7 EU-Republic of Korea Free Trade Agreement
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8502/10
+ ADDs 1-21
COM(10) 137
(31570)
8523/10
+ ADDs 1-21
COM(10) 136
| Draft Council Decision concluding the Free Trade Agreement between the European Union and its Member States and the Republic of Korea
Draft Council Decision authorising the signature and provisional conclusion of the Free Trade Agreement between the European Union and its Member States and the Republic of Korea
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| Legal base | Articles 91, 100(2), 167(3) and 207 TFEU; consensus
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| Department | Business, Innovation and Skills
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| Basis of consideration | Minister's letter of 11 October 2010
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| Previous Committee Report | HC 468-i (2010-11), Chapter 31 (8 September 2010)
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| Discussed in Council | September 2010
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| Committee's assessment | Legally and politically important
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| Committee's decision | Cleared
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Background
7.1 In our Report of 8 September 2010, we drew to the attention
of the House these two documents concerning the conclusion of
a Free Trade Agreement (FTA) between the EU and the Republic of
Korea. Whilst we were content to clear the documents on the grounds
that they did not raise any new or significant policy issues over
and above those which our predecessors had identified in their
Report of 30 March 2010,[19]
we did raise one legal point on which we asked the Government
to comment.
7.2 This arose from the inclusion in the Agreement
of so-called Mode 4 provisions, which deal with the movement of
personnel providing services, and which are essentially similar
to commitments which have been made under the World Trade Organisation's
General Agreement of Trade in Services (GATS) and in a number
of other Free Trade Agreements. We were told that these now fall
within the scope of the UK's Title V opt-in measures under the
Lisbon Treaty in the field of Justice and Home Affairs, and that
the UK had exercised its opt-in so far as these arrangements are
concerned. However, we noted that these two Council Decisions
are founded on the EU's common commercial, transport and cultural
policies, not Freedom, Security and Justice policies under Title
V TFEU, to which the opt-in procedure applies. We also pointed
out that, consistent with the legal bases, the recitals to the
FTA do not foresee the possibility of the UK or Ireland opting
into the part of the FTA which deals with Title V measures, and
that, under Article 2, the opt-in Protocol (Protocol 21) applies
only to international agreements concluded by the EU pursuant
to Title V, which is not the case here. We therefore said it was
unclear to us on what legal basis the Government considers it
necessary to opt into the Mode 4 provisions on the temporary movement
of personnel, and we asked the Government to explain this, and
at the same time to indicate whether Ireland had followed the
same approach as the UK in thinking that the opt-in Protocol applies.
Minister's letter of 11 October 2010
7.3 We have now received, from the Minister for Employment
Relations, Consumer and Postal Affairs (Mr Edward Davey), a letter
of 11 October 2010, in which he says that, whilst he has noted
our view, he is unable to agree with it and considers that the
Government's interpretation is both consistent with the wording
of the Title V Protocol and with the need to safeguard the UK's
national interest. He goes on to argue:
"As regards consistency with the terms of the
Title V Protocol, my view is that the wording of Article 2 of
the Title V Protocol supports the interpretation that the UK opt-in
applies to the provisions of international agreements which fall
within the scope of Title V even where the relevant Council Decision
to sign and conclude does not cite a Title V legal base. Importantly,
Article 2 refers to a separable "provision" of an international
agreement not being binding on the UK in the absence of an opt
in, rather than to a "measure" not binding the UK in
its entirety. In my view this indicates that the crucial question
in assessing whether the protocol applies is whether a specific
provision of an international agreement falls within the
scope of Title V rather than whether the agreement taken as a
whole justifies the inclusion of Title V legal base in the Council
Decision to sign and conclude.
"I would also argue that this interpretation
of the terms of Article 2 is the one which is most consistent
with the intention behind the Title V protocol. In contrast, interpreting
the Protocol so as to make the application of the UK's opt-in
conditional on the citation of a Title V legal base would shift
the focus from whether the content of a provision of an international
agreement falls within the scope of Title V to a formalistic consideration
of whether a decision has been taken to include a particular legal
base. This is not to say of course that the UK would not always
push for the inclusion of a Title V legal base in such circumstances,
but in the light of the range of different provisions which may
be included in an international agreement this may not always
be achievable.
"As to your question regarding the recitals,
I agree that wherever possible it is desirable for the UK to obtain
a recital recording the basis of our participation in a particular
instrument — as in reaching an agreed position with Ireland.
However, this is again not always achievable and therefore in
this instance we have published a declaration on adoption of the
Council Decision to sign this Agreement setting out the position
on UK participation in relation to the Title V provisions. We
consider that this sufficiently safeguards the UK position as
regards the application of the opt-in.
"As to the Irish position regarding the application
of the Title V Protocol to international agreements, discussions
are currently taking place with Dublin to establish exactly what
the Irish position is."
Conclusion
7.4 We are grateful to the Minister for his response,
but are not convinced by it. We think a "provision of any
international agreement concluded by the Union pursuant to"
Title V TFEU in Article 2 of the opt-in Protocol means there must
be a clear indication — legal base and, usually, recital
— in the agreement that one or some of its provisions have
been concluded as a result of the EU's competence to act under
Title V. For reasons of legal certainty, the test must be an objective
one, rather than a subjective one as argued by the Government:
all 27 Member States and the third country concerned have to know
how the agreement will apply to the UK and Ireland. We are surprised
that the Minister considers this approach "formalistic".
7.5 We also note that, under Article 3 of the
opt-in Protocol, the UK has to notify the Council of a decision
to opt in within three months after a proposal "has been
presented to the Council pursuant to Title V". Again, unless
there is a clear indication of a legal base in Title V, there
is no way of knowing that the proposal is presented pursuant to
Title V.
7.6 As we have already cleared these documents,
we see no reason to continue this correspondence, but we hope
that future international agreements will clearly indicate if
a provision is concluded pursuant to Title V.
19 See (31430) - : HC 5-xvi (2009-10), chapter 5 (30
March 2010). Back
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