Documents considered by the Committee on 7 November - European Scrutiny Committee Contents


8 Accession of Tajikistan to the WTO

(34378)

Draft Council Decision establishing the European Union position within the relevant instance of the World Trade Organization on the accession of Tajikistan to the World Trade Organization

Legal baseArticles 91, 100(2) and 207(4), in conjunction with Article 218(9) TFEU; QMV
DepartmentBusiness, Innovation and Skills
Document originated
Deposited in Parliament
Basis of considerationEM of 2 November 2012
Previous Committee ReportNone
Discussion in CouncilSee para 8.6 below
Committee's assessmentLegally important
Committee's decisionNot cleared; further information requested

Background

8.1 The process of World Trade Organization (WTO) accession consists of two strands. First, individual WTO members agree bilateral arrangements with the acceding country regarding market access for industrial goods, agricultural trade, and services, the outcomes of these individual negotiations then being amalgamated into the Schedules of Commitments and the best offers granted to all WTO members on the 'Most-Favoured Nation' (MFN) principle. Secondly, there are discussions on the compatibility or otherwise of the trade policy regime of the acceding member with the multilateral agreements and obligations which constitute WTO membership. This process — which the Commission negotiates on behalf of the EU Member States — effectively sets out the terms and conditions of the acceding party's membership, and, once these have been agreed, a vote must be taken in the General Council of the WTO on allowing the new member to join.

The current proposal

8.2 Although an official text is not yet available, the Government has told us that the Commission recently put forward a draft Council Decision proposing that, at a special meeting of the WTO General Council on 11 December 2012, the EU should support the accession of Tajikistan, which applied to become a member in May 2001.

The Government's view

8.3 In view of the relatively short time available for discussion in Brussels, the Minister for Trade and Investment at the Department for Business, Enterprise and Skills (Lord Green of Hurstpierpoint) has sent us an Explanatory Memorandum of 2 November 2012, in advance of the official text. He says that, whilst the UK has a limited economic interest,[17] it supports the accession of Tajikistan to the WTO, which will enable foreign businesses, including those from the UK, to operate in a more transparent and predictable business environment, with better protection also for intellectual property rights.

8.4 The Minister adds that the Government agrees with the Commission that the accession terms are reasonable, and represent a balanced but ambitious package of market opening commitments, in line with the level of development and small size of Tajikistan's economy. He adds that WTO membership will allow Tajikistan to benefit from market access and global trading rules and the transparency of the WTO trading system, and that it will also be able to use the WTO Dispute Settlement Mechanism to solve its differences with other members and fully participate in the on-going negotiations to design the trade rules of the future.

8.5 The Minister observes that the UK is bound by commitments to admit services professionals from all existing WTO Members in accordance with its so-called 'Mode 4' commitments under the General Agreement on Trade in Services (GATS), and that these commitments will be extended to Tajikistan when it becomes a WTO Member. However, he regards it as unlikely that this would give rise to a significant increase in the number of arrivals from Tajikistan, as the Mode 4 categories are tightly defined, with a clear focus on highly skilled, highly qualified services professionals. He also notes that this measure has been proposed under Article 207(4) TFEU, which is a non-Title V legal base. However, as EU legislation requiring Member States to open their markets to the provision of services by natural persons from third countries would impose JHA obligations on the UK, the Government's view is that the UK's JHA opt-in is engaged.

8.6 Finally, the Minister says that the Presidency is seeking to secure a decision at the Foreign Affairs Council on 29 November, in order to allow Tajikistan's accession to be approved by the WTO General Council on 11 December.

Conclusion

8.7 This draft Decision is clearly to be welcomed on policy grounds, with the main point of interest arising — as on a number of previous occasions, most recently the accession to the WTO of the Lao People's Democratic Republic[18] — over the UK intention to exercise its Mode 4 opt-in rights under title V TFEU in the absence of an appropriate legal base. On those occasions, we have exchanged differing views with the Government over the legality of asserting opt-in rights in the absence of a Title V legal base, and our view remains that such a base is necessary for the UK to exercise its opt-in rights. Consequently, we would like the Government to indicate whether other Member States (including Denmark and Ireland) and the Commission accept that the UK's opt-in rights apply to the Mode 4 provisions, and whether a Title V legal base will be added to the Council Decision accordingly. We also ask the Government to say whether it will opt in to the Mode 4 provisions. Pending its response to these points, we propose to hold the document under scrutiny.



17   UK exports of goods to Tajikistan in 2007-11 averaged at £3.3 million. Back

18   (34225) 14170/12: see HC 86-xiii (2012-13), Chapter 2 (17 October 2012). Back


 
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Prepared 16 November 2012