AGREEMENT in the form of an exchange of letters between Austria and the European Economic Community amending the Agreement on price observance and the arrangements for the importation of certain types of cheese

Letter No 1

Sir,

I have the honour to refer to the Agreement on price observance and import arrangements annexed to the Agreement on 20 September 1977 between Austria and the European Economic Community concerning certain types of cheese negotiated under Article XXVIII of GATT, and in particular in points 4 and 5 thereof, which provide for consultations between the two Parties on any question which may arise in connection with the application of the Agreement.

Accordingly, Austria and the European Economic Community have held consultations as a result of which the following provisions have been drawn up:

1. From 1 June 1981, the free-at-Austrian-Frontier price to be observed by the EuropeanEconomic Community shall be fixed by common accord as follows:

The above free-at-frontier prices shall replace those given in paragraph 2 of the Agreementof 20 September 1977.

2. The free-at-frontier prices given in point 1 shall be increased or reduced by a sumequal to the product of the increase or reduction in the ex-dairy price of 3 75 % fatmilk in Austria expressed in Schillings per 100 kilograms multiplied by the followingcoefficients for each of the types of cheese covered by the Agreement :

3. In order that the free-at-frontier prices may be observed, the Austrian authorities shallkeep the Commission of the European Communities informed of increases in theex-dairy price of milk in Austria. On receipt of this information the Commission ofthe European Communities and the Austrian authorities, for their own sphere of jurisdiction,shall adopt appropriate measures, as soon as possible, to permit the simultaneousentry into force of the new free-at-frontier prices.

4. The changes in free-at-frontier prices referred to in point 2 shall be made inaccordance with the following provisions:

The two Parties undertake to initiate consultations to examine the situation and, wherenecessary, take appropriate action should the provisions of this exchange of letters failto permit the harmonious development of trade in the types of cheese covered by theAgreement.

In particular, consultations shall take place if there is a reduction in normal exportflows from the Community to Austria. In that event, any change in the minimumprices of all or some of the types of cheese covered by the Agreement as a result of anincrease in the Austrian milk price may take place only as a result of agreement duringthe above consultations.

Consultations may also take place if all or some of the types of cheese covered by theAgreement are imported into Austria from the Community in such increased quantitiesas to cause serious disturbances on the Austrian market. In that case, an exceptionalincrease in the minimum prices of all or some of the types of cheese covered bythe Agreement may be considered only if agreement is reached during the consultationsreferred to in the first subparagraph above.

I should be grateful if you would confirm whether you are in agreement with the above.

Please accept, Sir, the assurance of my highest consideration.

On behalf of the Council of the European Communities

Letter No 2

Sir,

I have the honour to acknowledge receipt of your letter of today's date, which reads as follows:

"I have the honour to refer to the Agreement on price observance and import arrangements annexed to the Agreement on 20 September 1977 between Austria and the European Economic Community concerning certain types of cheese negotiated under Article XXVIII of GATT, and in particular in points 4 and 5 thereof, which provide for consultations between the two Parties on any question which may arise in connection with the application of the Agreement.

Accordingly, Austria and the European Economic Community have held consultations as a result of which the following provisions have been drawn up:

1. From 1 June 1981, the free-at-Austrian-frontier price to be observed by the EuropeanEconomic Community shall be fixed by common accord as follows:

The above free-at-frontier prices shall replace those given in paragraph 2 of theAgreement of 20 September 1977.

2. The free-at-frontier prices given in point 1 shall be increased or reduced by a sumequal to the product of the increase or reduction in the ex-dairy price of 3 75 % fatmilk in Austria expressed in Schillings per 100 kilograms multiplied by thefollowing coefficients for each of the types of cheese covered by the Agreement :

3. In order that the free-at-frontier prices may be observed, the Austrian authoritiesshall keep the Commission of the European Communities informed of increases inthe ex-dairy price of milk in Austria. On receipt of this information the Commissionof the European Communities and the Austrian authorities, for their ownsphere of jurisdiction, shall adopt appropriate measures, as soon as possible, topermit the simultaneous entry into force of the new free-at-frontier prices.

4. The changes in free-at-frontier prices referred to in point 2 shall be made inaccordance with the following provisions:

The two Parties undertake to initiate consultations to examine the situation and,where necessary, take appropriate action should the provisions of this exchange ofletters fail to permit the harmonious development of trade in the types of cheesecovered by the Agreement.

In particular, consultations shall take place if there is a reduction in normal exportflows from the Community to Austria. In that event, any change in the minimumprices of all or some of the types of cheese covered by the Agreement as a result ofan increase in the Austrian milk price may take place only as a result of agreementduring the above consultations.

Consultations may also take place if all or some of the types of cheese covered bythe Agreement are imported into Austria from the Community in such increasedquantities as to cause serious disturbances on the Austrian market. In that case, anexceptional increase in the minimum prices of all or some of the types of cheesecovered by the Agreement may be considered only if agreement is reached duringthe consultations referred to in the first subparagraph above.

I should be grateful if you would confirm whether you are in agreement with theabove".

I am able, on behalf of the Federal Government of Austria, to confirm my agreement to the content of your letter, subject to the accomplishment of the procedure provided for in the federal constitution of Austria.

Please accept, Sir, the assurance of my highest consideration.

For the Government of the Republic of Austria