AGREEMENT in the form of an exchange of letters on consultations between the European Community and the Kingdom of Thailand under GATT Article XXIII on rice

A. Letter from the European Community

Your Excellency,

I have the honour to confirm the understanding reached between the European Community and the Kingdom of Thailand on the European Community's tariff quotas on broken rice and manioc starch to be effective from 1 April 1996 as appeared in the note annexed to this Exchange of Letters.

In addition to the above understanding, the two parties further agree that they shall review jointly, at the request of either party, the functioning of the 'representative price` system for rice. If it appears to either party that the functioning of the system is materially impeding trade flows between the parties, the Commission of the European Communities in consultation with the Government of the Kingdom of Thailand shall examine significant problems identified with a view to implementing appropriate solutions. It is the expectation of the two parties that such a review should not be necessary before the year 1998.

On the basis of the above understanding and agreement, the two parties agree to suspend the current consultations under Article XXIII of the GATT 1994.

The aforementioned suspension agreement and the annex appertaining thereto shall be without prejudice to the rights and obligations of either party under the World Trade Organization (WTO). However, both parties will not exercise their rights so long as the annual tariff quotas are opened and remain effective for the year concerned; the party exercising the right will give a two-month notice prior to the end of the relevant quota year.

This letter and Your Excellency's identical letter shall constitute the agreement between the two parties on the suspension of the current consultations under Article XXIII of the GATT 1994.

Please accept, Your Excellency, the assurance of my highest consideration.

On behalf of the Council of the European Union

ANNEX

Note on tariff quotas

Following the discussions to further the common interest of the European Community and the Kingdom of Thailand, the following understanding between the European Community and the Kingdom of Thailand has been reached, effective from 1 April 1996:

1. Manioc starch:

(a) An additional autonomous annual TRQ of 10 500 tonnes will be opened by the European Community of which 10 000 tonnes will be allocated to Thailand;

(b) The in-quota rate for this additional autonomous annual TRQ will be the prevailing MFN rate reduced by ECU 100 per tonne;

(c) The in-quota rate of the two TRQs for manioc starch included in the schedule of the European Community, to be applied on an autonomous basis, will be the prevailing MFN rate reduced by ECU 100 per tonne;

(d) The European Community will, on an autonomous basis, waive the end-use requirements for these three TRQs.

2. Broken rice:

(a) A new annual TRQ of 80 000 tonnes will be opened by the European Community of which 41 600 tonnes will be allocated to Thailand.

(b) The in-quota rate will be the prevailing MFN rate reduced by ECU 28 per tonne.

To the extent that the TRQs are allocated to Thailand, the European Community import licences will be issued automatically within the agreed limits on the basis of export certificates issued by the Government of Thailand.

B. Letter from the Kingdom of Thailand

Sir,

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

'I have the honour to confirm the understanding reached between the European Community and the Kingdom of Thailand on the European Community's tariff quotas on broken rice and manioc starch to be effective from 1 April 1996 as appeared in the note annexed to this Exchange of Letters.

In addition to the above understanding, the two parties further agree that they shall review jointly, at the request of either party, the functioning of the "representative price" system for rice. If it appears to either party that the functioning of the system is materially impeding trade flows between the parties, the Commission of the European Communities in consultation with the Government of the Kingdom of Thailand shall examine significant problems identified with a view to implementing appropriate solutions. It is the expectation of the two parties that such a review should not be necessary before the year 1998.

On the basis of the above understanding and agreement, the two parties agree to suspend the current consultations under Article XXIII of the GATT 1994.

The aforementioned suspension agreement and the annex appertaining thereto shall be without prejudice to the rights and obligations of either party under the World Trade Organization (WTO). However, both parties will not exercise their rights so long as the annual tariff quotas are opened and remain effective for the year concerned; the party exercising the right will give a two-month notice prior to the end of the relevant quota year.

This letter and Your Excellency's identical letter shall constitute the agreement between the two parties on the suspension of the current consultations under Article XXIII of the GATT 1994.`

I have the honour to confirm that the above is acceptable to my Government and that your letter and this letter constitute an agreement in accordance with your proposal.

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

For the Government of the Kingdom of Thailand

'ANNEX

Note on tariff quotas

Following the discussions to further the common interest of the European Community and the Kingdom of Thailand, the following understanding between the European Community and the Kingdom of Thailand has been reached, effective from 1 April 1996:

1. Manioc starch:

(a) An additional autonomous annual TRQ of 10 500 tonnes will be opened by the European Community of which 10 000 tonnes will be allocated to Thailand.

(b) The in-quota rate for this additional autonomous annual TRQ will be the prevailing MFN rate reduced by ECU 100 per tonne.

(c) The in-quota rate of the two TRQs for manioc starch included in the schedule of the European Community, to be applied on an autonomous basis, will be the prevailing MFN rate reduced by ECU 100 per tonne.

(d) The European Community will, on an autonomous basis, waive the end-use requirements for these three TRQs.

2. Broken rice:

(a) A new annual TRQ of 80 000 tonnes will be opened by the European Community of which 41 600 tonnes will be allocated to Thailand.

(b) The in-quota rate will be the prevailing MFN rate reduced by ECU 28 per tonne.

To the extent that the TRQs are allocated to Thailand, the European Community import licences will be issued automatically within the agreed limits on the basis of export certificates issued by the Government of Thailand.`