EEC - Tariff Treatment on Imports of Citrus Products from Certain Countries in the Mediterranean Region
EC Citrus (Source: GATT Analytical Index)
Products at Issue
|Products at issue||
|Type of product||
Fruits and dried fruits
Key legal aspects
|Chairperson||Paul Wurth (Switzerland)|
|Other members||Anti Kuosmanen (Finland), Hardeep Puri (India), J. Goodman (New Zealand), B. Eberhard (Switzerland)|
|Legal basis at issue||
|Claims at issue||
|Defences at issue||
|No of Pages (total / legal reasoning)||105 (and 22 annex)|
|Request for consultations|
|Request for establishment|
|Outcome of the proceedings||
|Additional Info||L/5012 (08/08/1980) US Request for consultations (24/07/1980)
L/5037 (08/10/1980) Communication from the EEC (29/09/1980) accepted consultations.
L/5337 (18/06/1982) Request for establishment of a panel (15/06/1982) Consultations under GATT Article XXII and GATT Article XXIII:1 (20/04/1982)
L/5339 (25/06/1982) Communication from the EEC (24/06/1982) "considers that these tariff arrangements are consistent with Article XXIV and that the United States complaint is thus inadmissible."
C/M/159 (10/08/1982) Minutes of Council Meeting (29-30/06/1982) Council agreed to revert to this item.
C/M/160 (24/09/1982) Minutes of Council Meeting (21/07/1982) Norway suggested requesting the Director-General's good offices, supported by Chile and Spain. US was prepared for this but expecting a panel to be established if that did not lead to a mutually acceptable solution.
C/M/161 (29/10/1982) Minutes of Council Meeting (01/10/1982) Director-General "stated that he had met with the delegations" of the US and EEC, "with a view to the conciliation of the outstanding differences between the parties." He "had made a proposal on the basis of which the parties might open negotiations. (...) On the basis of the response to his proposal, the Director-General stated that he had concluded that no purpose would be served to continue the process of good offices, as it did not appear to be possible to conciliate the outstanding differences between the parties." US requested establishment of a panel. EEC "had no basic objection (...) would however have to hold consultations with other parties interested in the case."
C/M/162 (19/11/1982) Minutes of Council Meeting (02/11/1982) EEC: "the matter was not a dispute between two contracting parties alone, but called into question preferences accorded to certain developing countries under various agreements that had been examined by working parties. These other interested parties had to be heard and associated as well. Some contracting parties considered that a panel was not appropriate to such a problem. The EEC regretted that the US insisted on a panel, but would not oppose, should the Council decide to establish one." Chairman: "while some delegations had indicated a clear preference for a working party, no strong objection had been raised to the establishment of a panel." The Council agreed to establish a panel.
L/5776 (07/02/1985) EEC – Tariff Treatment on Imports of Citrus Products from Certain Countries in the Mediterranean Region – Report of the Panel:
(a) The Panel concluded that the granting by the EEC of tariff preferences on certain citrus products originating in certain Mediterranean countries and not on those products originating in all other contracting parties, including the United States, would be inconsistent with the obligations of the EEC under the General Agreement as regards Article 1:1, unless otherwise permitted under other provisions of the General Agreement or under a decision of the contracting parties.
(b) Given the lack of consensus, there had been no decision by the contracting parties on the conformity with Article XXIV of the agreements under which the EC grants tariff preferences to certain citrus products originating from certain Mediterranean countries, and therefore the legal status of the agreements remained open.
(c) The Panel had not been requested, nor would it be proper for it to pass judgment on the conformity of the EC agreements as a whole with the provisions of Article XXIV.
(d) In the light of the conclusions contained in (b) and (c) above, there could not be said to be a clear case of infringement by the EEC of the provisions of the General Agreement which would constitute prima facie nullification or impairment in the sense of Article XXIII:1(a).
(e) The examination of the matter in accordance with Article XXIII:1(b) was in keeping with the Panel's terms of reference.
(f) Given that the tariffs on some of the products covered by the complaint of the United States were not bound, that the preferences were already being granted by the EC to certain Mediterranean countries on certain fresh citrus before the negotiation of concessions by the Community of the Nine in 1973, and that it could be expected that these preferences would be deepened and extended thereafter, prima facie nullification or impairment of benefits accruing under Article II in the sense of Article XXIII:1(b) could not be concluded on the basis of past precedents.
(g) One of the fundamental benefits accruing to the contracting parties under the General Agreement was the right to adjustment in situations in which the balance of their rights and obligations had been upset to their disadvantage. The Panel considered that the balance of rights and obligations underlying Articles I and XXIV of the General Agreement had been upset to the disadvantage of the contracting parties not parties to these agreements. The United States was therefore entitled to offsetting or compensatory adjustment to the extent that the grant of the preferences had caused substantial adverse effects to its actual trade or its trade opportunities.
(h) Tariff preferences were obviously less favourable to a non-beneficiary exporter but the existence of the EEC tariff preferences in itself could not be presumed in the light of the conclusions contained in (d) and (f) above, as prima facie evidence of injury to trade or of adverse effect on trade based on past precedents.
(i) It could not be concluded on the basis of available evidence, that the EC tariff preferences accorded to certain Mediterranean countries on fresh tangerines, fresh grapefruit, dry pectin, grapefruit segments, orange juice, grapefruit juice and lemon juice had operated in practice to affect adversely US trade in these products with the EC and upset the competitive relationship between the United States and the EC's Mediterranean suppliers.
(j) On the basis of all the available evidence taken together, it appeared that the EC tariff preferences accorded to certain Mediterranean countries on fresh oranges and fresh lemons had operated in practice to affect adversely US trade in these products with the EC and upset the competitive relationship between the United States and the EC's Mediterranean suppliers.
(k) In light of the undetermined legal status of the EC agreements with certain Mediterranean countries under which the EC granted tariff preferences on certain citrus products and of the fact that the formation of a customs union or free-trade area had not yet been realized between the EC and the countries concerned, the benefit accruing to the United States directly or indirectly under Article 1:1 has been impaired as a result of the EEC's application of tariff preferences on fresh oranges and lemons from certain Mediterranean countries in the sense of Article XXIII:1(b). The Panel recommended that the EEC should consider limiting the adverse effect on US exports of fresh oranges and fresh lemons, as a result of the preferential tariff treatment the EEC has accorded to these products originating in certain Mediterranean countries. This could be accomplished by reducing the MFN tariff rates applied by the EEC on fresh lemons; and as regards fresh oranges, by extending the period of application of the lower MFN tariff rates and/or reducing the MFN tariff rates. In view of the passage of time on this trade problem, the EEC should take action to this effect by no later than 15 October 1985.
C/141 (04/11/1986) Status of Work in Panels and Implementation of Panel Reports - Report by the Director-General (05-06/11/1986) "The Panel was established in November 1982 at the request of the United States. Its report was transmitted to the Council in February 1985 (L/5776). It was considered by the Council at its meetings in March [C/M/186], April [C/M/187], May [C/M/187] and June [C/M/190] 1985. At the June 1985 Council meeting [C/M/190], the representative of the United States said that his authorities were convinced that further discussions in the Council would not lead to resolving the issues and that they therefore had no alternative but to seek a solution outside the GATT dispute settlement procedures. At its November 1985 meetings [C/M/193] the Council was informed that, effective 1 November 1985, the United States had increased its tariffs and imports of pasta to redress the imbalance created by the non-resolution of the dispute on citrus products and that the European Economic Community, in response to the United States measures, had increased its tariffs on imports of lemons and walnuts from the United States. These tariff increases were withdrawn in August 1986 when the parties to the dispute concluded ad referendum an agreement settling the dispute. The terms of this settlement have not yet been notified to the GATT."