401801 



FOREWORD 



The 'United Kingdom, Ireland, and Denmark became 

 European Community (EC) members January 1, 1973. As 

 such, they must adopt the EC's tobacco pohcies. These now 

 include a Common Agricultiiral Policy (CAP) for tobacco, a 

 common external tariff (CXT) on tobacco and 'tobacco 

 products, preferential tariff treatment on tobacco imports 

 from associated countries, provisions for harmonization of 

 the excise tax on tobacco products by stages, and continua- 

 tion of monopoly control over tobacco products retailing in 

 Italy and France. 



The EC, in mid- 1 970, adopted a Common Agricultural 

 Policy for tobacco. The CAP provides: Guaranteed high 

 prices with no automatic production controls; a lucrative 

 buyer's premium for purchasers of EC leaf; an export 

 subsidy; and limitations on imports by a safeguard clause. 

 The CAP is expected to encourage tobacco production in 

 the six EC countries, especially in Italy, the largest 

 producer. 



The EC at present has a common external tariff (CXT) 

 which discriminates against high-quality leaf such as that 

 imported from the United States. The new members will 

 soon begin phasing in this CXT on tobacco imports from 

 outside the EC and reducing to zero their tariffs on tobacco 

 imports from other EC partners and from countries 

 receiving preferential treatment for tobacco exports to the 

 EC. The latter countries include such important tobacco 

 exporters as Greece, Turkey, and Tanzania. By July 1, 

 1977, the United States will be facing the CXT for tobacco 

 exports to these three members while tobacco from 

 countries which produce about 1 bilhon pounds is expected 

 to be duty-free. 



The EC now grants duty-free treatment for tobacco 

 imports from the Associated African and Malagasy States, 

 the Overseas Countries and Territories, and the East African 

 countries (Tanzania, Kenya, and Uganda). Greece and 

 Turkey, as associate EC members also get duty-free 

 treatment for their tobacco exports to the Community. 

 Three of these (Tanzania, Kenya, and Uganda) already 

 receive preferential treatment for tobacco exports to the 

 United Kingdom and all may eventually receive duty-free 

 treatment in each of the other two new members. In 

 addition, the United Kingdom plans to bring in a number of 

 Commonwealth members to which it now gives preferential 

 treatment for tobacco imports and which eventually may 



