Judgment_paragraph 1. · Edeka Zentrale AG v Federal Republic of Germany (245/81)

1.Edeka submits that Regulation (EEC) No 1102/78 is in breach of the prohibition of discrimination contained in Article 40 (3) of the EEC Treaty which is a specific illustration of the principle of equal treatment in the sphere of the law relating to the organization of the markets.In so far as it suspends the issue of impon licences in respect of preserved mushrooms originating in all nonmember countries except the People's Republic of China, the regulation also offends against the precept laid down in Article 40 (3) accordine to which the common organization of the markets is to be limited to the pursuit of the objectives set out in Article 39 of the EEC Treaty. Inherent in that precept is that, within the context of its legislative practice, the Commission may adopt no measure which belongs exclusively to the realm of external trade policy.Edeka states that the prohibited discrimination stems from the fact that Edeka , was placed at a disadvantage in relation to other importers who, during the period in question, maintained trading relations with the People's Republic of China and on the basis of the regulation were able to effect direct imports of preserved mushrooms. On the other hand Edeka had to purchase its supplies at secondhand from other direct importers at a price increased by the importing margin which resulted in an imbalance in competitive conditions. The discriminatory treatment of traders established within the Community is therefore indirectly attributable to the discriminatory treatment accorded to nonmember supplier countries.In its judgment of 2 July 1974 in Case 153/73 Holtz & Wiltemsen GmbH v Council and Commission of the European Communities [1974] ECR 675 the Court of Justice declared that the various factors involved in the common organization of the markets such as protective measures and the like may be treated differently only in terms of objective criteria which ensure a proportionate distribution of advantages and disadvantages for those concerned.In the light of that judgment the different treatment brought about by the regulation in question cannot be regarded as being justified on objective grounds. By exempting merely the People's Republic of China, but not South Korea and Taiwan, from the suspension of the issue of licences the regulation failed to discriminate on the basis of objective criteria. In that connection Edeka denies that the People's Republic of China gave an assurance that they would voluntarily restrict exports in 1979 to a predetermined level and alleges further that Korea and Taiwan were not likewise requested by the Commission to give an assurance of voluntary restraint.On no account ought South Korea and Taiwan to have been entirely excluded from supplying preserved mushrooms in disregard of existing trading and supply relations with undertakings established in the Community. It would have been more appropriate to allocate to those countries automatically a quantity corresponding to the quantities supplied up to that time. That is implied by the principles of freedom of external trade and proportionality and by the principle that traditional trading relations are to be maintained. The latter principle found recognition inter alia in Article 12 (2) of Council Regulation (EEC) No 926/79 of 8 May 1979 on common rules for imports (Official Journal 1979, L 131, p. 15) and in Article XIII (2) of the General Agreement on Tariffs and Trade (GATT).In the alternative Edeka submits that the Commission, in accordance with the principle of equal and countinuing access to quotas, first ought to have ensured that undertakings importing from Taiwan and South Korea were able to have access to the imports from nonmember countries which remained, namely those from the People's Republic of China. The principle of equal treatment of all Community citizens in the allocation of a Community tariff quota has been recognized by the Court of Justice in judgments of 12 December 1973 in Case 131/73 Grossoli [1973] ECR 1555, 23 January 1980 in Case 35/79 Grossoli [1980] ECR 177 and 13 March 1980 in Case 124/79 Van VTalsum [\9t0] ECR 813.