26.4.2002 Official Journal of the European Communities L111/1 (Acts whose publication is obligatory) COUNCIL REGULATION (EC) No 704/2002 of 25 March 2002 temporarily suspending autonomous Common Customs Tariff duties on imports of certain indus- trial products and opening and providing for the administration of autonomous Community tariff quotas on imports of certain fishery products into the Canary Islands THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 299(2) thereof, Having regard to the proposal from the Commission ('), Having regard to the opinion of the European Parliament (%), Having regard to the opinion of the Economic and Social Committee, Having regard to the opinion of the Committee of the Regions, Whereas: 1) In October and November 2000 the Spanish authorities asked to maintain the Common Customs Tariff (CCT) measures for the Canary Islands first introduced by Council Regulation (EEC) No 1911/91 of 26 June 1991 on the application of the provisions of Community law to the Canary Islands (}), which expired on 31 December 2001, for another period of 10 years and submitted some documentation justifying their request. However, the time to evaluate the documentation was insufficient to reach a definitive conclusion as to whether main- taining the measures for the requested period was still justified. The application of the tariff measures was therefore prolonged for one year by Council Regulations (EC) No 1105/2001 of 30 May 2001 amending Regulation (EEC) No 1911/91 (4 and (EC) No 11062001 of 30 May 2001 extending the period of application of Regulation (EEC) No 3621/92 temporarily suspending the auto- nomous Common Customs Tariff duties on imports of certain fishery products into the Canary Islands and Regulation (EC) No 527/96 temporarily suspending the autonomous Common Customs Tariff duties and progressively introducing the Common Customs Tariff duties on imports of certain industrial products into the Canary Islands (°). Since the introduction of specific measures for the Canary Islands in 1991 the economic situation of the region has significantly improved. Average income of () O] C 75 E, 26.3.2002, p. 343. (*) Opinion delivered on 5 February 2002 (not yet published in the Official Journal). () O] L 171, 29.6.1991, p. 1. () O] L 151, 7.6.2001, p. 1. () O] L 151, 7.6.2001, p. 3. workers and employees have almost reached the corre- sponding averages of Spain. Unemployment has fallen to levels which correspond to the Spanish average (around 12 %) and the gap in the living standard of the people between the Islands and Spain has almost been closed. This development was mainly due to the enormous increase in the tourist sector and the commerce related to it and to improvements in the agricultural sector. At the same time, however, it was noted that develop- ment of the manufacturing sector stayed significantly behind the other two sectors and is in danger of being completely sidelined. The contribution of this sector to the gross national product (GNP) of the Canary Islands has fallen in the last two years to less than 6 % of the local GNP. The reasons for this decrease will be explained below. A further decrease in this area of economy bares the risk that the overall economic situa- tion becomes more vulnerable in view of a certain vola- tility of international tourism on which the islands are more and more dependent. Until now the industrial sector in the Canaries mainly produces for the local market of the islands and has, despite its vicinity to the African continent, enormous difficulties in finding customers for its products outside the islands. This difficult situation is mainly caused by a lack of transport means and the high level of transport costs for the purchase and the distribution of goods. This has a negative impact on the manufacturing costs of finished goods which can lead to an increase in manufacturing costs of up to 12 % compared to manu- facturing costs of similar companies on the Spanish peninsula depending on the type of product. In addition, the development of energy prices and its worldwide impact on transport costs in the last two years has certainly contributed to a further deterioration of the competitive situation of the industrial sector on the islands. Furthermore, at the same time the advantages resulting from autonomous tariff suspensions introduced since 1991 in order to support the development of this sector were continuously reduced. This had the effect that the competitiveness of the local industries in rela- tion to its competitors on the Spanish mainland and the rest of the Community suffered severely.