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AGREEMENT

IN THE FORM OF AN EXCHANGE OF LETTERS BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND THE REPUBLIC OF INDIA ON THE GUARANTEED PRICES FOR CANE SUGAR FOR 1978/79

LETTER NO 1

BRUSSELS , ...

SIR ,

1 . THE REPRESENTATIVES OF THE REPUBLIC OF INDIA AND OF THE COMMISSION , ON BEHALF OF THE EUROPEAN ECONOMIC COMMUNITY HAVE , WITHIN THE FRAMEWORK OF THE NEGOTIATIONS PROVIDED FOR IN ARTICLE 5 ( 4 ) OF THE AGREEMENT BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND THE REPUBLIC OF INDIA ON CANE SUGAR , AGREED THE FOLLOWING :

- FOR THE PERIOD 1 JULY 1978 TO 30 JUNE 1979 , THE GUARANTEED PRICES REFERRED TO IN ARTICLE 5 ( 4 ) OF THE AGREEMENT SHALL , FOR THE PURPOSES OF INTERVENTION WITHIN THE TERMS OF ARTICLE 6 OF THE AGREEMENT , BE

( A ) FOR RAW SUGAR , 27,81 UNITS OF ACCOUNT PER 100 KILOGRAMS ;

( B ) FOR WHITE SUGAR 34,49 UNITS OF ACCOUNT PER 100 KILOGRAMS .

THESE PRICES , WHICH REPRESENT AN INCREASE OF ABOUT 2 % OVER THOSE OF LAST YEAR , SHALL REFER TO SUGAR OF STANDARD QUALITY AS DEFINED IN COMMUNITY LEGISLATION UNPACKED , CIF EUROPEAN PORTS OF THE COMMUNITY .

2 . HAVING REGARD TO MARKET CONDITIONS GENERALLY , AND TO OTHER RELEVANT FACTORS , IT IS EXPECTED THAT THE ABOVE GUARANTEED PRICES FOR INDIAN SUGAR WILL ENABLE THE REPUBLIC OF INDIA TO SECURE ON COMMUNITY MARKETS , DURING THE DELIVERY PERIOD 1978/79 , PRICES IN EXCESS OF THE MARKET PRICES FOR THE DELIVERY PERIOD 1977/78 , AS ESTIMATED AT THE TIME OF LAST YEAR'S NEGOTIATION .

3 . IT IS AGREED THAT THE DECISION NOT TO PROVIDE FOR RETROACTIVITY IN RESPECT OF THE 1978/79 PRICES DOES NOT PREJUDICE THE POSITION OF THE REPUBLIC OF INDIA IN RELATION TO RETROACTIVITY IN ANY FUTURE NEGOTIATION IN ACCORDANCE WITH ARTICLE 4 ( 3 ) OF THE AGREEMENT ON CANE SUGAR .

4 . THE REPUBLIC OF INDIA POINTS OUT THAT , AS LONG AS THE ABOVE PRICES REFER TO SUGAR OFFERED ON A CIF EUROPEAN PORT BASIS , IT WILL HAVE TO CARRY THE FULL BURDEN OF FREIGHT CHARGES . AS A RESULT , ITS EX-FACTORY PRICES HAVE BEEN SUBSTANTIALLY LOWER THAN THE EX-FACTORY PRICES OF EUROPEAN BEET PRODUCERS . THE REPUBLIC OF INDIA THEREFORE REQUESTS THAT THE COMMUNITY CONSIDER APPROPRIATE WAYS AND MEANS OF PROVIDING SOME COMPENSATION FOR THESE CHARGES . THE COMMUNITY TAKES NOT OF THIS REQUEST .

I SHOULD BE OBLIGED IF YOU WOULD ACKNOWLEDGE RECEIPT OF THIS LETTER AND CONFIRM THAT THIS LETTER AND YOUR REPLY CONSTITUTE AN AGREEMENT BETWEEN YOUR GOVERNMENT AND THE COMMUNITY .

PLEASE ACCEPT , SIR , THE ASSURANCE OF MY HIGHEST CONSIDERATION .

FOR THE COUNCIL OF THE EUROPEAN COMMUNITIES

LETTER NO 2

BRUSSELS , ...

SIR ,

I HAVE THE HONOUR TO ACKNOWLEDGE RECEIPT OF YOUR LETTER OF TODAY WHICH READS AS FOLLOWS :

" 1 . THE REPRESENTATIVES OF THE REPUBLIC OF INDIA AND OF THE COMMISSION , ON BEHALF OF THE EUROPEAN ECONOMIC COMMUNITY HAVE , WITHIN THE FRAMEWORK OF THE NEGOTIATIONS PROVIDED FOR IN ARTICLE 5 ( 4 ) OF THE AGREEMENT BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND THE REPUBLIC OF INDIA ON CANE SUGAR , AGREED THE FOLLOWING :

- FOR THE PERIOD 1 JULY 1978 TO 30 JUNE 1979 , THE GUARANTEED PRICES REFERRED TO IN ARTICLE 5 ( 4 ) OF THE AGREEMENT SHALL , FOR THE PURPOSES OF INTERVENTION WITHIN THE TERMS OF ARTICLE 6 OF THE AGREEMENT , BE

( A ) FOR RAW SUGAR , 27,81 UNITS OF ACCOUNT PER 100 KILOGRAMS ;

( B ) FOR WHITE SUGAR 34,49 UNITS OF ACCOUNT PER 100 KILOGRAMS .

THESE PRICES , WHICH REPRESENT AN INCREASE OF ABOUT 2 % OVER THOSE OF LAST YEAR , SHALL REFER TO SUGAR OF STANDARD QUALITY AS DEFINED IN COMMUNITY LEGISLATION UNPACKED , CIF EUROPEAN PORTS OF THE COMMUNITY .

2 . HAVING REGARD TO MARKET CONDITIONS GENERALLY , AND TO OTHER RELEVANT FACTORS , IT IS EXPECTED THAT THE ABOVE GUARANTEED PRICES FOR INDIAN SUGAR WILL ENABLE THE REPUBLIC OF INDIA TO SECURE ON COMMUNITY MARKETS , DURING THE DELIVERY PERIOD 1978/79 , PRICES IN EXCESS OF THE MARKET PRICES FOR THE DELIVERY PERIOD 1977/78 , AS ESTIMATED AT THE TIME OF LAST YEAR'S NEGOTIATION .

3 . IT IS AGREED THAT THE DECISION NOT TO PROVIDE FOR RETROACTIVITY IN RESPECT OF THE 1978/79 PRICES DOES NOT PREJUDICE THE POSITION OF THE REPUBLIC OF INDIA IN RELATION TO RETROACTIVITY IN ANY FUTURE NEGOTIATION IN ACCORDANCE WITH ARTICLE 4 ( 3 ) OF THE AGREEMENT ON CANE SUGAR .

4 . THE REPUBLIC OF INDIA POINTS OUT THAT , AS LONG AS THE ABOVE PRICES REFER TO SUGAR OFFERED ON A CIF EUROPEAN PORT BASIS , IT WILL HAVE TO CARRY THE FULL BURDEN OF FREIGHT CHARGES . AS A RESULT , ITS EX-FACTORY PRICES HAVE BEEN SUBSTANTIALLY LOWER THAN THE EX-FACTORY PRICES OF EUROPEAN BEET PRODUCERS . THE REPUBLIC OF INDIA THEREFORE REQUESTS THAT THE COMMUNITY CONSIDER APPROPRIATE WAYS AND MEANS OF PROVIDING SOME COMPENSATION FOR THESE CHARGES . THE COMMUNITY TAKES NOT OF THIS REQUEST .

I SHOULD BE OBLIGED IF YOU WOULD ACKNOWLEDGE RECEIPT OF THIS LETTER AND CONFIRM THAT THIS LETTER AND YOUR REPLY CONSTITUTE AN AGREEMENT BETWEEN YOUR GOVERNMENT AND THE COMMUNITY . "

I HAVE THE HONOUR TO CONFIRM THE AGREEMENT OF MY GOVERNMENT WITH THE FOREGOING .

PLEASE ACCEPT , SIR , THE ASSURANCE OF MY HIGHEST CONSIDERATION .

FOR THE GOVERNMENT OF THE REPUBLIC OF INDIA