Spain and the European Community

5/78 SPAIN AN D THE EUROPEAN COMMUNITY CONTENTS 1. Spain s eques o membe ship o he Communi y . . . . . . . . . . . . . . . . . . . . . . . . . 2. TheSpain-EECT adeAg eemen ..................................,.... 3. Modi ica ion o he T ade Ag eemen .............,................." 4. A numbe o sec o al p oblems: ishing, ex iles and oo wea , s eel. ............. Annex: Economic p o ile o Spain and ade wi h he Communi y. . . . . . . . . . . . . . . . . . . . . . . . . Rep oduc ion au ho ized, wi h o wi hou indica ion o o igin. Vouche copies would be app ecia ed. May 1978 On he occasion o he o icial isi by M Roy Jenkins, P esiden o he Commission o he Eu opean Communi ies, o Mad id on 27 and 28 Ap il 1978, he p esen in o ma o y memo andum assesses ela ions be ween Spain and he Eu opean Communi y. NOTICE Subsc ibe s o 'EUROPE-INFORMATION' a e eques ed o no e ha om .Issue No 1/78 his publica ion will be dis ibu ed by he se ices o he O ice o O icial Publica ions in Luxembou g. Any change o add ess should be no i ied o: M MARASCHIN OFFICE FOR OFFICIAL PUBLICATIONS OF THE EUROPEAN COMMUNITIES, Boi e Pos ale 1003 5, ue du Comme ce L - LUXEMBOURG Howe e , any eques s o new subsc ip ions o addi ional in o ma ion conce ning his publica ion should be add essed o: COMMISSION OF THE EUROPEAN COMMUNITIES Spokesman s G oup and Di ec o a e-Gene al o In o ma ion Publica ions Dis ibu ion Se ice Be laymon 2 - 27 Rue de la Loi, 200 1049 BRUXELLES Tel. 7350040 ex . 5120 o 2346 1. SPAIN'S REQUEST FOR MEMBERSHIP OF THE COMMUNITIES On 17 Feb ua y 1976 he Spanish Minis e o Fo eign A ai s, M de A eilza, isi ing B ussels sho ly a e he h oning o King Juan Ca los, in o med M O oli, hen P esiden o he Eu opean Commission, and Si Ch is ophe Soames, Vice-P esiden esponsible o ex e nal ela ions, ha Spain would be able o eques accession o he Communi y once he g adual p ocess o in oducing democ acy in o he con y was comple ed. These p ospec s could no come as a su p ise o he Communi y which had o a long ime e used any kind o ins i u ional link wi h Spain on he g ounds ha i s egime was no democ a ic. I was on 28 July 1977, immedia ely a e he June elec ions, ha M O eja Agui e, he new Spanish Minis e o Fo eign A ai s, o icially p esen ed P esiden Sua ez s le e s con aining his coun y s eques o accession o he P esiden -in~O ice o he Council, he Belgian Minis e M Simone . On he p e ious day he Spanish Minis e had me wi h he Commission P esiden , M Jenkins, and also wi h Mess s Na ali and Ha e kamp, Vice-P esiden s esponsible o ques ions co e ing enla gemen and ex e nal ela ions, espec i ely. This eques came wo yea s a e G eece s eques (June 1975) and ou mon hs a e Po ugal's eques (Ma ch 1977). The Commission exp essed sa is ac ion a Spain s desi e and on 20 Sep embe he Council ga e o icial ackhOwledgmen o eceip . The Council hen asked he Commission o d aw up, in con ac wi h Spain and membe coun ies, i s opinion p io o he opening o nego ia ions. On 4 No embe , he Spanish P ime Minis e , M Sua ez, isi ed he Commission, ollowing alks in he capi als o he a ious membe coun ies. The P esiden , M Jenkins, oge he wi h M Na ali con i med, on his occasion, he impo ance hey a ached o inding sa is ac o y solu ions o he p oblems in ol ed in in eg a ing Spanish ag icul u e and indus y. Du ing an o icial isi o Mad id om 13 o 15 Feb ua y 1978 Vice-P esiden Na ali had alks, in an excep ionally good a mosphe e, wi h King Juan Ca los and hose in leading poli ical pos s, inCluding Mess s Sua ez, O eja Agui e and Cal o So elo, who had been appoin ed Minis e in cha ge o Rela ions wi h he Communi y. On his occasion M Na ali s essed he ac ha since he Communi y and Spain had aken he poli ical choice in a ou o enla gemen his should p omp he sea ch o solu ions o economic p oblems which could be c ea ed by accession. M Cal o So elo hen paid a isi o B ussels on 8 and 9 Ma ch 1978 in o de o wo k ou , wi h he Commission, p ac ical aspec s o coope a ion o pu poses o d awing up an opinion on he eques o membe ship and, in pa icula , o pupply he Commission wi h in o ma ion. This opinion is expec ed o be published in ea ly 1979. 2. THE SPAIN-EEC TRADE AGREEMENT E e since 1962 Spain had asked he Communi y o s a up nego ia ions wi h a iew o an Associa ion Ag eemen which could lead on o accession. On he basis o he p eamble o he T ea y o Rome ('... esol ed... o p ese e and s eng hen peace and libe y, and calling upon he o he peoples o Eu ope who sha e hei ideal o join in hei e o s ...') he Communi y did no eel i could mee he eques s o he Spanish go e nmen a he ime. A new eques was submi ed by Spain in 1964 and explo a o y alks we e held om 1964 o 1966 wi h a iew o nego ia ing an ag eemen o a s ic ly comme cial na u e. Ac ual nego ia ions .s a ed in Sep embe 1967 a e he Communi y Council o Minis e s had adop ed ini ial nego ia ion guidelines in July. Nego ia ions we e o be ca ied ou by he Eu opean Commission in .acco dance wi h s anda d p ac ice. The nego ia ions we e comple ed on 12 Ma ch 1970 a e he Council had speci ied and ex ended i s e ms o e e ence du ing i s session on 17 Oc obe 1969, The Spain-EEC T ade Ag eemen . concluded on he basis o A icle 113 o he T ea y o Rome, was signed on 29 June 1970 and came in o o ce on 1 Oc obe ha same yea . 2 This p e e en ial ag eemen 1 C . Commission communica ion o he Council on 19 Ap il 1978 gi ing o e all conside a ions on he p oblems o enla gemen . 2 EEC OJ L 182 o 1970. was aimed a phasing ou he essen ial ba ie s o ade o e an ini ial s age las ing a leas 6 yea s whils espec ing GATT decisions. A second s age, he p ac icali ies o which a e no de ined, would be subjec o nego ia ions be ween bo h pa ies. A Join Commi ee was se up in o de o ensu e ha he ag eemen was duly implemen ed. Ei he pa y could wi hd aw om his Commi ee wi h a six mon h pe iod o no ice. I did no co e he coal and s eel sec o which came unde he ECSC T ea y. Unde he e ms o he Ag eemen Spain unde ook o phase ou i s impo du y on Communi y p oduc s o e a pe iod unning om 1 Oc obe 1970 o 1 Janua y 1977. On his inal da e du y would be educed o he ollowing pe cen age o i s o iginal le el: (i) 60% o speci ic ag icul u al p oduce, o e, wood, aw co k, ex ile ib es e c. Which in 1968 accoun ed o 4% o Communi y expo s o Spain and we e subjec o cus oms du y o 8.2% 011 a e age; (ii) 25% o a la ge numbe o indus ial p oduc s and speci ic ag icul u al p oduce (22% o Communi y expo s, subjec o an a e age du y a e o 17.7%); (Hi) 25% o 'sensi i e' p oduc s such as plas ics, au omobiles, machines and elec ical appliances (34. o Communi y expo s, a e age a e o 28.5%). Fo he mos sensi i e p oduc s, such as pape pulp, pape and ca d, he e was no p o ision o educ ion. Special o mulas had, mo eo e , been wo ked ou o dai y p oduce. Spain he eby unde ook o buy a leas 30% o i s bu e impo s om he Communi y as om 1 Janua y 1976. The Communi y o i s pa unde ook o phase ou quo a es ic ions and o g adually educe i s cus oms du y on Spanish indus ial goods as om 1 Oc obe 1970. Du y was o be educed by: (i) 60% o i ually all indus ial p oduc s on 1 Janua y 1973; (ii) 40% o a dozen indus ial p oduc s, including lea he shoes and speci ic ex iles on 1 Janua y 1977. In addi ion, o he ag icul u al sec o , a i concessions we e g an ed o ci us ui s (40% unde ce ain condi ions), un e ined oli e oil and he ollowing wines: She y, Malaga (50%), Jumilla, P io a o, Rioja and . Valdepenas (30%), in he amewo k o quo as. A numbe o ypes o ish, mea and ui and ege ables also bene i ed om educ ions anging om 25 o 100%, bu gene ally a a le el o 50% o hei o iginal du y le el. In he ag icul u~al sec o wo- hi ds o Spanish expo s o he Communi y we e co e ed by p e e ences. Fo he emaining p oduce he ag eemen was in en ionally unbalanced in Spain s a ou so ha i s young indus y, p o ec ed by highe a i s, would gain easie access o he Communi y ma ke . I will be seen, in ac , ha as a as he indus ial sec o is conce ned, he Ag eemen b ough abou an a e age educ ion o 55% o he Communi y s a e age cus oms du y a e o 8%, and a educ ion o only 25% o he Spanish a e age a e o 25%; 3. MODIFICATION OFTHE TRADE AGREEMENT Sho ly a e he Ag eemen came in o o ce he Spanish au ho i ies and he Communi y ocused hei a en ion on he epe cussions ha he accession o new Membe S a es o he Communi y would ha e ~ in pa icula he accession o he Uni ed Kingdom. The Uni ed Kingdom was in ac he main expo ma ke o Spanish ag icul u al p oduce, which was, in many cases, no co e ed by he Ag eemen . The Uni ed Kingdom a i was going o be aised o b ing i in o line wi h ha o i s new pa ne s. I was e y quickly seen ha Spain could no ag ee o a simple echnical ex ension o he Ag eemen o co e he new membe coun ies and ha Spain wished, on he con a y, o p oceed o undamen al modi ica ion o he Ag eemen o make allowance o all he implica ions o enla gemen . Nego ia ions aimed a a new Ag eemen wi hin he amewo k o he Communi y s Medi e anean policy we e hus held om July o Oc obe 1973 and in No embe 1974, a e a P o ocol p o iding o empo a y non-applica ion o he 1970 Ag eemen o he new Membe S a es had been signed on 29 Janua y 1973. These nego ia ions esul ed in deadlock, wi h he Communi y p oposing ee ade o indus ial goods oge he wi h new concessions in he ag icul u al sec o , whils Spain wished o ha e a link be ween ee ade in he indus ial and ag icul u al sec o s. A comp omise was beginning o come o ligh a he s a o 1975 bu nego ia ions we e b oken o by he Communi y who wished o use his as a means o p o es ing agains iola ion o human igh s in Spain. A e King Juan Ca los I came o he h one on 27 No embe 1975 con ac s we e aken up again. M de A eilza, he new Spanish Minis e o Fo eign A ai s, paid an o icial isi o he Commission on 17 Feb ua y1976. M Cal oSo elo, Minis e o T ade, ollowed him on 27 Ap il wi h a iew o examining ways and means o adap ing he Ag eemen o he enla ged Communi y. Since he Spanish Go e nmen had made i known since he s a o 1976 ha i wished o iew i s ela ions wi h he Communi y on he basis o apid accession o he EEC, i soon became appa en ha i was poin less a emp ing o ul il he aim o ee ade h ough modi ica ion o he Ag eemen . The Commission submi ed a p oposal o he Council o he e ec ha i would be be e o nego ia e an addi ional P o ocol o he 1970 T ade Ag eemen , o be alid up o he end o 1981. In addi ion o p o iding o ex ension o he p o isions o he Ag eemen o co e he Uni ed Kingdom, Denma k and I eland, he P o ocol should also allow o mu ual, limi ed educ ion in cus oms du y, u he concessions in he ag icul u al sec o in Spain s a ou and also p o ide o a sys em co e ing ade in he coal and s eel sec o . A e he Council had issued i s di ec i es ela ing o modi ica ion o he Ag eemen in he ligh o Communi y expansion in Ap il 1977, nego ia ions we e aken up again in May. An exchange o le e s be ween he wo pa ies shows on 25 July ha he p o isions o he ag eemen be ween he h ee new Membe S a es and Spain we e implemen ed au onomously on 1 July ~ he da e on which he ansi ional pe iod ixed o he Uni ed Kingdom, Denma k and I eland expi ed. Only a numbe o ag icul u al p oduc s impo ed by he Uni ed Kingdom would con inue o be subjec ed o he old impo sys em up o 31 Decembe 1977 - he end o he ansi ional pe iod o hese p oduc s. In Decembe 1977 he Council adop ed nego ia ion di ec i es co e ing adap a ion and ex ension o he Ag eemen . Nego ia ions s a ed up again on 8 Feb ua y 1978. The Communi y el ha he imbalance in indus ial bene i s ins i u ed by he Ag eemen should be e iewed in he ligh o de elopmen s in Spanish indus y since he end o he 1960s. Spain, o i s pa , showed a willingness o g an concessions as a as i s cus oms a i s on indus ial goods we e conce ned, bu only i i we e g an ed su icien concessions o ag icul u al p oduce in e u n. This was i s ly o make all'3wance o concessions g an ed by he Communi y o o he non-Communi y, Medi e anean coun ies and secondly, o o se he losses ha Spain ea ed i would su e on he B i ish ma ke . Con ac g oups we e se up o look in o he p oblems in ol ed in managemen o he Ag eemen and o u he speci y he di ec ions ha bo h delega ions should ake. 4. A NUMBER OF SECTORAL PROBLEMS (a) Fishing Following he ex ension o ishing-zone limi s o Communi y Membe S a es o he A lan ic coas u he o conce ed ac ion, he Commission ecei ed au ho iza ion o s a nego ia ions wi h non- Communi y coun ies ela ing o access o ishing esou ces and he equisi e managemen measu es, in pa icula as a as he conse a ion o ce ain species was conce ned. Whils awai ing he conclusion o amewo k ag eemen s he Communi y has aken au onomous measu es on a empo a y basis. Hence, whils he nego ia ions s a ed wi h Spain in 1976 a e con inuing, Council egula ions ha e se up a licence sys em, o which ships lying he Spanish lag ha e been subjec since Ap il 1977. In 1978 he mon hly quo a o hake alloca ed o Spanish ishe - men was hus ixed a some 3 000 onnes - a conside able educ ion compa ed wi h 1977. This educ ion, wa an ed by he need o sa egua d halieu ic esou ces, is equal o ha imposed on Communi y ishe men. (b) Tex iles and oo wea A he end o 1977 he Communi y concluded some wen y i e-yea ag eemen s wi h non- Communi y coun ies, in he amewo k o he In e na ional A angemen on T ade in Tex iles. These we e aimed a gua an eeing and in oducing discipline in o ex ile expo s o he Communi y om coun ies whose p oduc ion capaci y seemed o be h ea ened in he sho e m by compe i ion om la ge-scale supplie coun ies. The si ua ion is ob iously mo e complex in he case o coun ies wi h links wi h he Communi y in he o m o p e e en ial ag eemen s. The Commission and Spain exchanged lis s o p oduc s ( ou een on bo h sides) which hey el o be in a pa icula ly sensi i e posi ion. Discussions con inued wi h a iew o eaching an a angemen whe eby bo h pa ies would adop a con e gen app oach aimed a p e en iog ecou se o spo measu es, whils e aining hei au onomy as a as indi idual comme cial policy was conce ned. I should be no ed ha he Communi y has likewise jus decided o se up an a p io i Communi y moni o ing scheme o all supplie coun ies, co e ing impo s o oo wea , whils awai ing he in oduc ion o a mo e lexible sys em on 1 Oc obe nex which will ob ia e he need o a licence p io o impo . (c) S eel A adi ional impo e o Communi y s eel p oduc s, Spain has also apidly become he second la ges supplie o s eel o he Communi y, a e Japan. On bo h sides, ade in s eel, which is ela i ely well- balanced, amoun s o some one million onnes. Wi h a iew o p ese ing his balance unde he p esen c isis condi ions, each pa ne has aken au onomous measu es. The Commission, ac ing on he basis o he ECSC T ea y, has no ably subjec ed Spanish gal anized shee s eel, hea y pla e and sec ions o empo a y an i-dumping du y. Measu es o his kind ha e likewise been aken in ade wi h a la ge numbe o o he coun ies. In applica ion o he Council decision o 19 Decembe 1977, he Commission s a ed nego ia ions wi h Spain on 24 Janua y 1978, wi h a iew o eaching an ag eemen which main ains adi ional ade ci cui s and ensu es, in pa icula , ha Spanish expo e s obse e he minimum p ices ixed by he Commission o Communi y p oduce s, al hough making allowance o a ce ain scope o pene a ion. These nego ia ions esul ed in an Ag eemen which was ini ialled on 24 Ap il. ANNEX Economic p o ile o Spain and ade wi h he Communi y Spain has a popula ion o almos 36 million o a e i o y o 505 000 km , i.e. a popula ion densi y o jus abo e 70 inhabi an s pe squa e kilome e. The popula ion igu e is expec ed o exceed 39 million in 1985. Ou o a wo king popula ion o 13341 900 in 1976, 27% we e women. The pe cen age o ac i e popula ion in ol ed in ag icul u e ell om 40% in 1960 o 23% in 1975, wi h indus y now p o iding 38% o jobs and he se ices 39%. The pe cen age o g oss domes ic p oduc made up by ag icul u e d opped om 24 o 12% o e he pe iod 1960 o 1975. Ranking second a e F ance, in Wes e n Eu ope, in e ms o a ailable ag icul u al land, Spain has a de ici in bee and dai y p oduc s. I is one o he wo ld's op p oduce s o ci us ui s, wine and oli e oil. Spain anks en h among he indus ial powe s o he wo ld. By way o illus a ion o i s g ow h a e om 1960 o 1975 le us men ion bu a ew igu es: s eel p oduc ion has isen om 1.9 million onnes o 11.1 million onneS, ca p oduc ion has inc eased om 39 600 o 696 000, cemen p oduc ion has inc eased om 5.2 million onnes o 23. million onnes and inally, elec ici y om 16600 kWh o 82400 kWh. Spanish indus y is ma ked by he con as ing co-exis ence o mode n unde akings con olled by he S a e o la ge inancial holdings and a la ge numbe o small businesses wi h a lack o capi al and esou ces o esea ch and echnology. The g oss na ional p oduc was sligh ly abo e 100000 million dolla s in 1976 wi h he pe capi a income (USD 2 865) oughly equi alen o ha o I eland. This was ollowing an economic g ow h a e o on a e age 5.9% pe annum om 1965 o 1975, compa ed wi h a Communi y g ow h a e o 3.5%, A e he oil c isis, g ow h did no exceed 1% in 1975 o 1976, bu was on he up ake again in 1977 in a clima e which was, howe e , ma ked by pe sis ing unemploymen , a balance-o -paymen s de ici .and .an in la ion a e o some 25% (Decembe 1976 o Decembe 1977) which he Go e nmen would like o educe o some 16% in 1979. The b eakdown o Spain s ade wi h he es o he wo ld on a pe sec o basis was as ollows in 1976: (pe cen ): Impo s Expo s Foods u s, d ink, obacco Ene gy, lub ican s Raw ma e ials Chemical p oduc s Machines and anspo equipmen O he manu ac u ed goods 10, 29, 14. 20. 16. 20.4 24. 40. Sou ce: EEC S a is ics O ice. Mon hJyex e nal ade bulle in special issue 1958-76. The Communi y is by a Spain s la ges cus ome and supplie . I s p opo ion o Spanish expo s has emained s able, accoun ing o 47.8% in 1973 and 46.4% in 1976, whils he p opo ion o impo s ell om 42.9% in 1973 o 33. 1 % in 1976 as a esul o he inc eased p ice o oil p oduc s. T ade be ween Spain and he Communi y (USD mil/ion) Spanish Spanish T ade de ici impo s expo s 1973 4112 2463 1649 1974 5548 3360 2188 1975 5461 3432 2029 1976 5785 4048 1737 1977 i s 3 qua e s 4610 3347 1263 Sou ces: EEC S a is ics O ice. Mon hly ex e nal ade bulle in Feb ua y 1978 and special issue 1958-76. E en wi hou aking in o accoun he ou is income o igina ing om he nine EEC coun ies and ans e s sen o Spain by Spanish emig an s in he Communi y, ade be ween Spain and he Communi y, whils s ill showing a de ici , is mo e balanced ha i s ade wi h he es o he wo ld. F om 1973 o 1976 Spain s o e all impo s we e only hal co e ed by expo s, in alue e ms. The si ua ion imp o ed, howe e , in 1977, wi h he ade de ici b ough down om USD 8.7 o 7.6 housand million o e all, by i ue o a sha p inc ease in expo s (+ 17.5%) accompanied by a s agna ion in he le el o impo s (+ 1.6%, i.e. oughly -8% in eal e ms). As o he de ici in he CU en balance o paymen s ~ his has been educed om USD 4.3 o 2.5 housand million