ANNEX II

EXCHANGE OF LETTERS between the European Community and the Republic of Argentina on cereals

A. Letter from the European Community

Brussels, . . .

Sir,

I have the honour to confirm the following understanding reached between the delegations of the Republic of Argentina and the European Community:

The European Community agrees to make the following adjustment to its import rules for 'flint maize` (within tariff code 1005 90 00) from 1 January to 30 June 1996:

The abatement for flint maize (within tariff code 1005 90 00) will be increased from ECU 8/tonne to ECU 14/tonne.

Flint maize will be certified by the Instituto Argentino de Sanidad y Calidad Vegetal as being in conformity with the specifications for 'maíz colorado o plata`.

The two Parties will enter into consultations before 1 March 1996 with a view to determining whether the level of the abatement is reflecting prevailing market conditions.

It is agreed that the two Parties will enter into discussions in the first half of 1996 with a view to examining what measures might be necessary in view of the European Community commitments, under Schedule LXXX, for subsequent marketing years. If the outcome of those consultations is mutually satisfactory, its results may be implemented starting 1 July 1996.

Subject to the foregoing being implemented, the Republic of Argentina will not request consultations under Article XXII or XXIII of the GATT 1994 on this issue.

I have the honour to propose that, if the above is acceptable to your Government, this letter and your confirmation shall together constitute an Agreement between the European Community and the Republic of Argentina.

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

On behalf of the Council of the European Union

B. Letter from the Republic of Argentina

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 following understanding reached between the delegations of the Republic of Argentina and the European Community:

The European Community agrees to make the following adjustment to its import rules for "flint maize" (within tariff code 1005 90 00) from 1 January to 30 June 1996:

The abatement for flint maize (within tariff code 1005 90 00) will be increased from ECU 8/tonne to ECU 14/tonne.

Flint maize will be certified by the Instituto Argentino de Sanidad y Calidad Vegetal as being in conformity with the specifications for "maíz colorado o plata".

The two Parties will enter into consultations before 1 March 1996 with a view to determining whether the level of the abatement is reflecting prevailing market conditions.

It is agreed that the two Parties will enter into discussions in the first half of 1996 with a view to examining what measures might be necessary in view of the European Community commitments, under Schedule LXXX, for subsequent marketing years. If the outcome of those consultations is mutually satisfactory, its results may be implemented starting 1 July 1996.

Subject to the foregoing being implemented, the Republic of Argentina will not request consultations under Article XXII or XXIII of the GATT 1994 on this issue.

I have the honour to propose that, if the above is acceptable to your Government, this letter and your confirmation shall together constitute an Agreement between the European Community and the Republic of Argentina.`

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 Republic of Argentina