Bilateral safeguard clause of the EU-Mercosur Partnership Agreement and the EU-Mercosur Interim Trade Agreement for agricultural products

PURPOSE: to incorporate into EU law the safeguard provisions included in the EU-Mercosur Partnership Agreement and in the EU-Mercosur Interim Trade Agreement for agricultural products.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure on an equal footing with the Council.

BACKGROUND: The EU-Mercosur Interim Trade Agreement and the EU-Mercosur Partnership Agreement grant preferential treatment to products originating in or destined for Mercosur countries and include bilateral safeguard clauses for the temporary withdrawal of tariff preferences. The specificities of some agricultural products subject to these Agreements, as well as the vulnerable situation of the Union's outermost regions require ad hoc provisions.

Both agreements grant to products originating in or destined to Mercosur countries preferential treatment, while protecting Union producers of sensitive commodities in the agriculture sector by limiting preferences to tariff rate quotas. The bilateral safeguard clauses included in both agreements allow for the temporary withdrawal of tariff preferences to counteract possible negative impacts of the tariff reductions, including for products whose market access is constrained by the limits contained in tariff rate quotas. A delay in applying justified safeguard measures could lead to injury to Union farmers in one or more Member States that could be difficult to remedy.

CONTENT: this proposal for a Regulation constitutes the legal instrument for the implementation of the safeguard clauses of the EU-MERCOSUR Partnership Agreement and the EU-MERCOSUR Interim Trade Agreement. It lays down procedures to guarantee the timely and effective implementation of bilateral safeguard measures for agricultural products. It includes specific provisions as regards certain sensitive agricultural products.

Safeguard measures are only to be considered where the product in question is imported into the Union in such increased quantities, in absolute terms or relative to Union production, and under such conditions as to cause or threaten to cause serious injury to Union producers of like or directly competing products.

The proposal includes:

- regular monitoring of sensitive product markets by the Commission, with the cooperation of Member States and industry stakeholders, to assess import trends and their impact;

- the opening of investigations in response to requests from Member States or representatives of Union industry where there is evidence of serious harm or a threat of serious harm, as well as the accelerated opening of investigations specifically concerning sensitive products;

- the possibility for the Commission to adopt prior surveillance measures to monitor import trends that may lead to situations justifying safeguard measures;

- the establishment of provisional safeguard measures in critical circumstances where a delay could cause irreparable harm and specifies the conditions and duration of these measures;

- the establishment of definitive safeguard measures when investigations confirm the criteria for defining serious harm, while taking into consideration the protection of confidential information;

- the duration and potential extension of safeguard measures, ensuring that they are applied only to the extent necessary to protect Union industry. The total duration of a safeguard measure shall not exceed four years, including the

period of application of any provisional safeguard measure.

The Commission should submit an annual report to the European Parliament and the Council on the application, implementation and compliance with the obligations contained in the regulation.