EURO-MEDITERRANEAN ASSOCIATION AGREEMENT
Draft Council Decision on the signature of a Euro-Mediterranean Association Agreement between the European Communities and their Member States and the Arab Republic of Egypt on behalf of the European Community.
Draft Council Decision on the conclusion of a Euro-Mediterranean Association Agreement between the European Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the other part Volume I/II.
||Article 310 EC; unanimity
||9 April 2001|
|Forwarded to the Council:
||9 April 2001|
|Deposited in Parliament:
||20 June 2001|
||Foreign and Commonwealth Office
|Basis of consideration:
||Minister's letter of 26 April and EM of 9 July 2001
|Previous Committee Report:
|Discussed in Council:
||25 June 2001|
39.1 On 19 December 1994 the Council approved
a mandate for the Commission to negotiate a new Euro-Mediterranean
Association Agreement with Egypt. The Agreement will widen the
scope of the Co-operation Agreement signed in 1977, which it will
replace. The two proposals considered here constitute the legal
instruments for the signature and conclusion of this Agreement.
The Commission proposes that the Council both signs the Agreement
and then, after the assent of the European Parliament has been
obtained, takes a decision authorising conclusion of the Agreement
by the EC. The Commission should conclude the Agreement on behalf
of the European Coal and Steel Community (ECSC).
39.2 Introducing the instruments, the Commission
recalls that the Council adopted negotiating directives in 1994.
The progress of negotiations was "extremely slow", with
ten revisions of the draft texts over the four and a half years.
Following what it describes as "considerable pressure"
from the EC and the Presidency on the Egyptian side to make progress,
a final package was agreed in June 1999 and endorsed by the General
Affairs Council (GAC) the same month.
39.3 The EC at that point considered the negotiations
to be closed and expressed itself ready to initial the final draft.
The Egyptian side also considered negotiations to be closed but
delayed initialling for 18 months because of problems in finding
a consensus in cabinet. On 26 January 2001 the final draft was
initialled by both sides in Brussels. It was signed by the Member
States in the margins of the GAC on 25 June.
39.4 The Commission suggests that the proposed
Agreement will open a new era in bilateral relations and will
consolidate the Euro-Mediterranean partnership launched by the
1995 Barcelona Declaration. It expects the Agreement to contribute
to peace and security in the region and to stimulate trade and
economic relations between Egypt and the EU, and between Egypt
and its Mediterranean partners.
The proposed Agreement
39.5 The Agreement, which is for an unlimited
period, is the fifth Euro- Mediterranean Association Agreement
to be concluded under the EU's Mediterranean policy since it was
launched at Essen in 1994. The Commission's explanatory memorandum
sets out the main elements, but in his Explanatory Memorandum
of 9 July 2001, the Minister of State at the Foreign and Commonwealth
Office (Mr Peter Hain) gives a fuller account. He says that, inter
alia, it will provide for:
"(a) a regular political
dialogue, in particular at Ministerial and senior official level.
Respect for democratic principles and human rights will be an
essential element of the agreement;
"(b) the progressive establishment over
12 years of a Free Trade Area, in accordance with WTO rules, including
liberalisation of trade in industrial products, and further liberalisation
of trade in agricultural products;
"(c) a safeguard clause and an anti-dumping/countervailing
clause confirming the Parties' right to take action in accordance
with the GATT;
"(d) Provision for the extension of the
Agreement to cover establishment of companies and trade in service,
taking account of obligations arising out of the General Agreement
of Trade in Services (GATS);
"(e) Further removal of restrictions on
the movement of capital between the Community and Egypt;
"(f) The introduction of rules within five
years of the entry into force of the agreement in relation to
competition within the Free Trade Area;
"(g) Protection of intellectual, industrial
and commercial property;
"(h) Economic co-operation in a wide range
of areas, including education and training, science and technology,
environment, industry, investment, financial services, agriculture,
transport, telecommunications and information technology, energy,
tourism, customs, statistics, money laundering and drugs;
"(i) A dialogue on social and cultural matters;
"(j) Financial co-operation, aimed at modernising
the Egyptian economy and promoting private investment;
"(k) The establishment of an Association
Council, which will meet when both sides consider it necessary,
at Ministerial level to examine any issues arising within the
framework of the Agreement. An Association Committee of senior
officials will assist it, and
"(l) Appropriate measures by either Party,
including, implicitly, suspension of the Agreement if it considers
that the other Party has failed to fulfil its obligations under
The Government's view
39.6 The Minister comments:
"The Agreement recognises
the European Union's desire to deepen its partnership with Egypt.
It provides a comprehensive framework for political dialogue at
all levels, and for the development of trade between the EU and
Egypt. The Government favours closer links between the EU and
Egypt. The Agreement does not impose any new burdens on business.
On the contrary, it will bring new opportunities to UK exporters."
39.7 In a letter dated 26 April, the Minister
says that Egypt already has preferential access to the EU market
and the Association Agreement will establish reciprocal free trade
over a period of 12 years from its entry into force.
39.8 On the financial implications of the Agreement,
the Minister notes, firstly, that the Agreement does not cover
EC aid to Egypt. At present, Egypt is eligible for EIB loans,
and EC funding under the MEDA regulation. One of the objectives
of MEDA is to support Egypt in its implementation of the Association
Agreement. He then comments:
"Depending on the extent
of the increase in imports to the EU and the sectors concerned,
there may be additional costs to the EC budget if internal production
of agricultural products is diverted to subsidised exports, intervention
storage or other means of disposal. Any such costs will have to
[be] contained within the agriculture guidelines, in accordance
with the agreement of the Edinburgh Council in December 1992 on
future financing of the Community and the provisions of the Budget
Discipline Decision agreed following the Edinburgh Council."
39.9 The Minister does not suggest that the
slow progress made with this Agreement was due in any way to a
failure by Egypt to agree with the EU negotiators on any specific
issue, such as trade preferences. The fact that the final draft
was substantially the same as the 1999 one which the Egyptians
left on the table supports his analysis that the delay was indeed
due to differences of approach within the Egyptian cabinet.
39.10 We now clear this document.