9 Accession of Kazakhstan to the World
Trade Organisation
| Committee's assessment
| Legally important |
| Committee's decision | Cleared from scrutiny
|
| Document details | Draft Council Decision on the accession of Kazakhstan to the World Trade Organisation
|
| Legal base | Articles 91, 100(2) and 207, in conjunction with Article 218(9) TFEU
|
| Department | Business, Innovation and Skills
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| Document number | (36528), —
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Summary and Committee's conclusions
9.1 The process which effectively sets out the terms and conditions
under which an applicant country accedes to membership of the
World Trade Organisation is one in which the Commission negotiates
on behalf of the EU Member States, and, once those terms have
been agreed, a vote must be taken in the General Council of the
WTO on allowing the new member to join.
9.2 This document relates to an application for membership from
Kazakhstan, and, although it does not give rise to any significant
policy concerns, there are — in common with most previous
such accessions — a number of issues arising from the lack
of an appropriate legal base for the exercising of certain of
the UK's opt-in rights.
9.3 This draft Decision is clearly to be welcomed
on policy grounds, with the main point of interest arising —
as on a number of previous accessions — over the Government's
view that the provisions concerning Mode 4 services (which impact
upon immigration law) give rise to an opt-in under Protocol 21
to the Treaties, even in the absence of an appropriate legal base.
As we have consistently stated in previous similar cases, we disagree
that the UK opt-in is engaged in these circumstances. However,
as this difference of opinion has little practical impact in this
case we are content to clear the document.
9.4 Given that the Government continues to believe
that the UK opt-in is engaged in respect of this decision, it
should have complied with the undertaking concerning the content
of the Explanatory Memorandum given by Baroness Ashton on 9 June
2008, subsequently endorsed by the Minister for Europe (Mr David
Lidington) in his written statement to the House of 20 January
2011. This Explanatory Memorandum gives no indication of the Government's
approach to the opt-in it asserts is exercisable.
Full details of
the document: Draft
Council Decision establishing the European Union position within
the relevant instance of the World Trade Organisation on the accession
of Kazakhstan to the World Trade Organisation: (36528),—.
Background
9.5 The process of World Trade Organisation (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
9.6 Although an official text is not yet available,
we have been sent an Explanatory Memorandum of 2 December 2014
by the Minister for Trade and Investment at the Department for
Business, Enterprise and Skills (Lord Livingston of Parkhead),
indicating the Commission is expected to put forward shortly a
draft Council Decision proposing that the EU should support the
accession of Kazakhstan which applied to become a member in 1996.
9.7 The Minister says that the Government supports
this course of action, and points out that the UK enjoys a strong
trade and investment relationship with Kazakhstan based on free
market access, significant two-way trade and investment flows
and regular dialogue at senior levels. Thus, the UK is one of
largest foreign investors in Kazakhstan, being usually either
in second or third position for foreign direct investment (FDI),
and its exports to Kazakhstan in 2013 were £514 million (mostly
from machinery and specialised equipment for the oil and gas,
mining, power generation and manufacturing sectors), whilst imports
from Kazakhstan were £458 million.
9.8 He points out that one of the complicating factors
in Kazakhstan's accession to the WTO has been its membership of
the Eurasian Economic Union, together with Belarus and Russia,
which has raised some questions about its commitments under the
WTO and how these will be affected by future changes in the Eurasian
Economic Union. He says that, while most of these issues have
now been resolved satisfactorily, some of those around sanitary
and phytosanitary measures and tariff adjustment remain open as
end game matters at the time of writing. Nevertheless, he expects
the terms of Kazakhstan's WTO accession to be reasonable and to
represent a balanced but ambitious package of market opening commitments,
under which UK exporters could save of the order of £13 million
a year in import duties when the Kazakhstan WTO tariff schedule
is implemented.
9.9 More generally, he says that Kazakhstan's membership
of the WTO should mean that foreign businesses, including those
from the UK, will in time be operating in a more transparent and
predictable business environment; that there will also be better
protection for intellectual property rights; that Kazakhstan will
be able to benefit from WTO 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.
9.10 The Minister goes on to observe 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 in Trade in Services (GATS),
and that these commitments will be extended to Kazakhstan 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, 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 is expected to be proposed under
Article 207(6) 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
was that the UK's JHA opt-in will be engaged.
Previous Committee Reports
None.
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