on the proposal for a regulation of the European Parliament and of the Council implementing the anti-circumvention mechanism providing for the temporary suspension of tariff preferences of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Georgia, of the other part

(COM(2015)0155 – C8‑0091/2015 – 2015/0080(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–  having regard to the Commission proposal to Parliament and the Council (COM(2015)0155),

–  having regard to Article 294(2) and Article 207(2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C8‑0091/2015),

–  having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–  having regard to Rule 59 of its Rules of Procedure,

–  having regard to the report of the Committee on International Trade and the opinion of the Committee on Agriculture and Rural Development (A8-0365/2015),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment    1 Proposal for a regulation Article 3 – paragraph 1 a (new) Text proposed by the Commission Amendment   1a. The report shall, inter alia, include information about the application of the anti-circumvention mechanism.

EXPLANATORY STATEMENT

The EU-Georgia Association Agreement includes a so-called anti-circumvention mechanism, which provides for the possibility of reintroducing the 'most favoured nation' customs duty rate when imports of certain agricultural goods from Georgia exceed a given threshold without due justification of their exact origin. A regulation of the European Parliament and of the Council is necessary to put in place in the EU’s internal legislation the necessary instrument to be able to apply the anti-circumvention mechanism.

An average annual import volume is set for imports of the products listed in Annex II-C to the Agreement, which are subject to the anti-circumvention mechanism set out in Article 27 of the Agreement. On duly justified imperative grounds of urgency relating to the import volume of one or more categories of products that reach the volume indicated in Annex II-C to the Agreement in any given year starting on 1 January, and unless it has received a sound justification from Georgia, the Commission shall adopt an immediately applicable implementing act in accordance with the procedure referred to in the proposed Regulation. The Commission may either decide to temporarily suspend the preferential duty applied to the product(s) concerned or that such suspension is not appropriate. The temporary suspension of the preferential duty shall be applicable for a maximum period of six months from the date of publication of the decision to suspend the preferential duty.

The rapporteur points out that the proposed regulation puts into practice the respective provisions of the EU-Georgia Association Agreement to which the European Parliament gave its consent on 18 December 2014. The adoption of the proposed regulation is necessary to enforce the obligations of Georgia stemming from the anti-circumvention provisions of the Agreement in order to protect the EU producers if necessary.

The rapporteur also welcomes the reporting obligation of the Commission set out in the proposal, according to which the Commission shall submit to the co-legislators and subsequently make public an annual report on the application and implementation of the regulation. The European Parliament may invite the Commission to an ad hoc meeting of its competent committee to present and explain any issue related to the implementation of the regulation. The rapporteur is of the opinion that such reporting will contribute to parliamentary scrutiny of the implementation of common commercial policy by the Commission and also to greater transparency thereof.

The proposed amendment to the Commission proposal aims at harmonising the wording of the Regulation with that of the EU-Georgia Association Agreement. It spells-out the reporting obligation of the Commission in more detail, so as to expressly mention the application of the anti-circumvention mechanism.

The amendment is of technical and clarifying nature and should not prevent a swift conclusion of the legislative procedure.

14.10.2015

OPINION of the Committee on Agriculture and Rural Development

for the Committee on International Trade

on the proposal for a regulation of the European Parliament and of the Council implementing the anti-circumvention mechanism providing for the temporary suspension of tariff preferences of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Georgia, of the other part

(COM(2015)0155 – C8‑0091/2015 – 2015/0080(COD))

Rapporteur: Momchil Nekov

SHORT JUSTIFICATION

The Association Agreement between the European Union (EU) and Georgia (‘the Agreement’) was signed on 27 June 2014, received the consent of the European Parliament on 18 December 2014 and has been provisionally applied from 1 September 2014.

The Agreement introduces an ambitious preferential trade regime between both parties, known as the Deep and Comprehensive Free Trade Area (DCFTA). It was negotiated following the same approach as in the negotiations undertaken simultaneously with other countries of the region, such as Moldova and Armenia (the latter gave up the idea of signing such an agreement with the EU, instead signing a trade agreement with Russia).

The EU is currently Georgia's main trading partner. At present, 27,2 % of its trade takes place with the EU (with neighbouring Turkey and Azerbaijan coming 2nd and 3rd, respectively). On the other hand, trade with Georgia accounts for 0,1 % of the EU's total trade, with a total value of EUR 2,6 billion in 2014. In terms of agricultural products, the main products imported into the EU from Georgia consist of fresh or dried hazelnuts, mineral waters and wine. The EU mainly exports to Georgia processed agriculture products (such as spirits and food preparations) as well as dairy products.

The table below contains statistical data on EU agricultural imports from Georgia in 2009-2014.

The Agreement includes in Article 27 a so-called 'anti-circumvention mechanism', which provides for the possibility to reintroduce the MFN (most-favoured-nation) customs duty rate when imports of certain agricultural products and processed agricultural products originating in Georgia (listed in Annex II-C ) exceed a given threshold (average annual volume of imports) without due justification of their exact origin.

Annex II-C of the Agreement lists specified goods included in the following product categories and their respective trigger volumes (in tonnes): beef, pork and sheep meat (4400 t), poultry meat (550 t), dairy products (1650 t), eggs in shell (6000 t), eggs and albumins (330 t), mushrooms (220 t), cereals ( 200 000 t), malt and wheat gluten (330 t), starches (550 t), sugars (8000 t), bran, sharps and other residues (2200 t), sweet corn (1500 t), sugar processed (6000 t), cereal processed (3300 t) and cigarettes (500 t).

According to the information available, none of the imports under anti-circumvention were above 1 tonne either in 2014 or in the current year to date. In 2015, to date, the fulfilment ratios for Union imports from Georgia under anti-circumvention are below 1 % for all the product categories.

However, the inclusion of a 'circumvention clause' is needed to avoid imports into the Union of non-Georgian products via Georgia using the advantages of the Agreement provisions and in particular to avoid that countries with bilateral free trade agreements with Georgia, for example Turkey and EUROPMED countries, use the Agreement with the Union to circumvent "rules of origin" requirements. This clause also serves as a mechanism to protect Georgian producers from this potential misuse and from unprecedented competition from non-Georgian producers.

The rapporteur supports the Commission proposal, as it concerns the incorporation into Union law of the relevant parts of the negotiated text of the Agreement and lays down the procedures to guarantee its effective application, in order to prevent a possible negative impact on the Union market.

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The Committee on Agriculture and Rural Development calls on the Committee on International Trade, as the committee responsible, to take into account the following amendment:

Amendment    1 Proposal for a regulation Recital 8 Text proposed by the Commission Amendment (8) In order to prevent a negative impact on the Union market as a result of an increase in imports, the Commission should adopt immediately applicable implementing acts where, in duly justified cases relating to the temporary suspension of the preferential tariffs under the anti-circumvention mechanism provided in the Agreement, imperative grounds of urgency so require, (8) In order to prevent a negative impact on the Union market as a result of an increase in imports from Georgia of the products in excess of the volume indicated in Annex II-C to the Agreement, the Commission should adopt immediately applicable implementing acts where, in duly justified cases relating to the temporary suspension of the preferential tariffs under the anti-circumvention mechanism provided in the Agreement, imperative grounds of urgency so require,

PROCEDURE – COMMITTEE ASKED FOR OPINION

PROCEDURE – COMMITTEE RESPONSIBLE