AGREEMENT in the form of an Exchange of Letters amending the Additional Protocol to the Europe Agreement on Trade in Textile Products between the European Community and the Republic of Hungary

Letter from the Council of the European Union

Sir,

1. I have the honour to refer to the negotiations held on 7-9 November 1995 between our respective Delegations with a view to amending the Additional Protocol on trade in textile products between the European Community and the Republic of Hungary, applied since 1 January 1993, as last amended by the Agreement in the form of an Exchange of Letters initialled on 25 November 1994. These negotiations were held in the context of Article 1, paragraph 3, of the aforesaid Additional Protocol.

2. During these negotiations both Parties noted with satisfaction the way in which the Additional Protocol has, in general, been implemented.

3. In order to foster the development of further mutually beneficial trade flows it was agreed to amend the Additional Protocol as follows:

3.1. Annex II (EU direct quotas) is replaced by Appendix 1 attached.

3.2. Part 1 of Annex III (Hungarian ceilings) is replaced by Appendix 2 attached.

3.3. The Annex to Appendix B concerning outward processing traffic is replaced by Appendix 3 attached (OPT quotas).

4. I should be obliged if you would kindly confirm the acceptance of your Government of the foregoing. Should this be the case, this letter, completed by its Appendices and your written confirmation, will constitute an Agreement in the form of an Exchange of Letters between the Community and the Republic of Hungary. This Agreement shall enter into force on the first day of the month following that in which the European Community and the Republic of Hungary notify each other that they have completed the necessary internal procedures to this effect. In the meantime, the amendments to the Additional Protocol will apply on a provisional basis from 1 January 1996, provided that they are applied on a reciprocal basis.

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

For the Council of the European Union

Appendix 1

ANNEX II (The full product descriptions of the categories listed in this Annex are to be found in Annex I to the Protocol)

>TABLE>

Appendix 2

ANNEX III HUNGARIAN CEILINGS ON COMMUNITY EXPORTS PART 1

>TABLE>

Notes

1. In the management of its global quota on consumer goods, Hungary will ensure that preferential treatment is given to textiles and clothing products of Community origin, including as regards classification.

2. The levels of the Community sub-ceilings outlined in this Annex shall be adjusted in case of a significant increase of internal consumption in Hungary, in order to improve the market access conditions for the Community. In particular, the Community share of the sub-ceilings should not be reduced as a result of an overall increase in the total level of the global quota for consumer goods.

The full product descriptions are to be found in Annex III, Part 2 to the Protocol.

Appendix 3

ANNEX TO APPENDIX B (The full product descriptions of the categories listed in this Annex are to be found in Annex I to the Protocol)

>TABLE>

Letter from the Council of the Government of the Republic of Hungary

Sir,

I have the honour to acknowledge receipt of your letter of . . . which reads as follows:

'Sir,

1. I have the honour to refer to the negotiations held on 7-9 November 1995 between our respective Delegations with a view to amending the Additional Protocol on trade in textile products between the European Community and the Republic of Hungary, applied since 1 January 1993, as last amended by the Agreement in the form of an Exchange of Letters initialled on 25 November 1994. These negotiations were held in the context of Article 1, paragraph 3, of the aforesaid Additional Protocol.

2. During these negotiations both Parties noted with satisfaction the way in which the Additional Protocol has, in general, been implemented.

3. In order to foster the development of further mutually beneficial trade flows it was agreed to amend the Additional Protocol as follows:

3.1. Annex II (EU direct quotas) is replaced by Appendix 1 attached.

3.2. Part 1 of Annex III (Hungarian ceilings) is replaced by Appendix 2 attached.

3.3. The Annex to Appendix B concerning outward processing traffic is replaced by Appendix 3 attached (OPT quotas).

4. I should be obliged if you would kindly confirm the acceptance of your Government of the foregoing. Should this be the case, this letter, completed by its Appendices and your written confirmation, will constitute an Agreement in the form of an Exchange of Letters between the Community and the Republic of Hungary. This Agreement shall enter into force on the first day of the month following that in which the European Community and the Republic of Hungary notify each other that they have completed the necessary internal procedures to this effect. In the meantime, the amendments to the Additional Protocol will apply on a provisional basis from 1 January 1996, provided that they are applied on a reciprocal basis.

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

I have the honour to confirm that my Government is in agreement with the contents of your letter.

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

For the Council of the Republic of Hungary

Appendix 1

ANNEX II (The full product descriptions of the categories listed in this Annex are to be found in Annex I to the Protocol)

>TABLE>

Appendix 2

ANNEX III HUNGARIAN CEILINGS ON COMMUNITY EXPORTS PART 1

>TABLE>

Notes

1. In the management of its global quota on consumer goods, Hungary will ensure that preferential treatment is given to textiles and clothing products of Community origin, including as regards classification.

2. The levels of the Community sub-ceilings outlined in this Annex shall be adjusted in case of a significant increase of internal consumption in Hungary, in order to improve the market access conditions for the Community. In particular, the Community share of the sub-ceilings should not be reduced as a result of an overall increase in the total level of the global quota for consumer goods.

The full product descriptions are to be found in Annex III, Part 2 to the Protocol.

Appendix 3

ANNEX TO APPENDIX B (The full product descriptions of the categories listed in this Annex are to be found in Annex I to the Protocol)

>TABLE>