FOREIGN AGRICULTURAL SERVICE
TARIFF RATE QUOTAS (TRQs)
A tariff-rate quota is used to import fixed quantities of a product at a lower tariff. Once the quota is filled, a higher tariff is applied on additional imports. The vast majority of tariff quotas in agriculture result from the Uruguay Round negotiations and constitute binding commitments as opposed to autonomous TRQs which WTO members may establish at any time. However, many countries have been granted import concessions within the scope of bilateral, regional and preferential trade agreements such as the Lome Convention or the Generalized System of Preferences (GSP). Import concessions may involve tariff preferences within TRQs and/or tariff preferences with no quantitative restriction. EU preferential duty rates for specific products can be found in the European Commission’s online customs database.
On May 1, 2004, the EU expanded from 15 to 25 member states. Under GATT rules, WTO trading partners must be compensated when a customs union is formed or expanded. In March 2006, the U.S. and the EU signed a bilateral enlargement compensation agreement to offset tariff increases that the EU implemented as a result of the expansion with 10 new member states. As part of the agreement, implemented by Council Decision 711/2006, tariffs on fish (hake, Alaska Pollack, surimi) have been permanently reduced, country-specific TRQs have been opened for U.S. exports of boneless ham, poultry and corn gluten meal and existing global TRQs have been expanded for beef, poultry, pork, rice, barley, wheat, maize, sugar, fructose, preserved fruits, fruit juices, pasta, chocolate, food preparations, pet food, live bovine animals and sheep and various cheeses and vegetables. For exports under a U.S. specific TRQ, a certificate of origin must be supplied.
Detailed rules on the opening and
administration of specific TRQs are published in the EU’s Official Journal.
Each TRQ has a 6-digit order number to identify specific conditions such as
quantity, start/end date in the relevant legislation. The EU allocates TRQs
to importers using import licenses issued by the member states’ national
authorities. Only companies established in the EU may apply for an import
license. Community rules on the administration of TRQs are set out in
PREFERENTIAL TRADE AGREEMENTS
Generalized System of Preferences - The EU Generalized System of Preferences (GSP) is a system of preferential trading arrangements with 178 developing countries. These countries benefit from either duty-free access or a tariff reduction on their exports to the EU.
new GSP came into force on January
1, 2006 and will remain unchanged until the end of 2008. There are three
Everything But Arms initiative
- In February
2001, the Council adopted the so-called "EBA (Everything But Arms)
Regulation,” granting duty-free access to imports of all products from
least developed countries without any quantitative restrictions, except to
arms and munitions. At present, 49 developing countries belong to the
category of LDCs. The provisions of the EBA Regulation have been
incorporated into the GSP Regulation (Annex
I Council Regulation 980/2005),
although the special arrangements are expected to be maintained for an
unlimited period of time.
Imports of fresh
bananas, rice and sugar were not fully liberalized immediately.
Duties on those products will be gradually reduced until duty free access
will be granted for sugar in July 2009 and for rice in September 2009.
Bananas were liberalized in January 2006. In the meantime, there
will be duty free tariff quotas for rice and sugar (see the latest
regulations for sugar quotas No
and rice quotas
in the legislation list).
Turkey - A Customs Union (in force since 1996), excluding agriculture (except processed agricultural products), services and public procurement was established by an Association Agreement which Turkey signed with the EU in 1963. The Customs Union provides that Turkey and the EU should progressively improve the preferential arrangements for agricultural products (Decision No 1/98, amended by Decision No 2/06). As a member of the Euro-Mediterranean partnership, Turkey is expected to conclude free trade agreements with all other Mediterranean partners by 2010. At the Helsinki summit in December 1999, Turkey was given the status of a EU candidate country, with negotiations starting in October 2005.
Faeroe Islands - The Agreement between the EC and the Government of Denmark and the Home Government of the FO entered into force on 1 January 1997. Pointing out the essential role of Fisheries in the Faeroese economy, it also acknowledges the importance of agricultural trade.
Ceuta and Melilla - Ceuta and Melilla are not included in the EU Customs territory. However, the two cities benefit from an autonomous preferential agreement with the EC allowing products originating in Ceuta and Melilla to benefiting from most of the cumulation systems signed by the EC with third countries.
European Economic Area (EEA) and Switzerland - The European Economic Area (EEA) entered into force in 1994. The EEA unites from May 1, 2004 the 25 EU Member States and the three EFTA states (Iceland, Liechtenstein, and Norway) into an Internal Market governed by the same basic rules. Switzerland in a referendum voted to stay out of the EEA. Agriculture is not a part of the EEA Agreement, with the exception of veterinary and phytosanitary measures. However, customs duties for processed agricultural products (Protocol 3) and the trade concerning basic agricultural products are included in the agreement. Trade in fish and fish products are mainly regulated through Protocol 9 in addition to bilateral agreements. After its decision to reject the EEA agreement, Switzerland initiated negotiations for agreements with the EC in seven sectors (Free Movement of Persons, Trade in Agricultural Products, Public Procurement, Conformity Assessments, Air Transport, Transport by Road and Rail, Swiss Participation in the 5th Framework Program for Research). The agreements entered into force on June 1, 2002.
Barcelona Process started in 1995, and
consists of a wide framework of political, economic and social relations
between the EU Member States, Partners of the Southern Mediterranean, and
among Southern Mediterranean countries themselves. This process includes
the establishment of a Free Trade Area planned by 2010.
The Euro-Mediterranean Partnership comprises 35 members: 25 EU Member
States and 10 Mediterranean Partners (Algeria,
Morocco, Palestinian Authority,
Turkey). Libya has observer
status since 1999. The Euro-Mediterranean Association Agreements
gradually implemented through bilateral free trade are the first step for
establishing the Free Trade Area.
The Cotonou Agreement and certain overseas countries and territories - The ACP-EU Partnership Agreement was signed in Cotonou on 23 June 2000 and will remain in force for 20 years; it replaces the former Lomé Convention. At the same time, the remaining overseas countries and territories (OCTs) continue to be associated with the Community through successive Association decisions of the Council. At present, 78 ACP countries are signatories to the Cotonou Agreement: 48 African states, 15 states in the Caribbean and 15 states in the Pacific. South Africa is a signatory to the Cotonou Agreement but its membership of the ACP Group is qualified (Protocol 3). The provisions of the bilateral Agreement on Trade, Development and Cooperation between the European Community, its Member States and South Africa signed in Pretoria on 11 October 1999, take precedence over the provisions of the Cotonou Agreement. Agricultural preferences include fisheries, processed fruits and vegetables, corn, beef, rice, onions, tomatoes, strawberries, citrus, tobacco and bananas. The EU has requested a WTO waiver for the continuation of the ACP tariff preferences until the end of 2007. The EU intends to replace the current unilateral preferences with new Economic Partnership Agreements by January 2008.
South Africa - The EU-South Africa FTA was signed on October 11, 1999. Its trade chapter provides for a gradual establishment of an FTA: the EU has 10 years to abolish all restrictions on 95% of South African exports and South Africa has 12 years to exempt 86% of the EU’s exports. The 5% exclusion on the EU side is all agriculture, including traded and sensitive products (fruits and vegetables) and non-trade but potentially sensitive products (sugar, beef, etc.). The Wines and Spirits Agreement under the FTA was adopted in January 2002.
Mexico - Mexico and the EU FTA entered into force on July 1, 2000. Trade liberalization was established by Decision 2/2000, setting up transition periods in the annexes. Agricultural products will only be liberalized by 2010: 80% of EU imports and 42% of Mexico's imports and for fisheries products, 100% of EU imports and 89% of Mexico's imports. The agreement provides access for Mexican fruit and orchard products including avocado, tomato, limes, grapefruit, coffee, chickpeas, mango, guayaba, beer and tequila. Tariff quotas for certain agricultural products, such as cut flowers and fruit juices, as well as review clauses for further liberalization are included in the agreement. The Decision contains provisions for co-operation in the field of customs, standards and technical regulations, Sanitary and Phytosanitary (SPS) measures, and for the opening of public procurement markets. In 1997, the EU and Mexico signed an agreement providing mutual recognition and protection of designations for spirit drinks.
Chile - The EU and Chile signed an Association Agreement in November 2002, and it is in force since 1 March 2005. The Association Agreement covers the main aspects of EU-Chile relations, i.e. political and trade relations and co-operation. The trade chapter covers a progressive liberalizations of trade in goods over a maximum transitional period of 10 years reaching a full liberalization of 100% bilateral industrial trade, 80.9% of agricultural trade and 90.8% of fisheries trade. It includes rules to facilitate trade in wines and spirits, trade in animals and animal products, plants, plant products, and it also comprises provisions in customs and related procedures, standards, technical regulations and conformity assessment procedures.
Mercosur - Since 1995 the EU and Mercosur have been discussing and negotiating an Interregional Association Agreement between the EU and Mercosur, which would include a liberalization of trade in goods and services, aiming at free trade, in conformity with WTO rules. The negotiations had been delayed pending the results of the Doha WTO negotiation round.
Pan-Euro-Mediterranean cumulation of origin - The “Pan-Euro-Mediterranean cumulation of origin” initiative was launched by the Euromed Trade Ministers aiming to reinvigorate trade and economic cooperation among Barcelona partners and other European Countries. A "pan-Euro-Mediterranean" protocol on rules of origin, based on a preferential agreement network, was developed in 2003 and it is replacing the former protocols on rules of origin. The system is operated between the Community, the Member States of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland), Bulgaria, Romania and Turkey.
European Neighborhood Policy - The European Neighborhood Policy (ENP) was developed in the context of the EU’s 2004 enlargement, looking for a deeper economic and political, cultural and security cooperation - strengthening stability, security and well-being for all concerned.
Originally, the ENP was intended for the immediate neighbors – Algeria, Belarus, Egypt, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, the Palestinian Authority, Syria, Tunisia and Ukraine. In 2004, it was extended to states with which the candidate countries share a border (Armenia, Azerbaijan and Georgia). Although Russia is also a neighbor of the EU, the relations are instead developed through a Strategic Partnership. The process starts with a Country Report prepared by the Commission assessing the political and economic situation. The next stage is the development of ENP Action Plans with each country, setting out an agenda of political and economic reforms with short and medium-term priorities. Implementation is supported, through various forms of EC-funded financial and technical assistance and the progress is monitored through periodic reports on progress and on areas requiring further progress.