AGRICULTURE: MEMBER STATES AGREE TO REDUCE EXPORT REFUNDS FOR CERTAIN PRODUCTS.

• Position: Brief Article

Certain goods not covered by annex I of the Treaty (so-called non-Annex I goods) are eligible for export refunds provided for by the common agricultural policy in view of the agricultural raw materials (sugar, dairy products, cereals, eggs) used in their manufacture. These export refunds are designed to compensate the processing industry for the high cost of these raw materials in the European Union by comparison with the global market, and essentially concerns secondary processed agri-food products such as confectionery, biscuits and beverages. The aim of the Commission Communication (COM (1999) 625 of November 24, 1999) is to propose to the Council a global three-point approach permitting compliance with international undertakings and decisions on budgetary discipline taken by the European Council at the Berlin Summit.--Under agreement concluded at the close of the Uruguay Round of multilateral trade negotiations, the European Union pledged to restrict the annual figure available for refunds for certain agricultural products exported in the form of goods not covered by Annex I of the Treaty. The limit on the sum authorised for refunds under World Trade Organisation (WTO) commitments is around Euro 475 million for the 2000 budget year and 415 million for 2001. However, in view of the roll-over of funds not used during the previous four years, this Euro 475 million limit for 2000 will not stand. The Berlin European Council decided, by contrast, to place a ceiling from the 2000 budget year on EAGGF-Guarantee expenditure at a level significantly below that of the agriculture guideline. Thus for the 2000 Budget year, the ceiling for all EAGGF-Guarantee spending is Euro 41,738 million (including 37,352 million for traditional EAGGF-Guarantee expenditure) a sum significantly below the guideline for the year in question (Euro 46,549 million). As a consequence, the Commission, in its letter of amendment on the 2000 Preliminary Draft Budget, identified a need for Euro 560 million for export refund allocations for non-Annex I goods. Forecasts for the 1999 budget year correspond to consumption of about 570 million and current predictions for 2000 are for around 578 million. Measures must therefore be put in place to guarantee, long term, that refund expenditure on these products is broadly consistent with international commitments, i.e. Euro 415 million in relation to requirements estimated in the absence of measures, at between Euro 560 and 600...