Documents considered by the Committee on 20 October 2010 - European Scrutiny Committee Contents

7 EU-Republic of Korea Free Trade Agreement



+ ADDs 1-21

COM(10) 137



+ 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

Legal baseArticles 91, 100(2), 167(3) and 207 TFEU; consensus
DepartmentBusiness, Innovation and Skills
Basis of considerationMinister's letter of 11 October 2010
Previous Committee ReportHC 468-i (2010-11), Chapter 31 (8 September 2010)
Discussed in CouncilSeptember 2010
Committee's assessmentLegally and politically important
Committee's decisionCleared


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."


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

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2010
Prepared 1 November 2010