AGREEMENT in the form of an Exchange of Letters relating to the 1981 Agreement between the European Economic Community and the Socialist Federal Republic of Yugoslavia on trade in the sheepmeat and goatmeat sector

A. Letter No 1 Sir,

I have the honour to refer to the Exchange of Letters of 28 April 1981 constituting an Agreement between the European Community and Yugoslavia establishing provisions relating to imports of sheepmeat and goatmeat into the Community from Yugoslavia and to negotiations held between our respective delegations for the purpose of establishing temporary derogations from certain of those provisions concurrent with the implementation of measures to stabilize the European Community sheepmeat sector and to reform the European Community's internal regime in order to achieve a unified European Community sheepmeat market. Accordingly, they have agreed on the following derogations from the Principal Agreement which shall remain in force for the duration of this Agreement:

(1) Yugoslavia undertakes to ensure that its exports of sheep and sheepmeat to the different regions of the Community remain such as not disturb these markets and shall not exceed the traditional quantities during the sensitive periods of the year;

(2) prices for lamb and live animals imported from Yugoslavia will be monitored in accordance with the procedures contained in the Annex to this Agreement;

(3) in point 5 of the Principal Agreement, the words 'a maximum amount of 10 % ad valorem' shall be deemed to be replaced by the words '0 %';

(4) notwithstanding point 2 of this Agreement, either Party may request consultations concerning the operation of this Agreement at any time;

(5) the provisions of this Agreement shall be agreed without prejudice to the rights of Yugoslavia and the European Community under GATT;

(6) this Agreement shall enter into force on 1 January 1989 and shall remain in force until 31 December 1992. However, for live animals, the levy shall not be reduced until 1 January 1990;

(7) within six months prior to expiration of this Agreement, its provisions shall be reviewed.

I have the honour to propose, if the foregoing is acceptable to your Government, this letter and your confirmatory reply shall together constitute and evidence an Agreement between the European Economic Community and the Socialist Federal Republic of Yugoslavia on the matter.

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

On behalf

of the Council of the European Communities

ANNEX

Price surveillance procedure

1. The European Community will monitor the prices in each Member State for imported lamb carcases and live animals from Yugoslavia on the basis of the average prices over each monthly period.

2. Yugoslavia will communicate to the Commission of the European Communities each month the prices of exports of lamb and live animals.

3. In the event that a downward movement of the prices for Yugoslav lamb carcases and/or live animals is observed in a particular Member State and is indicative of a problem, technical consultations will take place at the request of either Party to determine factors causing the downward movement. The Parties shall consider any recommendations arising out of these consultations for the resolution of the problem. If the problem identified is attributable to the prices at which Yugoslav lamb carcases or live animals are being imported into that Member State, then the Yugoslav authorities will take whatever action is available to restore the prices.

B. 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 Exchange of Letters of 28 April 1981 constituting an Agreement between the European Community and Yugoslavia establishing provisions relating to imports of sheepmeat and goatmeat into the Community from Yugoslavia and to negotiations held between our respective delegations for the purpose of establishing temporary derogations from certain of those provisions concurrent with the implementation of measures to stabilize the European Community sheepmeat sector and to reform the European Community's internal regime in order to achieve a unified European Community sheepmeat market. Accordingly, they have agreed on the following derogations from the Principal Agreement which shall remain in force for the duration of this Agreement:

(1) Yugoslavia undertakes to ensure that its exports of sheep and sheepmeat to the different regions of the Community remain such as not to disturb these markets and shall not exceed the traditional quantities during the sensitive periods of the year;

(2) prices for lamb and live animals imported from Yugoslavia will be monitored in accordance with the procedures contained in the Annex to this Agreement;

(3) in point 5 of the Principal Agreement, the words "a maximum amount of 10 % ad valorem" shall be deemed to be replaced by the words "0 %";

(4) notwithstanding point 2 of this Agreement, either Party may request consultations concerning the operation of this Agreement at any time;

(5) the provisions of this Agreement shall be agreed without prejudice to the rights of Yugoslavia and the European Community under GATT;

(6) this Agreement shall enter into force on 1 January 1989 and shall remain in force until 31 December 1992. However, for live animals, the levy shall not be reduced until 1 January 1990;

(7) within six months prior to expiration of this Agreement, its provisions shall be reviewed.

I have the honour to propose that, if the foregoing is acceptable to your Government, this letter and your confirmatory reply shall together constitute and evidence an Agreement between the European Economic Community and the Socialist Federal Republic of Yugoslavia on the matter.'

I have the honour to confirm the foregoing is acceptable to my Government and that your letter together with this reply shall constitute an Agreement in accordance with your proposal.

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

For the Government

of the Socialist Federal Republic of Yugoslavia

ANNEX

Price surveillance procedure

1. The European Community will monitor the prices in each Member State for imported lamb carcases and live animals from Yugoslavia on the basis of the average prices over each monthly period.

2. Yugoslavia will communicate to the Commission of the European Communities each month the prices of exports of lamb and live animals.

3. In the event that a downward movement of the prices for Yugoslav lamb carcases and/or live animals is observed in a particular Member State and is indicative of a problem, technical consultations will take place at the request of either Party to determine factors causing the downward movement. The Parties shall consider any recommendations arising out of these consultations for the resolution of the problem. If the problem identified is attributable to the prices at which Yugoslav lamb carcases or live animals are being imported into that Member State, then the Yugoslav authorities will take whatever action is available to restore the prices.