
respectiveLy sixteen and ten percent), expta'in thediffer-ence
in
treatmentrhich
it
has accordedto
thetuo,
and indicate trhatpro-portion
of
eachit
considers "predato?y",in
the
senseof
being deLiberatetydesigned
to
enhance export performancerather
thanreftect
undertyingcurrency vatues on internationat markets,
d) to ctarify its
more generalattitude
to
the
restjtution
of
import dutiesagainst EFTA
(or
other non-EEC) countries engagingin
"predatory" devatuationsof their
currencies,e)
to
ctarify its
tonger-termattitude
to
the useof tariff
barriers
as amechanism
to
counteract the deLeteriouseffects
of
deLiberate downward actjustmentsin
the vaLueof
non-EEC countriesrcurrenc'i es,t)
to
asscss thGpotentiaI effects
of
rastituting
import duties automaticattyon EFTA
(or
other non-EEC) countries yhose exports exceed pre-determinedccitings
(as they docurrent[y
for
exanptein
paperfror
Austria and ftn[and,as
rclt
as Sveden)i3.
tnvites thc
Gornmissionto
investigatcvith
the Partiament approp?i.tc ncans byrhich
thGlattcr
night
scrutinise
and comncnt upon actions suchts
this
takcnby tha Coornission under
its
ovn tcaatauthority.
ANNEX 5
MOTION FOR A
RESOLUTION
DOCUMENT 1-709183tabted by Tove NIELSEN
pursuant
to
Rute 47of
the
Rutesof
Procedureon
relations
with
the Nordic countriesThe Eurooean Partiament.
A.
having regardto
Doc. 1E1177 andits
resotution
of
5.7.19?71,8.
having regardto
the
CounciIrsdeclaration
of
ZO.fufy.l9EA on.thGoccasion
of
the tenth
anniversaryol
the
signing
of
the
frce
tradeagreements betueen
the
EC and EFTA,C.
having regardto
its
reso[ution
of
11 february 1983 onthc free
tradaagreenents betveen
the
EC and EFTA,0.
detighted
at
the
increasingty
frequent and ctose contacts betyeenItlenbers
of
Partiament f romthe
Nordiccountrics
andthe
EuropeanPar t i ament,
E.
noting
nith
satisfaction the
significance vhich
boththe
Councit and theCommission
attach
to
devetoping cooperationyith
the
Nordic countriesover and above
the
frcc
tradc
accords,1.
CaLts onthe
Comnission asa
matterof
yrgencyto
endeavourto
securethe
removaIof
the
renaining obstactesto
trade, particutarty
thoseof
anon-tariff
character,
rhich
have unfortunateLy appearedrith
greaterfrequency
in
the
tast
coupteof
years;?.
CaLts onthc
Councitto
take
a
favourablevier
of
the
Nordic countriesfdesire
for
increased cooperationin
spheres suchas industriaL policyr
research,
poticy
touardsthe
dcvetoping countrieg and economic andnonetary
poticy;
3.
Expressesits futt
supportfor
the vork
being doncby the
del,egationfor
retations
rith
the
Nordic countries;4.
Requeststha
relevant
committeeof
ParLiamentto
drar
upa report
on thcresutts
of
ten
yearsof
cooperationvith
the
Nordiccountries
of
Sreden,Norray,
Icetand anci Fintand and onthe
prospectsfor thr
future
and ptansfor
the next ten
yearsi5.
Instructs
its
Presidentto
foryard
this
resotution
to
the
Councit and theCommission,
the
Foreign 14inisters meetingin
potiticat
cooperation andthe
Partiamentsof
the
Nordic countries.10,
No.c
r83, 1.8.19rr,
p.
3o