Agreement in the form of an Exchange of Letters

between the European Community and the Kingdom of Morocco concerning reciprocal liberalisation measures and the replacement of the agricultural protocols to the EC-Morocco Association Agreement

A. Letter from the European Community

Brussels, ...

Sir,

I have the honour to refer to the negotiations which have been held under Article 16 of the Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part, which has been in force since 1 March 2000, and which provides that the Community and Morocco will gradually implement greater liberalisation of their reciprocal trade in agricultural products.

The negotiations to that end were held in accordance with Article 18(1) of the Euro-Mediterranean Agreement, which provides that from 1 January 2000 the Community and Morocco will assess the situation with a view to determining the liberalisation measures to be applied by the parties with effect from 1 January 2001.

On the conclusion of the negotiations the two Parties agreed to the following:

1. Protocols 1 and 3 to the Association Agreement shall be replaced by the protocols annexed hereto.

2. In the first paragraph of Article 18 of the Association Agreement, the dates "1 January 2000" and "1 January 2001" shall be replaced by "1 January 2007" and "1 January 2008".

3. The Agreement in the form of an Exchange of Letters between the Community and the Kingdom of Morocco annexed to the Association Agreement, relating to Article 1 of Protocol 1 and concerning imports into the Community of fresh cut flowers and flower buds falling within subheading 0603 10 of the common customs tariff is hereby repealed.

4. This Agreement shall apply from 1 January 2004, except for Articles 2, 4 and 5 of Protocol 1, which shall apply to tomatoes from 1 October 2003.

I should be obliged if you would confirm that your Government is in agreement with the contents of this letter.

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

On behalf of the Council of the European Union

B. Letter from Morocco

Rabat, ...

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 negotiations which have been held under Article 16 of the Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part, which has been in force since 1 March 2000, and which provides that the Community and Morocco will gradually implement greater liberalisation of their reciprocal trade in agricultural products.

The negotiations to that end were held in accordance with Article 18(1) of the Euro-Mediterranean Agreement, which provides that from 1 January 2000 the Community and Morocco will assess the situation with a view to determining the liberalisation measures to be applied by the parties with effect from 1 January 2001.

On the conclusion of the negotiations the two Parties agreed to the following:

1. Protocols 1 and 3 to the Association Agreement shall be replaced by the protocols annexed hereto.

2. In the first paragraph of Article 18 of the Association Agreement, the dates '1 January 2000' and '1 January 2001' shall be replaced by '1 January 2007' and '1 January 2008'.

3. The Agreement in the form of an Exchange of Letters between the Community and the Kingdom of Morocco annexed to the Association Agreement, relating to Article 1 of Protocol 1 and concerning imports into the Community of fresh cut flowers and flower buds falling within subheading 0603 10 of the common customs tariff is hereby repealed.

4. This Agreement shall apply from 1 January 2004, except for Articles 2, 4 and 5 of Protocol 1, which shall apply to tomatoes from 1 October 2003.

I should be obliged if you would confirm that your Government is in agreement with the contents of this letter."

I have the honour to inform you that the Kingdom of Morocco is in agreement.

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

For the Kingdom of Morocco

Protocol No 1

on the arrangements applying to imports into the Community of agricultural products originating in Morocco

Article 1

1. The products listed in Annex 1.A, originating in Morocco, shall be admitted for import into the Community in accordance with the conditions set out below and in that Annex.

2. Import duties shall be either eliminated or reduced by the percentage indicated for each product in column (a) of Annex 1.A.

Where the common customs tariff provides for the application of ad valorem customs duties and a specific customs duty for certain products marked with an asterisk in column (a) or (c), the rates of reduction shown in column (a) and in column (c), as referred to in paragraph 3, shall apply only to the ad valorem customs duty.

3. The customs duties for certain products shall be eliminated within the limits of the tariff quotas shown against them in column (b) of Annex 1.A.

For the quantities imported in excess of the quotas, the common customs duties shall be reduced at the rates indicated in column (c) of that Annex.

For the first year of application of the Agreement, except for tomatoes falling within CN code 0702 00 00, the volumes of the tariff quotas for which the quota period began before the entry into application of this agreement shall be calculated as a pro rata of the basic volumes, taking into account the part of the period which elapsed before the date of entry into force of this Agreement.

4. For some of the products listed in Annex 1.A and indicated in column (d), the quotas shall be increased from 1 January 2004 to 1 January 2007 on the basis of four equal instalments, each corresponding to 3 % of the quota amounts.

5. If the Community reduces the most-favoured-nation duties it applies, the phasing-out of tariffs as indicated in columns (a) and (c) shall apply to the said reduced duties.

Article 2

1. For fresh or chilled tomatoes falling within CN code 0702 00 00, for each period from 1 October to 31 May, hereinafter called "marketing years", under the following tariff quotas and subject to paragraph 2 below:

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(a) ad valorem customs duties shall be eliminated,

(b) the entry price level from which specific duties will be reduced to zero, hereinafter called the "agreed entry price", shall be EUR 461 per tonne.

2. When the total quantity of tomatoes originating in Morocco released for free circulation in the Community during a given marketing year does not exceed the sum of the basic monthly quotas and the additional quota applicable for that marketing year, the additional quota for the following marketing year shall be that indicated at line A in paragraph 1 above. Where that condition is not met during a given marketing year, the additional quota for the following year shall be that indicated at line B in paragraph 1 above. However, a maximum tolerance of 1 % shall be accepted for the purpose of assessing whether this condition has been met.

3. Morocco undertakes to ensure that no more than 30 % of this additional quota is used during any one month.

4. Drawings on the basic monthly tariff quotas shall be stopped on 15 January for the months from October to December each marketing year and on the second working day after 1 April for the months from January to March. The following working day, the Commission shall determine the unused quantities under the basic monthly quotas concerned, and these shall be transferred to the additional quota for that marketing year. From the above dates, all retroactive applications under one of the basic monthly tariff quotas which has been closed and any unused quantities to be returned to those quotas shall be taken from or placed in the additional tariff quota for the marketing year concerned.

Article 3

For the products listed below, the agreed entry price level from which specific duties will be reduced to zero during the periods indicated shall be those set out below, and the ad valorem customs duties shall be eliminated for the quantities and periods fixed in this Article.

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Article 4

For the products referred to in Articles 2 and 3:

- if the entry price of a particular consignment is 2 %, 4 %, 6 % or 8 % below the agreed entry price, the specific customs duty under the quota shall be 2 %, 4 %, 6 % or 8 % of the agreed entry price;

- if the entry price of a particular consignment is below 92 % of the agreed entry price, the specific customs duty bound in the WTO shall apply;

- these agreed entry prices shall be reduced in the same proportions and at the same pace as the entry prices bound in the WTO.

Article 5

1. The aim of the specific arrangements provided for in Articles 2 and 3 of this Protocol shall be to preserve the level of Morocco's traditional exports to the Community and to avoid disturbing Community markets.

2. In order to ensure that the aim described in the first paragraph and Articles 2 and 3 is fully achieved and to improve market stability and continuity of supply, the two Parties shall hold consultations during the second quarter of each year, or at any time if one of the Parties so requests, no more than three working days after such a request.

Consultations shall cover trade during the previous marketing year and the outlook for the coming marketing year, in particular the market situation, production forecasts, estimated production and export prices and possible market developments.

Where necessary, the Parties shall take the necessary steps to ensure that the aim described in the first paragraph of this Article and in Articles 2 and 3 is fully achieved.

3. Without prejudice to other provisions of this Agreement, if, given the particular sensitivity of the agricultural markets, imports of products originating in Morocco which are the subject of concessions granted under this Protocol cause serious disturbance to Community markets within the meaning of Article 25 of the Agreement, both Parties shall hold consultations immediately to find an appropriate solution. Pending such solution, the Community may take the measures it deems necessary.

Article 6

Wine originating in Morocco bearing a registered designation of origin shall be accompanied by a certificate indicating the origin in accordance with the model in Annex I.B to this Protocol or by a V I 1 or V I 2 document annotated in accordance with Article 25 of Regulation (EC) No 883/2001 on the certificates and analyses required for imports of wine, grape juice and grape must.

ANNEX 1A

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ANNEX 1B

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Protocol No 3

concerning the arrangements applicable to imports into Morocco of agricultural products originating in the Community

Article 1

1. The import duties on imports into Morocco of products originating in the Community as listed in the Annex hereto shall be as set in column (a) of the Annex. The successive reductions provided for in this Agreement shall be made by the percentages indicated in columns (c), (e), (g), (i) and (k) for the quantities covered by the tariff quotas indicated in columns (b), (d), (f), (h) and (j).

2. Without prejudice to paragraph 3, if any erga omnes tariff reduction is applied after this Agreement has been signed, the reduced duty shall replace the duties indicated in column (a) of the Annex for the purposes of paragraph 1 as from the date when that reduction is applied.

3. For products falling within CN code ex 1001 90 99 as referred to in the Annex, the duty indicated in column (a) of the Annex shall be that applied on 1 October 2003 and shall remain at or below that level for the purposes of calculating the tariff reduction.

If the duty concerned is reduced on an erga omnes basis after that date, the percentage indicated in columns (c), (e), (g), (i) and (k) shall be adjusted according to the following rules:

- if the duty is reduced on an erga omnes basis, the percentage shall be increased by 0,275 % per percentage point of reduction;

- if the duty is subsequently increased on an erga omnes basis, the percentage shall be reduced by 0,275 % per percentage point of increase;

- if the duty is again adjusted either upwards or downwards, the percentage resulting from the application of the previous indents shall be adjusted using the relevant formula.

Article 2

1. For cereals falling within CN code ex 1001 90 99, the tariff quota shall be fixed as stipulated in the footnote on page 2 of the Annex on the basis of Moroccan output during the current year, as estimated and published by the Moroccan authorities during May. The quota will be adapted if necessary at the end of July in the light of a communication from the Moroccan authorities fixing the definitive volume of Moroccan output. However, the result of any such adjustment must be adjusted by common accord between the Parties either upwards or downwards by 5 % depending on the outcome of the consultations referred to in paragraph 2.

The above tariff quota shall not apply during June and July. During the consultations provided for in the following paragraph, the Parties shall agree to consider whether to extend the timetable in the light of the forecasts for the Moroccan market. However, any extension may not go beyond 31 August.

2. For the purposes of managing the provisions set out in paragraph 1, and in order to ensure supplies to the Moroccan market as well as the stability and continuity of that market and to stabilise prices on the Moroccan market and preserve traditional trade flows, the following cooperation arrangements shall apply in the cereals sector.

Before the beginning of each marketing year, no later than the second half of May, the parties shall hold consultations.

The purpose of these consultations will be to discuss the market situation for cereals including, in particular, production forecasts for Moroccan common wheat, the situation of stocks, consumption, producer and export prices and possible market development as well as possibilities of adapting supply to demand.

3. If, after the entry into force of this Agreement, Morocco grants a larger tariff reduction on cereals falling within CN code ex 1001 90 99 to a third country under an international agreement, Morocco undertakes to grant the same tariff reduction to the Community as an autonomous measure.

Article 3

Without prejudice to other provisions of this Agreement, if, given the particular sensitivity of the agricultural markets, imports of products originating in the Community which are the subject of concessions granted under this Protocol, cause serious disturbance to the Moroccan market within the meaning of Article 25 of the Agreement, both Parties shall hold consultations immediately to find an appropriate solution. Pending such solution, Morocco may take the measures it deems necessary.

ANNEX

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(e) This rate shall be applied to the customs value. Where the declared value is less than MAD 3500/tonne, an additional import duty of 123 % shall be applied to the difference between the threshold fixed (MAD 3500/tonne) and the declared value.

Joint Declaration

The Parties hereby agree to review the situation regarding the tariff preferences established in Protocol 3, in particular for the following products: animal and vegetable oils and fats falling within CN codes 1515 19 10, 1515 90 60, 1515 90 99, 1516 10 90, 1516 20 95, 1516 20 96 and 1516 20 98 and beet sugar falling within CN code 1701 12 90, in accordance with the objective provided for in Article 16 of the Association Agreement.

Joint Declaration

The Parties note that this Agreement shall be applied by the Kingdom of Morocco by means of a tendering procedure for import licences for the purposes of managing the preferential quotas.

If the tendering arrangements are changed or if a system of direct payments is introduced, the Parties agree to hold consultations under Article 20 of the Association Agreement.