_BULLETIN- / o~'THE . I I ' i \ \ ~- EUROPEAN.·· \. COMMUNITIES /" / I ; f I \ ecsc ~/- _eec··~· eaec/ ' . ) r SEPTEMBER/OCTOBER 1969 VOLUME 2 No. 9/10 SUBSCRIPTION AND SINGLE COPY PRICES r. $ FB FF DM Lit. Fl. Annual subscription (Bulletin + Supplement + Index) 2.1.6 5.00 250.- 27.80 20.- 3 120 18.- Bulletin (incl. Supplement) 0.4.0 0.50 25.- 2.80 2.- 310 1.80 Supplement to Bulletin or Index 0.2.6 0.30 15.- 1.70 1.20 180 1.10 The annual subscription runs from 1 January to 31 December of each year. Payment to be mode only to the agents in the countries listed an p. 3 af the cover. For air subscription rates, please apply ta the agents. 9/10-1969 BULLETIN of the European Communities SECRETARIAT OF THE COMMISSION This Bulletin is published monthly by the Secretariat of the Com­ mission of the European Communities (200, rue de la Loi, Brussels 4). It appears in the four Community languages, in English and in Spanish. It gives news of the activities of the Commission and the other institutions of the three Communities: European Coal and Steel Community (ECSC), European Economic Community (EEC) and European Atomic Energy Community (Euratom). This issue covers the activities of the European Communities m July and August 1969. Contents I Page Significance of the new Agreements concluded with the AASM and the East \ African Community, by M. Henri Rochereau, member of the Commission 5 ! Chapter I: Tax harmonization and the Common Market: an address by M. Hans von der Groeben, member of the Commission, to the European Parliament 9 u·. Chapter II: The financing of Community activities from the Community's z I I own resources 13 - I ~~ I l Chapter III: The EEC's relations with Latin America 17 0 ( N I - I ~ p::; 1 Chapter IV: Community action in the matter of right of establishment: I balance-sheet and outlook 19 I ::c l 0... ( ~ Chapter V: Establishment and operation of the single market 25 en i l 0 l - Free movement of goods 25 i - ( - Competition policy 28 l l - Taxation policy 36 ( I - Approximation of legislation and creation of European law by conventions 38 t 'i ( Chapter VI: Towards economic union l 41 ( - Economic, monetary and financial policy 41 l I - Agricultural policy 46 \ --- - Scientific, technical and nuclear research policy 54 - Energy policy 59 - Transport policy 60 - Regional policy 63 - Social policy 63 Chapter VII: The Community and the Associated States 69 -Greece 69 -Turkey 69 - African States and Madagascar and Overseas Countries and Territories 70 9/10- 1969 I Chapter VIII: The Community, non-member countries and international organizations 75 - Applications for membership 75 - Bilateral relations 75 - Commercial policy 77 - The Community and the developing countries 79 - Relations with international organizations 82 - International agreements in the nuclear field 83 Chapter IX: Institutions and organs 85 - The European Parliament 85 - The Council 101 - The Commission 109 - Court of Justice 110 - The Committee of Control 113 Chapter X: European Investment Bank ' 115 Miscellaneous 119 Published in the official gazette 125 Recent publications of the Communities 201 Recent publications 205 Bibliographical notes 206 Supplement: Opinion submitted to the Council concerning the applications for membership from the United Kingdom, Ireland, Denmark and Norway. 4 9/10- 1969 Significance of the new agreements concluded with the AASM and the East African Community by M. Henri ROCHEREAU, member of the Commission At dawn on Saturday 28 June, after a final night of negotiations, the twenty-four ministers representing the contracting parties to the Yaounde Convention initialled the text of the new Convention, thus signifying that the negotiations had been concluded by unanimous agreement. In order to affirm symbolically the continuity of this Association, which started in 1958 with the Treaty of Rome and achieved inter­ national status at Yaounde, where the first Convention was signed on 20 July 1963, the African States and Madagascar chose the capital of Cameroon once again for the signing ceremony on 29 July 1969. It is now for the contracting parties to ratify the agreement at national level. That is why, while it is not possible to fix a date for the entry into force of the new Convention, it has been established that it will expire on 31 January 1975. In this way, the Associates have obtained a kind of guarantee against any delay in ratification and at the same time the new Convention stipulates the conditions for the renewal procedure. This showed not only that the Member States had never questioned that the Association should be contin­ ued, even by endeavouring to delay its implementation, but also that they had all become aware of the specific political importance of this undertaking by declaring their unanimous determination to continue it beyond the expiry date. Consequently the structures of the Convention under Yaounde II remain substantially the same as under Yaounde I. All the provisions relating to institutions and procedures have been retained. The system of concertation practised in the Association Council, Association Committee, and Parliamentary Conference of 9/10- 1969 5 the Association, as devised in the first Convention, has given proof of its efficacy. As M. G. Thorn, the then President of the Council of Ministers of the Six, declared, "The Association possesses in its institutions a capital of reciprocal confidence and knowledge, which constitutes the best guarantee of the permanent character of this co-operation and which represents in both form and substance something new in the world." Some novel features, however, give the latest Convention a new look. In view of certain international trends concerning development aid, in particular trade, measures have been taken to give the Commu­ nity's policy unity and coherence at world and regional levels. In trade they involve a lowering of the common customs tariff for some tropical products and a reference to any provisions that may possibly be adopted in the framework of a system of generalized preferences. This world-orientated outlook of the Community was reflected in its desire to encourage regional co-operation among the Associates and between them and their neighbours in order to enable them better to withstand international competition in the spheres of capital investment and industrial promotion by enlarging their markets. Consequently, promotion of the productive sector, in particular industry, constitutes one of the most important aspects of the new Convention. The key instrument of this policy continues, of course, to be the European Development Fund, which totals $1 000 million, broken down into $918 million for the African States and Madagascar and $82 million for the Overseas Countries, Territories and Departments. The financial techniques of the EDF, the third in the series, have been improved: increased "soft" and normal loans through the intermediary of the European Investment Bank, a better system of interest rebates, possibility of acquiring holdings in firms' risk capital, utilization of local development banks, etc. The range of EDF intervention has been widened in order to permit traditional economic and social investments and also a number of trade promo­ tion measures in the form of technical co-operation and market sur­ veys in addition to action already being taken. 6 9/10- 1969 These provisions help to offset any consequences which may arise for the Associates from the reduction of certain preferences and the abolition of aid in the form of price support, although the nego­ tiations have made provision for a new form of aid to cope with exceptional situations where, for example, a drop in world prices would jeopardize an associated country's economy. These, in short, are the broad lines of action contained in the new Yaounde Convention. The spokesman of the African States and Madagascar, M. Konan Bedie, Ivory Coast minister, spoke of "historical solidarity and common determination to co-operate", stressing that free trade in both directions remains, together with dialogue in the administration of Community aid, the basis of the Association. The Community wishes to open this dialogue to the African Con­ tinent as a whole and in a declaration of intention made by the Member States on the conclusion of the first Yaounde Convention on 20 July 1963 it was agreed that any countries having economic structures comparable with those .of the Associated States could become associated with the Community. This gave rise to the Lagos Agreement with Nigeria and the Arusha Agreement with the three East African States, which was signed on 26 July 1968. The latter expired on 31 May 1969, on the same date as the Yaounde Convention, and therefore the problem of its renewal arose at the same time. The symbolic parallel character of the two negotiations was maintained to within a day or two, since the new Agreement was concluded on 9 July. It was arranged that it should be signed in Arusha on 24 September. The Agreement is simpler than the Yaounde Convention; it con­ centrates mainly on trade and the setting up of institutions modelled on the lines of those of the Yaounde Convention to manage the association. While it is not substantially different from the Agreement concluded a year earlier, it contains some differences which must be stressed. The duty-free arrangements for imports are more liberal, although there are exceptions (agricultural products similar to and competing 9/10- 1969 7 with European products) and quantitative limits for three products (coffee, cloves and tinned pineapple). The quantitative limits no longer take the shape of tariff quotas, but simply act as a safeguard device, which could come into play as soon as certain quantities have been reached. This, then, is a very important concession to the East African States.