The European Parliament adopted by 590 votes to 41, with 35 abstentions, a legislative resolution on the draft Council decision on the conclusion of the Agreement, on behalf of the European Parliament, of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of Croatia in the course of its accession to the European Union.

The European Parliament gave its consent to the conclusion of the agreement.

Parliament stated that China has the right to have its previous trading rights restored, following its slight erosion due to the enlargement of the EU customs union with Croatian EU accession.

This agreement responds to the need to: (i) increase tariff rate quotas, and (ii) lower the current bound tariff rates as the instruments of compensation for Chinese products involved as the way of compensating losses.

The Committee on International Trade adopted the report by Iuliu WINKLER (EPP, RO) on the draft Council decision on the conclusion of the Agreement in the form of an Exchange of Letters between the European Union and the People's Republic of China pursuant to Article XXIV: 6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of Croatia in the course of its accession to the European Union.

The committee recommended the European Parliament to give its consent to the conclusion of the Agreement.

Members stated that China has the right to have its previous trading rights restored, following its slight erosion due to the enlargement of the EU customs union with Croatian EU accession.

Article XXIV: 4 GATT rightly underlines that the purpose of a customs union or of a free trade area should be to facilitate trade between the constituent territories and not to raise barriers to the trade of other contracting parties with such territories. This compensatory Agreement can therefore be seen as yet another sign of the EU’s attachment to the multilateral rules-based trading regime, with the WTO at its centre.

The Commission has rightly chosen (1) the increase of tariff rate quotas, and (2) lowering the current bound tariff rates as the instruments of compensation for Chinese products involved as the way of compensating losses.

This is why the committee called for the consent of the proposal to conclude the Agreement, as the Agreement includes proportionate modifications to the concessions and is consistent with earlier practice and WTO framework.

PURPOSE: to conclude the Agreement in the form of an Exchange of Letters between the European Union and China pursuant to the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union.

PROPOSED ACT: Council Decision.

ROLE OF THE EUROPEAN PARLIAMENT: Council may adopt the act only if Parliament has given its consent to the act. 

BACKGROUND: on 15 July 2013, the Council authorised the Commission to open negotiations with certain other Members of the World Trade Organization under Article XXIV:6 of the General Agreement on Tariffs and Trade (GATT) 1994, in the course of the accession to the European Union of Croatia.

Those negotiations have been concluded and an Agreement in the form of an Exchange of Letters between the European Union and China pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of Croatia in the course of its accession to the European Union was initialled on 7 October 2015.

The Agreement should now be approved.

CONTENT: the draft Decision seeks the approval, on behalf of the Union, of the Agreement in the form of an Exchange of Letters between the European Union and China pursuant to Article XXIV:6 and Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of the Republic of Croatia in the course of its accession to the European Union, is hereby approved on behalf of the Union.

For further details regarding the content of the Agreement in the form of an Exchange of Letters, please refer to the summary of the Commission’s initial legislative proposal from 16.12.2015.

PURPOSE: to conclude an Agreement in the form of an Exchange of Letters between the European Union and China pursuant to the General Agreement on Tariffs and Trade (GATT) 1994 relating to the modification of concessions in the schedule of Croatia in the course of its accession to the European Union.

PROPOSED ACT: Council Decision.

ROLE OF THE EUROPEAN PARLIAMENT: the Council may adopt the act only if Parliament has given its consent to the act.

BACKGROUND: with the accession of Croatia, the European Union enlarged its customs union. Consequently, it was required under World Trade Organisation (WTO) rules (Article XXIV:6 of the GATT 1994) to enter into negotiations with WTO Members having negotiating rights related to the tariff schedule of Croatia in order to eventually agree on a compensatory adjustment.

On 15 July 2013, the Council authorised the Commission to open negotiations under Article

XXIV:6 of the GATT 1994. The Commission has negotiated with the Members of the WTO holding negotiating rights, the issue of the withdrawal of specific concessions in relation to the withdrawal of the schedule of Croatia in the course of its accession to the EU.

Negotiations with China resulted in a draft Agreement in the form of an Exchange of Letters that was initialled on 7 October 2015 in Brussels. It is now appropriate to conclude the Agreement.

CONTENT: the proposal requires the Council to adopt a decision to conclude the Agreement in the form of an Exchange of Letters with China. In parallel, a separate proposal on the signature of the Agreement is also submitted.

Negotiations with China resulted in an Agreement containing the following points:

• an increase of the volumes of the existing quotas allocated to China for garlic (increased by 2 150 tonnes) and mushrooms (increased by 650 tonnes, net weight);
• a EU tariff reduction of -0.1% for footwear classified in tariff line 6404 19 90 (lowering the current bound EU duty of 17 % to 16.9%);
• a EU tariff reduction of -0.2% for air conditioning machines classified in tariff line 8415 10 90 (lowering the current bound EU duty of 2.7 % to 2.5%).

It is envisaged that these measures will become effective by the second half of 2016.