Treaty Accession (South-East Asia)

The Committee consisted of the following Members:

Chair: Mrs Linda Riordan 

† Dunne, Mr Philip (Ludlow) (Con) 

† Elliott, Julie (Sunderland Central) (Lab) 

† Glen, John (Salisbury) (Con) 

Hendrick, Mark (Preston) (Lab/Co-op) 

† Hilling, Julie (Bolton West) (Lab) 

† Horwood, Martin (Cheltenham) (LD) 

† Lidington, Mr David (Minister for Europe)  

† Phillips, Stephen (Sleaford and North Hykeham) (Con) 

† Reynolds, Emma (Wolverhampton North East) (Lab) 

† Simpson, David (Upper Bann) (DUP) 

† Smith, Julian (Skipton and Ripon) (Con) 

† Stewart, Bob (Beckenham) (Con) 

Sutcliffe, Mr Gerry (Bradford South) (Lab) 

Miss Kate Emms, Committee Clerk

† attended the Committee

The following also attended, pursuant to Standing Order No. 119(6):

Cash, Mr William (Stone) (Con) 

Green, Kate (Stretford and Urmston) (Lab) 

European Committee B  

Tuesday 4 September 2012  

[Mrs Linda Riordan in the Chair] 

Co-operation with South-East Asia

4.30 pm 

The Chair:  It might help the Committee if I explained today’s procedures. In a moment I will ask the member of the European Scrutiny Committee, Mr Phillips, whether he wants to speak for up to five minutes by way of an introductory statement. I will then call the Minister to make an opening statement, which should be largely factual and explanatory and which should last no more than 10 minutes. No interventions can be taken during his speech. After the Minister has sat down, we have up to an hour for questions, which I have the discretion to extend by a further 30 minutes. Once all that is done, we move into the formal debate. The Minister will probably want to move the motion formally and the Opposition spokesperson may want to speak. We will then follow normal debate procedure. When the debate finishes, I will put the motion to the Committee. The meeting must finish by 7 o’clock. 

Does the member of the European Scrutiny Committee wish to make a brief explanatory statement about the decision to refer the relevant document to this Committee? 

4.31 pm 

Stephen Phillips (Sleaford and North Hykeham) (Con):  That is an extremely kind invitation, Mrs Riordan, and I will take you up on it. It is a pleasure to serve under you on the Committee. 

It might be helpful to the Committee if I explain a little of the background to the document and why the European Scrutiny Committee recommended it for debate. The Treaty of Amity and Co-operation, or the TAC, binds together the 10 countries of the Association of Southeast Asian Nations. The TAC was amended in 1987 to allow states outside the region to accede to it, and there are presently 18 members. 

When the Minister submitted the Council decision for scrutiny, he explained that the Council had proposed that the European Union should accede to the TAC at the European Union-ASEAN Foreign Ministers meeting in April in Brunei. The European Scrutiny Committee welcomed that development and noted that the Minister had rightly raised the issue of competence and talked of vigilance and clarity in this area. However, it also observed that when the Council decision came to be adopted it would recall a 2006 Council declaration which, in the context of the post-Lisbon accession of the EU to an international treaty, covered, in pre-Lisbon terminology, only “common foreign and security policy” and “police and judicial cooperation in criminal matters”. The Committee therefore asked the Minister to clarify the extent to which the EU would in fact be exercising competence in respect of the broader subjects embraced by the TAC and what steps would be taken to ensure that the respective competencies of the European Union and of the member states were appropriately recognised

within the Union and made transparent to other parties to the TAC so that they and the House might know precisely what their new partner could or could not bring to the table. 

The Minister then told the Committee a number of things. First, the EU may only act under the TAC to the extent of its competence. Secondly, while it was helpful to have confirmation that the principles in the 2006 declaration that EU accession to the TAC does not prejudice member states’ ability to act independently in relation to matters falling under the CFSP in particular, that should not be interpreted as indicating agreement that the EU has exclusive competence for all other matters covered by the TAC. Thirdly, in determining how the EU and member states may act within bodies established under the TAC, the Minister said: 

“a careful assessment of where competence lies will be needed and we will need to police this carefully.” 

With regard to what steps will be taken to ensure that the respective competencies of the EU and the member states are both appropriately recognised within the Union and made transparent to other parties to the TAC, the Minister told the Committee a number of further matters. First, declarations setting out the delimitation of competence between the EU and member states may be made where an international agreement specifically requires them, or the non-EU parties ask for such clarity, but not as a matter of course. Secondly, the Minister remains 

“very clear that the division of competences under the TAC must be respected, in line with the Treaties” 

and that 

“this will require careful monitoring by the UK and the other Member State parties to the TAC to ensure that the boundaries between EU and Member State competence are respected.” 

Thirdly, the Minister said in particular that he would push for timely discussions in the appropriate Council working groups of the proposed positions to be taken by the EU in meetings under the auspices of the TAC, so as to ensure that the boundaries of EU competence were respected. Fourthly, he said: 

“To the extent that any bodies established under the TAC may take decisions which are capable of having legal effects and which fall within the EU's competence”, 

he will 

“ensure that the EU acts in accordance with the appropriate procedures set down in the Treaties.” 

Finally, he said that where it is proposed that statements should be delivered by the EU in meetings under the TAC, he would ensure that they were prepared and presented in accordance with 

“the General Arrangements on EU Statements in multilateral organisations agreed on 24 October 2011.” 

The Minister also noted that the UK was near to completing its bilateral accession, and told the Committee: 

“Our messages to ASEAN and TAC partners as well as the public at that time will make clear that we are acceding alongside the EU precisely because there will be areas under the Treaty where the EU does not have competence to act on behalf of Member States.” 

The Committee decided that it was still unclear about how the division of competences between the EU and member states in the TAC will be respected, and that the Minister should therefore be given the opportunity to explain, in this Committee and in greater detail, how

the UK will ensure that member state and EU competence is respected for each of the policy areas covered by the treaty. 

4.36 pm 

The Minister for Europe (Mr David Lidington):  First, it is a pleasure to serve under your chairmanship today, Mrs Riordan. The treaty of amity and co-operation was originally agreed in 1976 by the five founding members of ASEAN, namely Singapore, Malaysia, Indonesia, Thailand and the Philippines. At first, accession was open only to other south-east Asian countries, but since 1987 states outside the region have been permitted to accede and countries such as Canada, Australia, New Zealand, Turkey, the United States, India and China have already done so. From July 2010, the treaty was opened to accession by regional organisations whose only members are sovereign states. 

The ASEAN countries have encouraged the European Union to accede to the TAC, and accession to the treaty is a symbol of the EU’s commitment to greater European engagement in south-east Asia, which the Government believe to be firmly in the UK’s interest. As the Foreign Secretary set out in his speech on Britain in Asia in April this year, EU activity in Asia can support the UK’s security and prosperity objectives. An EU that can demonstrate a collective strategic vision for Asia will be able to engage more effectively with the United States and China in the region. As the world’s largest trading bloc, the EU can play a role in forging open markets and encouraging better alignment of trade rules. 

Although the treaty will add little in practical terms to existing structures for EU-ASEAN engagement, it is significant as an expression of the EU’s intent to deepen its co-operation and dialogue with ASEAN, and, just as importantly, ASEAN sees it as such. I welcome the European Scrutiny Committee’s support for the substance of the measure. The framework for engagement will remain the largely the same, with the existing biennial EU-ASEAN meetings providing the main channel for dialogue. They are attended by the Foreign Ministers of all EU and ASEAN member states, and they are preceded by senior official-level meetings attended by all member states. For all the meetings, there is a chance to prepare agendas, statements and speaking roles through the relevant European Council working group well in advance. 

I recognise the European Scrutiny Committee’s concerns about EU competence, to which I will devote the bulk of my introductory remarks. As I have said many times, we are extremely vigilant when it comes to determining whether an issue falls within national or EU competence, and the Committee might find it helpful if I set out the position regarding the TAC. I will structure my comments around two themes: first, how we protected our position on competence in the discussions in which accession was negotiated, and, secondly, what the TAC will cover and how we will protect our position in the future. 

I turn first to the accession negotiations. Throughout the process, officials were vigilant about ensuring that there was no risk of competence creep. When the Council decision to approve the accession of the Union was adopted, we ensured that the Council formally recalled a Council declaration made in 2006 that made it clear that EU accession to the TAC was not an impediment to member states’ acceding in their own right or acting

on their own accord in respect of matters falling within the scope of the common foreign and security policy, save only to the extent that member states are required to comply with an existing unanimously adopted EU position. That declaration reflected declaration 13 made by the intergovernmental conference that adopted the Lisbon treaty, confirming that the provisions of the treaty covering CFSP do not affect the responsibilities of the member states as they currently exist for the formulation and conduct of their foreign policy. 

Turning to the scope of the TAC and future developments, the agreement generally covers CFSP matters and matters relating to economic, financial and technical co-operation, and it also touches on social policy and cultural topics. The TAC is therefore a mixed agreement in EU jargon. It engages both member state and EU competence. The fact that the United Kingdom and France have acceded to the TAC separately and in parallel to the EU makes it clear that there are areas under the treaty where the EU does not have competence to act on the behalf of member states. How will we protect that position on competence? In general, we will insist upon timely discussions in the appropriate Council working group of any proposed positions to be taken by the EU. That should ensure that the EU acts only if it has competence to do so. 

To the extent that the biennial EU-ASEAN meetings take decisions capable of having legal effects, the UK will ensure that the EU acts only in accordance with the appropriate procedures set down in the treaties. For example, if an amendment to the TAC were anticipated, article 218(9) of the treaty on the functioning of the European Union requires a formal decision by the Council to establish the position to be taken by the EU on such a matter and to authorise either the European External Action Service or the Commission to represent that position. The Council will adopt such a decision only where the matter is considered to fall within EU, rather than member state, competence. 

Where it is proposed that statements should be delivered by the EU on matters that do not have legal effect, the UK will ensure that such statements are prepared and presented in accordance with the principles set out in the general arrangements on EU statements in multilateral organisations agreed on 24 October 2011. Those arrangements provide that the EU will make a statement only in those cases where it is competent and where there is an agreed EU position. Member states can agree how to be represented externally on matters within their own competence, and where an issue engages both EU and member state competence, it will be made clear that the statement is being made on the behalf of both. Such prefacing words protect all member states against any risk of competence creep. 

It may help if I provide some illustrative examples to the Committee on how things may work in practice. Article 9 of the TAC requires parties to 

“foster cooperation in the furtherance of the cause of peace, harmony and stability in the region.” 

Such discussions may clearly engage CFSP competence under articles 21 to 46 of the treaty on the European Union. Should specific ways of doing that come up for discussion at EU-ASEAN meetings, UK officials would assess the extent to which the UK might participate in these discussions in our own right, or whether we were content to allow the EU representative to speak on

behalf of the EU as a whole on the specific issue in the light of relevant existing EU positions or measures. If such positions or measures were CFSP, they would have to have been agreed unanimously. 

The Council has already made it clear through its 2006 declaration that where CFSP matters are concerned, the mere fact of EU accession does not prevent the member states from acting, save to the extent they act consistently with any unanimously agreed EU position. In the context of any action in the EU-ASEAN meetings, that means that if there is an EU position agreed by Council on the issue, the High Representative, through European External Action Service officials, will speak for the EU, but the UK may also contribute in support of or to supplement the EU interventions. 

If, on the other hand, discussions within the context of the TAC were with a view to promoting active co-operation in economic and technical matters, as required by article 4 of the TAC, such matters may fall within the EU’s competence under article 212 of the treaty on the functioning of the European Union. However, the treaty makes it clear that member states also retain competence in this area. In other words, competence is parallel. In such areas, where discussions concern non-legally binding actions, we would, in practice, co-ordinate a common position of the EU and the member states and discuss in co-ordination with our partners how any intervention should be made. 

I hope that this clarification, and specific examples of how we intend the measure to be implemented, will reassure members of the European Scrutiny Committee that UK competences will be properly safeguarded. 

The Chair:  We now have till 5.30 pm for questions to the Minister. I remind hon. Members that they should be brief. It is open to a Member, subject to my discretion, to ask related supplementary questions. 

Emma Reynolds (Wolverhampton North East) (Lab):  It is a pleasure, as ever, to serve under your chairmanship, Mrs Riordan. Article 2 of the TAC refers to non-interference of other member states. Will the Minister clarify what the Government understand that to mean exactly? Will he reassure me that it does not extend to criticism of human rights, which we think should be open to all signatories of the treaty to make of each other? 

Mr Lidington:  We certainly do not interpret the article in that fashion. Indeed, we would see closer relations between the EU and ASEAN as including the continued and robust dialogue on human rights, something that has proved particularly important in recent years in the case of Burma. It is difficult to go back into what lay behind the intentions of the framers of the TAC back in 1976, but as the hon. Lady will appreciate, during the 1960s in particular there were considerable tensions over rival territorial claims between some of the founding members of ASEAN. I rather suspect that that, and the need to guard against that, lies behind this course. 

Emma Reynolds:  That brings me nicely on to my second question, which concerns articles 1 and 2 of the treaty, which state that the treaty’s purpose is to promote peace, co-operation and mutual respect for territorial

integrity. Will the Minister tell us whether those treaty commitments can help in any way to reach a resolution of the recent dispute between Japan and China over the Senkaku islands? Will that dispute be on the agenda of a future ASEAN-EU meeting? 

Mr Lidington:  Obviously, I cannot rule out completely what may or may not appear on the agenda of a future EU-ASEAN meeting, but of course the TAC was drawn up by ASEAN member states to suit their policy objectives, to which subsequently they have invited other countries and regional organisations to accede. The Sino-Japanese dispute to which the hon. Lady refers is clearly not one that falls within the ambit of ASEAN. Neither China nor Japan is a member of ASEAN, and it is most unlikely that either country would seek to have this question debated in this particular forum. 

Martin Horwood (Cheltenham) (LD):  My first question has echoes of the question asked by the hon. Member for Wolverhampton North East. I am concerned about the strong phraseology in article 10: 

“Each High Contracting Party shall not in any manner or form participate in any activity which shall constitute a threat to the political and economic stability, sovereignty, or territorial integrity of another High Contracting Party.” 

Other high contracting parties include Russia, North Korea and China. Actually, I would quite like to participate in some activities that could constitute a threat to the political stability of North Korea. The political stability of North Korea is an oppressive and murderous regime that is inflicting great suffering on its people. If we are to comment on the Sergei Magnitsky case, the Pussy Riot convictions or human rights in China, I am not suggesting that this particular treaty will be a massive inhibition to such statements. We should not really sign up to things—and, as Europeans, we should not sign up to things—if we do not really mean them. I would therefore like to hear the Minister’s interpretation, particularly in relation to the United Nations doctrine of the responsibility to protect, which significantly qualifies such a non-interference doctrine. 

Mr Lidington:  If I may, I will take advice and either speak or write later to my hon. Friend about the UN right to protect. On his first point, I go back to my response to the hon. Member for Wolverhampton North East. The treaty was framed against the history of neighbouring countries in south-east Asia having several territorial claims against each other and accusing each other of fomenting rebellions against other Governments. It was intended as a statement by those south-east Asian countries of mutual assurance, one to another, that they would not attempt regime change and would respect one another’s territorial integrity. An historical analogy from our part of the world would perhaps be the Helsinki final accords and the formation of the Conference on Security and Co-operation in Europe, which is now the Organisation for Security and Co-operation in Europe. That is the nearest analogy that I can find in recent European history. 

To give further reassurance to my hon. Friend the Member for Cheltenham, not only do I see no problem for United Kingdom policy in either the UK or the EU acceding to the TAC, but I would point out that both North Korea and the United States of America have managed to remain parties to it without that fact apparently inhibiting the United States from pursuing fairly robust

policies and making pretty strong statements about the nature of the North Korean regime. I think that that history provides some reassurance. 

Mr William Cash (Stone) (Con):  The background to the issue was slightly contaminated by an override of the European scrutiny process. Although I arrived almost on time, I may have missed a little statement indicating exactly when the treaty was signed up to. The override took place against the background of a proposal for a July signing, and I just want to be sure about that. Will the Minister inform the Committee when it was signed up to? Has it been signed up to? July is July—we do not know what date it was, but I just want to know when it was done. 

Mr Lidington:  The override took place in April. It was not a decision that I took lightly, as my hon. Friend will know. In April, negotiations had been completed and full agreement reached by the ASEAN countries, the EU and EU member states. The EU and ASEAN Foreign Ministers were about to have their biennial meeting, in this case in Brunei, on 27 April 2012. We learned that there was the strong possibility of a push formally to agree EU accession during that Foreign Ministers’ meeting in Brunei. Certainly, the Government of Brunei Darussalam were keen that that should happen. 

I took the decision, particularly because the European Scrutiny Committee had not expressed any doubt about the substance of the measure, but only about the possible competence risks involved. In my judgment, it would have damaged the interests of the United Kingdom to have said—not only to the other 26 European Union countries, but to the 10 ASEAN member states, with whom we are seeking to enhance both our political and commercial relations—that we were sorry but we would block the measure, so that they could not go ahead at the biennial meeting and would have to wait for a future occasion. For that reason, I invoked the override of scrutiny. 

What then happened was that Cambodia, which held the rotating chairmanship of ASEAN, objected to this agreement being concluded on Bruneian soil and said that the proper course was for formal accession to take place at a meeting inside the country of the ASEAN chair. So, at the very last minute and after I had taken and implemented the override decision, the Cambodians blocked further progress. 

What subsequently happened was that everybody agreed to the normal ASEAN protocol being followed. There was a meeting in Phnom Penh in July. The EU and separately the United Kingdom acceded. I will come back with a precise date for that meeting, but it was in July. 

Mr Cash:  That was just the preamble, because the Minister has given a very full explanation just now. He has also used the words, “the question of competence”, as compared with the question of the substance. Of course, some people might argue, and I ask the Minister to confirm this, that the question of competence is a matter of substance. 

I am concerned about an issue and I want to ask the Minister about it. When he refers to article 4 of the TAC and article 121 of the TFEU, which is the dividing up of the competencies—as I understand it—in relation to economic affairs on which no questions have yet

been asked, would I be right in assuming that we will not be locked into decisions taken by the European Commission, or by the EU with its legal personality, at the expense of any decisions—for example in relation to individual countries that form part of the make-up of ASEAN—that would in any way inhibit our ability to develop trade, for example with India, on our own terms? 

That is the key question that I am interested in. Although the EU may have its functions, are we not ourselves entirely free to enter into decisions on our own terms relating to deals with, for example, individual countries such as India, which I have just come back from? 

Mr Lidington:  First, I have now been advised that the date of the formal accession was 13 July. Secondly, although I would be second to none in saying that we need to do much more to strengthen our relationship with India, India is, of course, not a member of ASEAN, although it is a party to the TAC. I hope that my hon. Friend will forgive me if I leave discussion of our relations with India for a future occasion. 

My hon. Friend asked me whether we would still have the freedom to conclude whatever deal we wished to conclude with ASEAN countries. Of course, that depends upon the nature of any such deal. For example, whether or not the EU or the UK acceded to the TAC, the fact that we are members of the EU means that we have accepted treaty arrangements under which the EU has exclusive competence in respect of international trade negotiations. So there are some things where competence lies with the EU, which are not affected one way or the other by the decision to accede to the TAC. 

If we look at the TAC, what we are dealing with here are those articles of the treaties that cover how matters should be handled when the EU concludes an external agreement with another state or international organisation. Article 212 is the legal base for the EU to enter into agreements with third countries in order to achieve co-operation in economic and technical matters. We can also enter into such agreements with individual countries in parallel with what the EU does. Of course, in using its legal personality to conclude an agreement, on a specific technical or economic matter, the EU would have to observe the appropriate policy-making process as laid down in the EU treaties. 

As my hon. Friend probably knows better than any other Member, EU treaties since Lisbon provide, with a number of significant exceptions, that agreement on EU policy is to be determined by member states in the Council acting by qualified majority based on a proposal coming from the European Commission. That is how a proposal on a specific measure on economic matters or co-operation under the terms of the EU’s relationship with ASEAN would be handled. We would have our say and influence the EU position in the same way as on any other such EU initiative. 

Mr Cash:  I am grateful for his explanation, but as one can imagine, I am still slightly concerned that with qualified majority voting, we might desire to go down a route with a specific country bilaterally, but somehow or other it would not happen because other member states might not agree. For example, armaments or other trading relationships crop up periodically, and

can cause quite a lot of difficulty for our UK companies. Is my right hon. Friend really saying that we are not adequately protected because of qualified majority voting or is he saying that we can do pretty much what we want? 

Mr Lidington:  I am saying that accession to the TAC does not weaken our position. If neither the UK nor the EU took part in the TAC, we would still, as a member state of the EU, need to act in respect of our economic relations, particularly our trade relations, with third countries based on EU law and the established EU position. As I said, trade is already an exclusive EU competence. Although getting agreement across the EU on a particular negotiating mandate for a trade deal is often a very frustrating, time-consuming process, there is little doubt in my mind that we have far more leverage on behalf of the British people, as producers and as consumers, if we can exercise that leverage as part of a market of 500 million people through the EU than as one country with 60 million or so consumers. 

We would not need approval from other member states to enter into economic and technical co-operation with third countries. Our competence to do so is in parallel with the EU’s competence. As my hon. Friend knows, there are parts of the treaties for which both the EU and member states have competence, and the extent to which that competence in practice falls to one or the other depends on whether it has been exercised at EU level and a precedent set. We would make a judgment at each point where a specific measure is proposed. We would remain very active, vigilant and robust in defending the right of the UK to act with maximum national freedom consonant with what we have signed up to for accession to the EU treaties. 

Martin Horwood:  My second question also relates to scrutiny. I should like to thank the Minister for the news he broke, which I had not gathered from the papers, which is that Britain’s accession process has now completed on a parallel track. It is clear that the hon. Member for Stone (Mr Cash) and his colleagues have subjected this treaty and the instrument to forensic examination for its constitutional implications. However, what scrutiny has been carried out of the foreign policy implications, perhaps by the Foreign Affairs Committee, of either the British or the European accession to this treaty? 

Mr Lidington:  With respect to my hon. Friend, it would be dangerous for me to try to speak on behalf of the Foreign Affairs Committee. I should not trespass on its privileges. The Government support EU accession and United Kingdom accession because we see the countries of south-east Asia as increasingly important in terms of Asia-Pacific politics and commercial relations. We also believe that those countries are committed to developing ASEAN and shaping it into a more cohesive, regional organisation. They are not yet embarked upon a project like the single European market but they have certainly committed themselves to moving towards greater co-ordination of policy between the ASEAN members. We think there is value in that closer relationship with the ASEAN states. 

On the political front, as I said in my opening remarks, there are advantages to the European Union, having embarked on greater engagement with ASEAN, of being

able to engage better with China and the United States on how we address challenges of the Asia-Pacific region. But there are also some concrete, United Kingdom policy objectives in countering the international trade in narcotics, in countering Islamist extremism and in countering terrorism, where a closer political relationship with the ASEAN countries bilaterally and with ASEAN as a regional organisation will benefit the interests of our people. 

Martin Horwood:  With respect to the Minister, I was not asking about the substance of the treaty. I am very supportive of all the things that he has just said. My question was about parliamentary scrutiny of the treaty. I was not asking him to speak on behalf of the Foreign Affairs Committee; I was asking whether the treaty had been subjected to scrutiny by that Committee in relation to the accession to it by either the UK or the EU. 

Mr Lidington:  The formal scrutiny process is one under which the Government submit explanatory memorandums to the European Scrutiny Committees of both Houses of Parliament. It is for those Committees then to comment as they see fit on the measures that they are considering. I would very much welcome a decision by the Foreign Affairs Committee to look at the relationship of the UK and the EU with ASEAN. That would fit well into a broader inquiry into the growing importance of south-east Asia as a region for British interests. 

Martin Horwood:  If I may crave your indulgence, Mrs Riordan, and ask one more supplementary question, by what constitutional process do we accede to the treaty as the United Kingdom or even through the European Union? Is it simply an Act of the Crown or is there any parliamentary process to approve this at all? 

Mr Lidington:  This is basically a case of the United Kingdom choosing to accede to an international treaty. That is something which has always lain as part of the Crown prerogative now exercised by Ministers on behalf the Crown. I will try to respond to this later. The UK accession was originally subject to scrutiny, but that took place a fair number of years ago. The United Kingdom did not sign at that time because of the stand-off in our relations with Burma for reasons with which members of the Committee will be familiar. 

Mr Cash:  I invite the Minister to consider giving the European Scrutiny Committee further detail on the division of competences—I will not provide specific detail, but he will get my drift—so that we can judge the balance of the substance of the issue and the competence risks that he mentioned. We want a general framework of who does what and how. 

Mr Lidington:  I am perfectly happy to write to my hon. Friend again on that subject, but the European treaties are what determine where competence lies. Only when one can see the text of a particular proposal, whether it is a legislative or a non-legislative proposal from one EU institution or another, can we make a clear judgment as to whether the proposal is properly within the competence of the European Union or whether the EU is pushing the envelope and straying into matters

that remain the prerogative of member states. We have to see the specifics before we can give an absolutely clear response. 

Mr Cash:  I understand that, but I am sure the Minister and his officials get my drift. I am interested in the principles upon which the division of competences is to be decided. Amplifying that matter a little would help us to determine, with regard not to specific proposals but to the general framework, where the United Kingdom may operate on its own account, and individual companies likewise, and whether the EU would override that either by qualified majority vote or by general competence because it is exclusive to the EU. I have made my point. 

Mr Lidington:  I accept my hon. Friend’s invitation to write to him to try to offer further clarification. 

The Chair:  If no more Members wish to ask questions, we will now proceed to the debate on the motion. 

Motion made, and Question proposed,  

That the Committee takes note of European Union Document No. 6677/12, relating to the joint draft Council Decision on the Accession of the European Union to the Treaty of Amity and Co-operation in South East Asia; notes the European Union’s accession to the ASEAN Treaty of Amity and Co-operation; and supports the Government’s policy of increasing United Kingdom and European Union engagement with the countries of ASEAN to promote British and European prosperity, security and values.—(Mr Lidington.)  

5.13 pm 

Emma Reynolds:  When we were in government, we supported the EU’s decision to initiate accession to the treaty of amity and co-operation in south-east Asia in 2006, and we continue to support that accession. We believe that the treaty will help to deepen relations between the two regions. We also welcome the UK’s accession to the TAC in July this year. The treaty seeks to enhance co-operation in economic, trade and social matters and prioritise peace and mutual respect for the sovereignty and territorial integrity of all the treaty’s signatories. 

The rise of a number of south-east Asian economies is impressive, and arguably the west has been slow to appreciate the dynamism of that part of the world. South-east Asian economies performed better than our own and other western countries during the global financial crisis and in many cases are still performing strongly. Last year, Indonesia’s economy grew by more than 6% and Singapore is the world’s fourth-largest financial centre. We welcome the ongoing negotiations with Singapore on the European free trade agreement, and I associate myself with the Europe Minister’s comments on the weight of the European Union in those negotiations compared with a bilateral free trade agreement between the UK and Singapore, or another third country. Countries in the region, however, are at different stages of economic and democratic development. 

The UK has strong links with south-east Asia and exports more to ASEAN members than to China. The UK is the leading EU investor in Thailand. Singapore and Malaysia are growing centres of finance and innovation, and they are just two of the many countries with which we have close historical links. We welcome the recent

political progress in Burma. Aung San Suu Kyi’s address to Parliament was remarkable, but there are obviously ongoing concerns about the depth and continuity of the reforms. It is important that the Foreign Office continues to prioritise our engagement in the region, and I am pleased that Ministers are building on the work of the previous Government. 

We agree with the Minister for Europe that the respective competences of the EU and member states should be recognised and made transparent to other parties to the treaty. It is, of course, right to monitor the practical implementation of the agreement. However, taking account of the principle of conferral under the treaties, the EU may act under the TAC only to the extent of its competence. When it comes to CFSP, the EU’s accession does not, as I understand it, constrain member states’ ability to act in relation to matters falling within the scope of the CFSP unless the EU has already acted, or unless we agree with other EU member states unanimously that we want to act. The EU’s accession to the TAC will, therefore, not impede but facilitate our deepening relationships in this increasingly important part of the world. For that reason, we support both the UK’s and the EU’s accession to the treaty and the motion before us. 

5.16 pm 

Martin Horwood:  It is quite difficult to be against a treaty of amity and co-operation—it only needs motherhood and apple pie to be added to the title and everyone would be happy—but I am concerned about the reality behind the fine and lovely words in this treaty. It is obviously a good thing for the EU to deepen its relations with south-east Asian nations. It is important not least because we are trying to conclude a free trade agreement with ASEAN, and ASEAN could be an important ally in World Trade Organisation negotiations. 

It is also important if the treaty means what it says about the pacific resolution of disputes—pacific meaning peaceful, rather than relating to the ocean. The resolution of issues in places such as the South China sea, where increasing militarisation is causing a lot of alarm among foreign policy analysts, could be aided in some way by having a treaty to which Vietnam, China and the Philippines and everybody else are signatories. If Britain and the EU can support that emphasis on the peaceful resolution of disputes, that might make some contribution. It is, however, a little bit optimistic to expect that just signing this treaty will remove any risk of violent and military conflict in the South China sea. That is why I am a little concerned about the way in which the fine words are translated into action. 

On the opposite side of the argument, however, are the provisions related to article 10 which, if we took them seriously would, it seems to me, inhibit our ability to—supposedly—interfere in the affairs of other countries, which is something that, on occasion, we choose to do as a country. The Minister mentioned Burma. We invited an opposition leader of Burma to address both Houses of Parliament only this year, so we are implicitly supporting quite radical constitutional and political change in Burma. That seems, on the surface, to be in breach of article 10. I have already mentioned the examples of Russia, North Korea, China and so on. If we are to take article 10 seriously, perhaps all that Syria and Iran need to do to get off the hook is to sign up to the treaty of amity and co-operation and then we will accept this doctrine of non-interference. 

The Minister shrugs, but the idea of non-interference has been a shield for dictators and despots for decades. It is something that countries such as China and Burma in their day have strongly supported, but it runs against the equally strong support that this country should give to the universal declaration on human rights and the doctrine, now accepted by the United Nations, of the responsibility to protect populations sometimes against their own governments. 

That also raises a question about scrutiny. From the Minister’s reply to my question it is clear that the EU element of this accession process has had rather more scrutiny than the UK accession process. There is a risk that, while the European Scrutiny Committee has clearly done a magnificent job in subjecting this to forensic scrutiny for its constitutional implications for the relationship between Britain and the EU, the actual substance of the treaty, the issues about why and how we want to deepen our relations with south-east Asian nations, what risks that might pose and what advantages it might confer to the UK, have gone more or less undebated in this process. 

I support the treaty and the European Union and the United Kingdom acceding to it, so in a sense it is not the most controversial subject that could have come up in terms of whether things have received proper scrutiny, but I think it is important that Parliament scrutinises treaties and comments on the Crown or the European Union acceding to them. There has been discussion in the past year or so on reform to the process of scrutiny in this place, including the scrutiny of European processes and legislation. One of my suggestions during the consultation on proper scrutiny of European legislation and documents was that where they related to a particular Select Committee’s area of expertise, such as Foreign Affairs, those Select Committees should be invited to comment on them—not to get quite so drawn into the minutiae of competences in the treaty on the functioning of the European Union and all the rest, but to look at what the treaty means and what its importance is to the United Kingdom and to Europe. 

I would like to make that point even more forcefully now and ask the Minister to update us on where the process of reforming the scrutiny of European legislation has got to. We may also want to look at the treaty process just in terms of the United Kingdom and try to look at the way in which Parliament scrutinises the process by which the Crown accedes to treaties on the United Kingdom’s behalf. 

Julian Smith (Skipton and Ripon) (Con):  Does the hon. Gentleman’s last question to the Minister relate to the motion? The motion is about the document. As the hon. Gentleman said, we should agree to and celebrate it. His two questions relate to procedural matters that do not appear in the motion. 

Martin Horwood:  I think they do. With respect to the hon. Gentleman, the motion is that the Committee has taken note of the European Union document, and I am asking whether we have taken note of it properly. We certainly have taken note of the constitutional and competences question, but whether we have taken quite as much note of the actual political and foreign policy

implications of it, I am not quite sure. I think my question is pertinent to the debate. As I said, I support the treaty, our accession to it and the European Union’s accession to it. 

5.22 pm 

Mr Cash:  I would just like to add one or two comments in reply to the hon. Member for Cheltenham. He referred to European scrutiny. It is well known that I, as Chair of the European Scrutiny Committee, and members of that Committee enthusiastically seek more co-operation from the departmental Select Committees. He can rest assured that we refer matters to other Committees and will continue to do so, but sometimes they do not take up the initiative. In this particular instance, it might be appropriate for the Select Committee on Business, Innovation and Skills to consider the implications. 

When I referred to the distinction between substance, risk and competence, I was referring directly to the question of what the issue would mean in practice. I assure the hon. Gentleman, as I did yesterday in the debate on the European stability mechanism, that I am more interested in the practical consequences of what we do than the arcane discussions that inevitably arise in relation to questions of competence and constitutional issues. It so happens that we are in a Parliament, and the decisions, as a matter of substance in their impact on the United Kingdom and on our constituents, are directly related to the way in which such functions are dealt with in terms of the various provisions of the treaty. It is just one of the unfortunate facts of life now that we constantly have to ask questions about boundaries between competences. The Government have gone to the trouble of producing a White Paper, with the active co-operation of the Liberal Democrats, to determine the question whether the existing competences need to be reviewed. I do not need to go any further into that. 

All the remarks that I could make or need to make on the documents before us are contained in the Committee’s extensive report, which also asks a series of questions. In our conclusion, we say that while we are grateful to the Minister for his letter, we remain unclear about how the division of competence between the EU and the member states and the TAC will be respected. The Minister recognises that this division within bodies established by the TAC will require careful policing, but we are unclear about how the UK will achieve that in practical terms. 

I am grateful to my hon. and learned Friend the Member for Sleaford and North Hykeham for introducing this matter. We recommended that it should be debated, and we are now having that debate. We want the Minister to explain in greater detail how the UK will ensure—that is the word we use—that member state and EU competence is respected for each of the policy areas covered by the TAC, which is why I asked more specifically for the paper. I am not expecting the Minister to respond in detail this afternoon, but we would find it extremely helpful because this is a sensitive area. There will be occasions when we in the United Kingdom have companies that are making inroads into trading relationships within this vast and expanding area of emerging growth. Our only option for the future, given the vast deficit that we run with the other 26 member states, is to refocus our trade, as I set out in my article in The Daily Telegraph

on 14 August. There is no need to give the details of that because they are all out there and I mentioned them in the debate yesterday. 

The bottom line is that we need to be able to develop our trade with the ASEAN region, but not to be shackled by decisions taken by other member states where it is possible for them to impose those shackles by entering into deals among themselves which cut out our ability to trade by the use of qualified majority voting. If I seem a little cynical, Mrs Riordan, I do not apologise. The reality is that there are huge interests in relation to our functions, our trading relationships and the Commonwealth. Some of the countries in the ASEAN region are members of the Commonwealth and others are not. We hope to develop our interests in the Commonwealth because we have a common legal base, a commercial understanding, a common language and opportunities to develop. If all that is to be merged into one ASEAN regional deal, if there is any triumph of experience over concern, I believe we would be in danger of finding that other countries move in there, as Germany already has, at our expense. 

In a nutshell, my concern relates to those companies that want to trade in these other areas. Only the other day, the Malaysian Prime Minister said to me, as chairman of the all-party parliamentary group on Malaysia, that he anxiously wanted to be sure that we traded as much as possible with Malaysia. I am not sure, and the Committee in its conclusions made it clear that it was not sure, exactly how these competences will work out. We went on to say not only that we wanted to a greater explanation of how the UK will ensure that member state and EU competence is respected for each of the policy areas covered by the TAC, but that 

“This will be useful for our understanding not only of the TAC but also of future multilateral agreements to which the EU accedes as a regional organisation.” 

It is all there in the paperwork. The Minister knows it and his officials understand it. We are moving into a new era. We need growth and to be able to work effectively in our own national interest to ensure that we get our slice of international trade. The treaty is described as a free trade agreement, but it will not be if it works out such that when we want to be able to trade with certain countries, we cannot do so because of decisions taken by majority vote or exclusive competence. 

I hope that my concern can be allayed. What I have asked the Minister to do may help me to understand exactly how the treaty will work in practice. This is a positive approach to ensure that we can grow through south-east Asian growth and the regional opportunities available to us. Australia, Canada and all those countries are included in this deal and, while it is very interesting to me that it is there on the table, the question is how much of the cake we will actually be able to get. That, I think, is what the hon. Member for Cheltenham had in mind and that is what I believe that we have to concentrate on. I sincerely trust that nothing in this arrangement ends up in our being precluded from being able to trade freely and fairly throughout the whole south-east Asian region. 

5.31 pm 

Mr Lidington:  I thank all those hon. Members who have taken part in this brief debate. I will respond first to the points made by my hon. Friend the Member for Cheltenham. 

The terms of the scrutiny resolution agreed by the House lay down the procedures under which Departments supply explanatory memorandums to the European Scrutiny Committee of the House of Commons. Furthermore, the terms of reference for all departmental Select Committees include the right and responsibility to scrutinise government action at European level, in so far as that covers a particular Select Committee’s area of policy. It is certainly open at any time to the Select Committee on Foreign Affairs to examine the impact of British and European Union accession to the TAC. As I said earlier, I would welcome an inquiry by that Select Committee into our relationship with the countries of the ASEAN region and more generally. I share the opinion of my hon. Friend that it would be a welcome development were more departmental Select Committees ready to look strategically at European business as a normal part of their programme of work. I certainly wish to encourage that. 

Mr Cash:  The Minister knows that we in the European Scrutiny Committee have decided to hold an inquiry—to which I have no doubt he will be giving evidence, and the hon. Member for Cheltenham might like to attend as well—to look at the effectiveness of the current scrutiny system and to see what improvements we can make and suggest. 

Mr Lidington:  I am well aware that my hon. Friend’s Committee has launched that important inquiry. I look forward to giving evidence—I am delighted to do so—and to studying the conclusions of the Committee in due course. 

My hon. Friend the Member for Cheltenham also questioned how the proposal for UK bilateral accession to the TAC was handled in Parliament. As was said by the hon. Member for Wolverhampton North East, UK accession was agreed back in 2006 under the previous Government. Under the Constitutional Reform and Governance Act 2010, the Government must lay all treaties before Parliament for a minimum number of days before Ministers may deposit an instrument of ratification. Those procedures put into statutory form the process that had been followed previously by Governments, informally, under the so-called Ponsonby rules. The British accession to the TAC in 2006, therefore, will have been laid before both Houses of Parliament for scrutiny, giving Members of this House the opportunity to table a prayer that the ratification not take place if there were serious disquiet about the implications. 

That brings me on to some of the points that both my hon. Friend and the hon. Member for Wolverhampton North East made about aspects of the TAC and our relations with the countries of south-east Asia. Let me say first with regard to Burma that we are not complacent. Progress is not guaranteed. We continue to maintain very close contact with Daw Aung San Suu Kyi. We believe that both she and the President of Burma have shown boldness and courage in trying to forge a way forward to a completely free and democratic Burma. We think that engagement with the Government of Burma is now the best way to support genuine democratic change in that country. 

In respect of the South China sea, both the United Kingdom and the European Union support the peaceful resolution of the various disputes between different

Pacific rim countries. We think that greater engagement, one aspect of which can be the accession of ourselves and the EU to the TAC, will help us to do that more effectively. We want to use the EU-ASEAN relationship to address just that kind of significant regional issue. 

My hon. Friend the Member for Cheltenham, also in his speech, expressed concern about the import of article 10 of the treaty of amity and co-operation. First, we do not believe that that in any way inhibits the freedom of the current or a future British Government to criticise, in vigorous terms, the Government of an ASEAN member state or of a non-ASEAN country that is also now a contracting party to the TAC. I again say to my hon. Friend that the United States has maintained sanctions against Burma, although she acceded to the TAC a while ago. Similarly, the accession of the UK, the EU and France to the TAC in July of this year did not result in an automatic blanket repeal of the sanctions that the European Union and its member states had in place against the Government of Burma. The measures taken to limit the sanctions against Burma were taken by European Union Governments after Foreign Ministers had consulted one another intensively about the right way forward. I can honestly say to my hon. Friend that article 10 of the TAC did not feature in any way whatever in those considerations, so I genuinely think that his fears are misplaced in this case. 

My hon. Friend the Member for Stone, the hon. Member for Wolverhampton North East and my hon. Friend the Member for Cheltenham were united in recognising the importance of ASEAN and its member states for the political and economic interests of the United Kingdom and of Europe as a whole. The Government strongly agree with that. Since May 2010, when the Government came to office, we have worked intensively to strengthen both our bilateral relationships with ASEAN’s members and our relationship with ASEAN as a regional organisation. I believe that those relationships are now at an historic high. 

Let me give the Committee a few illustrations of what has been happening. There have been 26 British ministerial visits to ASEAN countries so far in 2012 alone. The network shift that my right hon. Friend the Foreign Secretary announced to the House during 2011 will result in a significant increase in the number of staff posts in our embassies and high commissions in ASEAN member countries. There will be no fewer than 43 more staff posts in the ASEAN countries than there were before my right hon. Friend’s announcement. That is not counting his decision to reopen the United Kingdom’s embassy in Laos later this year, which has been closed since 1985. When it opens, the United Kingdom will be one of a handful of EU member states that have resident ambassadors and missions in every one of the ASEAN member countries. 

Mr Cash:  Having returned from India in the past few days, I would like to place on record my enthusiasm—and, I am sure, the collective enthusiasm of the CPA delegation—for what we saw there. I would like to congratulate Sir James Bevan, Mr Richard Hyde and his team, and the trade and investment officers. I would be most grateful if that message could be formally

transmitted to them by the House, because they are doing a great job and I am very enthusiastic about what they are trying to do. 

Mr Lidington:  I will happily undertake to relay my hon. Friend’s words of commendation to Sir James Bevan and to the diplomatic team in India. Well merited praise for members of our diplomatic service from Members of this or the other House is always most welcome. 

Our diplomats are working not only in India but—in the context of this afternoon’s debate—in the ASEAN countries to develop British trading and investment opportunities. Over ASEAN as a whole, UK trade in goods and services exports has increased by about 40% over the past three years. If we look at the big players in ASEAN, the improvement is even more striking. During that period, the United Kingdom has increased her export of goods to Indonesia by 84%, to Malaysia by 41%, to Singapore by 30% and to Thailand by 55%. 

Those are just statistics, but the strengthening economic partnership is reflected in inward investment projects. In July this year, a Malaysian consortium acquired Battersea power station for redevelopment. The value of that project is expected to be £8 billion, and it will provide 20,000 construction jobs and 13,000 permanent jobs. More than 80 British tertiary institutions have links with Malaysian counterparts, including the university of Nottingham. In 2011, the Newcastle university medical school opened a campus in Malaysia, and the university of Southampton will open an engineering campus there in October this year. Last month, Philippine Airlines announced a firm order valued at $7 billion for 55 Airbus aircraft. Rolls-Royce is currently the preferred choice to supply the engines, and we hope to hear of a deal imminently. I could go on in much greater detail. This year, we set up a UK Trade & Investment office in Cambodia to boost trade links. London is the second home of the Brunei Investment Agency and much of Brunei’s sovereign wealth is invested in or through the City of London. Brunei, a very small country, is worth some £40 million to the British university system, and bilateral defence links are also strong. 

I believe that there is an exciting future for closer relations between the United Kingdom and ASEAN and between the EU and ASEAN. I do not believe that we face a choice in this country between the best possible partnership with our fellow members of the European Union and an energetic drive to strengthen commercial and political links with the emerging powers of Asia and, for that matter, Latin America. Those areas contain the countries where we see the fastest growth rates and the growth of significant political, as well as economic, influence. Accession to the TAC is one significant step in taking that agenda forward, and I commend the Government’s motion to the House. 

Question put and agreed to.  

Resolved,  

That the Committee takes note of European Union Document No. 6677/12, relating to the joint draft Council Decision on the Accession of the European Union to the Treaty of Amity and Co-operation in South East Asia; notes the European Union’s accession to the ASEAN Treaty of Amity and Co-operation; and supports the Government’s policy of increasing United Kingdom and European Union engagement with the countries of ASEAN to promote British and European prosperity, security and values. 

5.45 pm 

Committee rose.