Twelfth Report of Session 2013-14 - European Scrutiny Committee Contents


7   The EU and Ukraine

(a)

(34969)

9706/13

+ ADDs 1-35

COM(13) 289

(b)

(35029)

9856/13

+ ADDs 1-35

COM(13) 290


Draft Council Decision on the signing, on behalf of the European Union, and provisional application of the Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part

Draft Council Decision on the conclusion of the Association Agreement between the European Union and its Member States, of the one part, and Ukraine of the other part

Legal baseArticles 217 and 218 (5), (7) and (8) TFEU; unanimity
Document originated15 May 2013
Deposited in Parliament4 June and 12 June 2013
DepartmentForeign and Commonwealth Office
Basis of considerationEM of 14 June 2013
Previous Committee ReportNone
Discussion in CouncilTo be determined
Committee's assessmentPolitically important
Committee's decisionNot cleared; further information requested

Background

7.1  In his Explanatory Memorandum of 14 June 2013, the Minister for Europe (Mr David Lidington) explains that:

—  relations between the EU and Ukraine are currently based on a Partnership and Cooperation Agreement that entered into force in 1998;

—  in 2007, the EU and Ukraine began negotiations on an Association Agreement that would deepen and broaden the political and economic relationship;

—  in 2008, following Ukraine's accession to the WTO, negotiations were widened to include a Deep and Comprehensive Free Trade Area;

—  the Agreement process supports and encourages reform in Ukraine to bring it closer to EU norms, as well giving Ukraine gradual access to parts of the EU Internal Market;

—  this Agreement, including a Deep and Comprehensive Free Trade Area, is the first of its kind; and

—  similar Agreements are being negotiated with Moldova, Georgia, Armenia and Azerbaijan.

The draft Council Decision

7.2  The first proposal (document (a)) is the legal instrument for authorising the signature and provisional application of the Agreement; the second (document (b)), the legal instrument for authorising the conclusion of the Agreement.

7.3  The Minister explains that:

—  negotiations were completed at the end of 2011 and the Agreement was initialled in 2012;

—  in December 2012, the Foreign Affairs Council adopted Conclusions expressing the EU's commitment to signing the Agreement as soon as Ukraine demonstrated progress on:

  • electoral reform;
  • addressing selective justice; and
  • implementing the reforms in the Association Agenda.[32]

—  the Conclusions indicated that if the conditions were met, signature might be possible by the time of the Eastern Partnership Summit in Vilnius in late November 2013;

—  the Council also said that signature might be accompanied by provisional application of parts of the Agreement;

—  provisional application "would be a balance of economic and values issues of mutual benefit, and be designed to encourage early reform";

—  the exact composition of the scope of provisional application has yet to be agreed.

7.4  As of now, the Minister says, the High Representative and the Commission are monitoring developments in Ukraine, and keeping the Council informed about progress by Ukraine to meet the criteria set out in the December Conclusions:

"We received an interim progress report on 10 June in advance of the EU-Ukraine Cooperation Council meeting on 24 June; we expect an assessment to inform the Council's final decision in October or November on whether signature by the time of the Vilnius Summit is appropriate."

7.5  The Minister then describes the Agreement as follows:

"The section on Political Dialogue includes dialogue and cooperation on domestic reform, and dialogue on foreign and security policy including Common Security and Defence Policy. The Justice, Freedom and Security section has a strong focus on rule of law and the reinforcement of judicial institutions and practices. It also covers migration, treatment and mobility of workers, and cooperation on crime. The Free Trade Area part of the Agreement covers a wide range of issues aimed at stimulating growth in Ukraine and creating business opportunities for all parties.

"The Economic and Sector Cooperation section of the Agreement focuses on supporting core reforms to aid economic recovery and growth in areas such as governance, energy, transport, environmental protection, social development, equal rights, consumer protection, education, training, youth and cultural cooperation. The Agreement also includes sections on financial cooperation and institutional issues.

"The contents of Addenda 2-35 are listed at the end of the Agreement: 2-32 contain the technical details supporting the Trade and Economic Cooperation sections; 33-34 contain the three protocols to the Agreement; 35 is a joint declaration on Agreements with other countries."

Subsidiarity

7.6  The Minister says:

"The Association Agreement is a mixed agreement that will be signed by both the EU and its Member States. The elements of the Agreement which fall within the exclusive competence of the EU can only be agreed at EU level."

Legal and Procedural Issues

7.7  The Minister says:

"The Commission's Proposal cites Article 217 of the Treaty on the Functioning of the European Union in conjunction with Article 218(5), the second subparagraph of Article 218(8) and Article 218(7). The Government is currently considering the appropriateness of these legal bases and whether Protocol 21 to the Treaties (the JHA Opt-in) will apply.

"The preamble of the Association Agreement confirms that provisions of the Agreement that fall within the scope of Part III, Title V of the Treaty on the Functioning of the European Union bind the UK and Ireland as separate Contracting Parties. The proposed Council Decision on signature and provisional application provides for the provisional application, as between the EU and Ukraine, of a large part of the Agreement including matters relating to CFSP, JHA, Intellectual Property, Maritime Transport and Energy. The Government is now considering its position in relation to the division of competences; however the provisional application appears to go further than in other similar contexts such as the EU-Central America Association Agreement. These issues are of concern, and we are lobbying within working groups in Brussels to ensure that the final scope of provisional application is consistent with HMG policy to avoid competence creep."

Regulatory Impact Assessment

7.8  The Minister says:

"The Commission carried out an impact assessment in 2007 at the start of the negotiations; we expect a further assessment, but no date has been given. The UK will carry out its own assessment and report to Parliament."

Financial Implications

7.9  The Minister says:

"Ukraine receives funding from the EC's European Neighbourhood Programme that offers EU neighbours a privileged relationship based on the common values of democracy, rule of law and respect for human rights. An allocation of €470m 2011-2013 is supporting Ukraine's efforts towards good governance and rule of law, assistance to the EU-Ukraine Association Agreement and support to energy efficiency and environmental measures. ENP funding for 2014-2020 including Ukraine is currently being negotiated under the Multi Annual Financial Framework."

Timetable

7.10  The Minister says:

"We expect the proposed Council Decision on signature and provisional application to be presented to the Foreign Affairs Council in October or November 2013. Negotiations, including on the legal base, will continue over the intervening months and the FCO will provide further updates to the Parliamentary scrutiny committees, via Ministerial letter, to reflect those negotiations. It is unclear whether the Council Decision on Conclusion will be presented at the same time. We will submit to the Parliamentary scrutiny committees on UK ratification at the appropriate time."

The Government's view

7.11  The Minister continues his comments as follows:

"Ukraine matters: its resource base, pre-eminently in energy and agriculture, has potential to contribute powerfully to the development of a European region resilient to 21st century threats to its stability, prosperity and competitiveness. If Ukraine continues on its current course, it will not fulfil this potential. Nor will it do so if it yields to Russian pressure to join the Customs Union, which would risk loss of sovereignty and independence. Whilst we are sceptical that Ukraine will willingly cede either, particularly in the short term, we judge that a closer relationship with the European Union that holds open the prospect of eventual membership is best way to encourage an independent, successful Ukraine. The proposed Association Agreement, including a Deep and Comprehensive Free Trade Area, is an essential milestone on this path.

"The reforms supported by the Association Agreement will, if implemented, help Ukraine become a free-market economy underpinned by democracy and rule of law. Since President Yanukovych came to power in 2010, we have seen worrying democratic back-sliding; this led to the December Conclusions that set strict conditionality for signature of the Agreement. Our policy has been to support a closer relationship between the EU and Ukraine, while continuing to make clear to Ukraine that they need to deliver demonstrable improvements. The Foreign Secretary underlined this when he met his counterpart on 13 May. The European Neighbourhood Policy's report on Ukraine's progress in 2012 was disappointing, but we believe that isolating Ukraine could slow progress further.

"The EU has much to gain from a closer relationship with its eastern neighbours, but this has to be on the right terms. The Foreign Secretary made clear to the Ukrainian Foreign Minister that the decision on whether or not to sign the Association Agreement this year could go either way, and they needed to demonstrate a sustainable momentum for reform.

"Several Member States are concerned that if the EU does not sign the Association Agreement Ukraine will move closer to Russia. Ukraine recently signed a Memorandum on observer status in the Eurasian Economic Commission, but it is unclear what this means in practice. All of Ukraine's public rhetoric remains firmly committed to an EU future. We judge that if Ukraine were to integrate more closely with the EU and adapt to EU norms and principles, it could send a very strong signal to Russia; we continue to see Ukraine as the swing state in the region that could have an exemplary effect on governance related change we would like to see in Russia.

"The incarceration of former Prime Minister Tymoshenko remains a factor in relations between the EU and Ukraine. For some Member States her release may be a deciding factor in their approach to signature of the Association Agreement. We continue to call on Ukraine to reform its judicial system and ensure equal and fair access to justice for all. Although they have released some opposition politicians, the Ukrainians continue to pursue a number of charges against Ms Tymoshenko."

Conclusion

7.12   There is plainly much to be determined between now and the autumn. Whether it is possible to counteract other tendencies by incentives that do not include the prospect of closer association with the EU is a matter of judgement that may merit debate.

7.13  We therefore ask the Minister to ensure that the Committee is not presented by a fait accompli, on the eve of the Council that will decide what to do next. His officials are aware of the dates of our meetings in September and October: we look to him to provide us with an assessment in time for this important, precedent-setting agreement to be debated if we so decide.

7.14  In the meantime, we shall retain the documents under scrutiny.


32   Which are reproduced at the Annex to this chapter of our Report, and are available at http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/134136.pdf. Back


 
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