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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 1979/80

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 AGREED 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 , ON THE FOLLOWING :

- FOR THE PERIOD 1 JULY 1979 TO 30 JUNE 1980 THE GUARANTEED PRICES REFERRED TO IN ARTICLE 5 ( 4 ) OF THE AGREEMENT SHALL , FOR THE PURPOSE OF INTERVENTION WITHIN THE TERMS OF ARTICLE 6 OF THE AGREEMENT , BE :

( A ) FOR RAW SUGAR , 34,13 ECU PER 100 KILOGRAMS ,

( B ) FOR WHITE SUGAR , 42,30 ECU PER 100 KILOGRAMS .

THESE PRICES , WHICH REPRESENT AN INCREASE OF 1,5 % OVER THOSE OF THE PRECEDING YEAR , SHALL REFER TO SUGAR OF STANDARD QUALITY AS DEFINED IN COMMUNITY LEGISLATION , UNPACKED , CIF EUROPEAN PORTS OF THE COMMUNITY .

2 . IT IS NOTED BY THE PARTIES TO THE AGREEMENT THAT , HAVING REGARD TO MARKET CONDITIONS GENERALLY AND OTHER RELEVANT FACTORS , THE REPUBLIC OF INDIA STRONGLY HOPED THAT IT WOULD BE POSSIBLE TO SECURE , IN ADDITION TO THE AGREED GUARANTEED PRICES , A PREMIUM ON COMMUNITY MARKETS DURING THE DELIVERY PERIOD 1979/80 .

3 . ALTHOUGH RETROACTIVITY IS NOT PROVIDED FOR IN RESPECT OF THE 1979/80 PRICES , IT IS AGREED THAT THIS YEAR'S DECISION 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 .

4 . IT WAS NOTED THAT THE COUNCIL OF MINISTERS OF THE COMMUNITY HAD NOT AUTHORIZED THE INCLUSION OF ANY FACTOR IN RESPECT OF FREIGHT CHARGES IN THE DETERMINATION OF THE GUARANTEED PRICES FOR THE DELIVERY PERIOD 1979/80 . THE REPUBLIC OF INDIA REITERATED ITS CONCERN AT THE BURDEN OF THESE CHARGES AND REQUESTED THAT THE SUBJECT SHOULD REMAIN OPEN FOR FURTHER CONSIDERATION . THE COMMUNITY TOOK NOTE 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 AGREED 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 , ON THE FOLLOWING :

- FOR THE PERIOD 1 JULY 1979 TO 30 JUNE 1980 THE GUARANTEED PRICES REFERRED TO IN ARTICLE 5 ( 4 ) OF THE AGREEMENT SHALL , FOR THE PURPOSE OF INTERVENTION WITHIN THE TERMS OF ARTICLE 6 OF THE AGREEMENT , BE :

( A ) FOR RAW SUGAR : 34,13 ECU PER 100 KILOGRAMS ,

( B ) FOR WHITE SUGAR : 42,30 ECU PER 100 KILOGRAMS .

THESE PRICES , WHICH REPRESENT AN INCREASE OF 1,5 % OVER THOSE OF THE PRECEDING YEAR , SHALL REFER TO SUGAR OF STANDARD QUALITY AS DEFINED IN COMMUNITY LEGISLATION , UNPACKED , CIF EUROPEAN PORTS OF THE COMMUNITY .

2 . IT IS NOTED BY THE PARTIES TO THE AGREEMENT THAT , HAVING REGARD TO MARKET CONDITIONS GENERALLY AND TO OTHER RELEVANT FACTORS , THE REPUBLIC OF INDIA STRONGLY HOPED THAT IT WOULD BE POSSIBLE TO SECURE , IN ADDITION TO THE AGREED GUARANTEED PRICES , A PREMIUM ON COMMUNITY MARKETS DURING THE DELIVERY PERIOD 1979/80 .

3 . ALTHOUGH RETROACTIVITY IS NOT PROVIDED FOR IN RESPECT OF THE 1979/80 PRICES IT IS AGREED THAT THIS YEAR'S DECISION 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 .

4 . IT WAS NOTED THAT THE COUNCIL OF MINISTERS OF THE COMMUNITY HAD NOT AUTHORIZED THE INCLUSION OF ANY FACTOR IN RESPECT OF FREIGHT CHARGES IN THE DETERMINATION OF THE GUARANTEED PRICES FOR THE DELIVERY PERIOD 1979/80 . THE REPUBLIC OF INDIA REITERATED ITS CONCERN AT THE BURDEN OF THESE CHARGES AND REQUESTED THAT THE SUBJECT SHOULD REMAIN OPEN FOR FURTHER CONSIDERATION . THE COMMUNITY TOOK NOTE 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