RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/329/Add.1
5 November 2001
(01-5425)
Council for Trade in Goods Original:  English
EXAMINATION OF THE REQUESTS FOR A WTO WAIVER –
NEW ACP-EC PARTNERSHIP AGREEMENT
Replies of the EC and the ACP states to the questions submitted by Australia, Canada, Colombia,
Costa Rica, Ecuador, Guatemala, Honduras, Nicaragua, Panama, Paraguay and Thailand
Additional clarifications provided by the EC and the ACP states
to the questions submitted
Addendum
The following communication, dated 2 November 2001, was received from the Permanent
Mission of the European Communities on behalf of the EC and ACP states.
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Following the fruitful informal meeting of the Working Party held on 30 October 2001, the
EC and the ACP States would like to prov ide the following further clarifications.
1. Description of the measure for which a GATT Ar ticle I waiver is requested, with indication of
the legal basis in the Partnership Agreement
The measure to be covered by the waiver is the preferential tariff1 treatment required by
Article 36.3 and Annex V of the Partnership Agreement. The requested waiver does not cover the
non-preferential trade regime.
In particular, as far as bananas are concerned, Article 1(a) of Annex V provides that the
Community “ shall take the necessary measure to ensure more favourable treatment than that granted
to third countries benefiting from the most-favoured-nation clause for the same products ”. This
language is identical to that of Article 168(2)(a)(ii) of the 4th Lomé Convention.
The clear text of Article 1(a) of Annex V does not exclude bananas from its scope, nor does it
provide for a different duration of the preferential treatment for bananas.
The obligation to grant more favourable treatment is implemented by Council Regulation
(EC) No 216/2001 (document G/C/W/254), which provides for a 300€/tonne tariff preference. Thatpreference is not limited in time. It applies within the A, B and C quotas and outside the quotas,
because the obligation contained in Article 1(a) of Annex V is unconditional : this in fact merely
continues the regime applied under Article 168(2)(a)(ii) of the 4
th Lomé Convention.
                                                     
1 See modification to the draft decision.G/C/W/329/Add.1
Page 2
What is limited in time is the application of a tariff rate quota system, as the EC intends to
adopt a tariff-only system in 2006 (the Understandin gs with the US and Ecuador indicate that the
move to a tariff-only regime could take place earlier than 2006). This will entail a re-binding of the
current 75 and 680 €/tonne bound rates2 under the relevant procedures of Article XXVIII of the
GATT 1994, but obviously the MFN trade regime, which may also be affected as a result of the futureenlargement of the EC or the New Round, is not the subject matter of the Article I waiver requested
by the EC and the ACP.
As indicated earlier, the EC and the ACP consider the possible re-binding exercise as a
tariffication operation, and they have offered to provide language describing this commitment both in
substance and in terms of procedure, to meet the concerns of certain Members about the future MFN
trade regime for bananas. It should be noted that this comes in addition to the enforcementmechanisms already existing in the text of the waiver decision and under Article XXVIII of the
GATT 1994.
2. Possibility for modifying the obligations under the Partnership Agreement
The EC and the ACP States would like to clarify that the Article I waiver is requested for the
provisions of the Partnership Agreement that requ ire a preferential tariff treatment for ACP imports.
As such, provisions relating to the amendments of the Partnership Agreement do not require on their
own a preferential tariff treatment.
Reply 2.1(e) contained in document G/C/W/329 refers to the questions on the procedures for
amending Annex V of the Partnership Agreement. To complement the reply, it has to be noted that in
examining any possible request from the ACP States, the Community will take its decisions with
reference to concessions granted to developing third countries (Article 1 (c) of Annex V). In this
examination, the Community will therefore ensure that its decision has no negative impact on non-ACP  developing countries. As mentioned in the written reply, the EC will notify the Members if the
amendment procedure in Annex V are used. This is identical to the previous provisions under the 4
th
Lomé Convention. The waiver does not apply to the Economic Partnership Agreements.
During the preparatory period during which the Lomé IV preferences are maintained, other
non-trade measures might be taken in order to ensure that ACP countries can take advantage of the
preferences granted. These concern notably those mentioned in Declaration XXIII of the PartnershipAgreement, such as measures to address supply side constraints in the ACP countries.
Other amendment procedures are foreseen in the Partnership Agreement that do not apply to
the economic and trade chapter and, therefore, are not covered by the waiver.
Article 20.3 of the Partnership Agreement refers to global strategies for development co-
operation. The operational guidelines in different areas of co-operation which are incorporated in a
compendium may have to be amended according to the evolution of the EC development policy in
coherence with international developments. This is why more flexibility was decided by the Parties to
the Partnership Agreement in order to amend the compendium.
Article 95.3 does not apply to the provisions on economic and trade co-operation, and notably
not to Article 36.3.
Article 100 on the status of the texts does not refer to possible amendments of Annex V of the
Partnership Agreement.
                                                     
2 Obviously, an Article I waiver cannot in any way modify the Schedules of the EC.G/C/W/329/Add.1
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3. Preferential trade regime for imports of sugar
The questions relate to the provisions of Protocol No 3 to the Partnership Agreement. This
protocol is identical to the sugar protocol annexed to the 4th Lomé Convention for which a similar
waiver to the one now requested was granted.
Article 1(a) of Annex V of the Partnership Agreement obliges the EU to ensure more
favourable treatment than that granted to third co untries benefiting from the MFN clause for the same
products.
For sugar, the preferential trade regime for sugar,  as set out in Protocol 3 to the Partnership
Agreement, has existed since 1975 and provides for the import by the EC of up to 1 294 700 tonnes(white sugar value) of ACP sugar annually. These quantities are bound in the EC’s schedules.
The modifications to the common organisation of the market in the sugar sector
3 agreed
earlier this year consist of a reduction of production quotas by 115 000 tonnes and the discontinuation
of storage costs to producers. These changes do not affect the EC’s import regime and are thereforenot relevant for this waiver request.
4. Fair trade
As made clear during the informal meeting of the Working Party, the EC and the ACP States
would like to point out that they do not request a waiver for Article 23(g) of the Partnership
Agreement, nor for any other provisions of the Pa rtnership Agreement than Article 36.3, Annex V and
its Protocols.
The promotion of fair trade products as referred to in Article 23(g) is a part of the
development strategies of ACP-EC co-operation and is given as an example for promoting trade
diversification, as this constitutes a need for European consumers. The Partnership Agreement does
not provide for any trade policy measures in relatio n to fair trade, and certainly none that would
restrict market access.
5. The future EC-ACP trade regime
The preparatory period mentioned in Article 36 refers to period ending on 1 January 2008 at
the latest when the EC maintains the non-reciprocal  trading arrangements, for which the EC and ACP
request for a GATT Article I waiver applies.
The transitional period mentioned in Article 37 refers to the post-2008 economic partnership
agreements and will form part of the negotiations on these trading arrangements. Article 37.7 refers
only to the negotiation of bilateral trade liberalisation, for which the Parties agreed to establish a
timetable and the final product coverage in accordance with relevant WTO rules, while taking into
account the socio-economic constraints of ACP countries.
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3 Council Regulation (EEC) No 1260/2001 of 19 June 2001 (OJ L178, 30/6/01, pg.1).