21 Accession of Ecuador to the EU Trade
Agreement with Colombia and Peru
| Committee's assessment
| Legally important |
| Committee's decision | Cleared from scrutiny; further information requested
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| Document details | Draft Council Decision on the accession of Ecuador to the Trade Agreement between the EU and Colombia and Peru
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| Legal base | Articles 91, 100(2) and 207, in conjunction with Article 218(5) and (6) TFEU; QMV
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| Department | Business, Innovation and Skills
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| Document number | (36702),—
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Summary and Committee's conclusions
21.1 In April 2007, the Commission was authorised to open negotiations
with Colombia, Bolivia, Peru and Ecuador with a view to concluding
a Free Trade Agreement (FTA), but Ecuador and Bolivia discontinued
their participation, leaving Colombia and Peru to sign a comprehensive
agreement with the EU in 2012. However, following negotiations
in 2014, it has been agreed that Ecuador would accede to the Agreement
with Colombia and Peru, subject to a limited number of adjustments
being made to the text.
21.2 This proposal would enable the EU to accede
to the revised Agreement.
21.3 The Minister of State for Trade and Investment
(Lord Livingston of Parkhead) notes that the Commission had originally
sought to treat the original Columbia and Peru Trade Agreement
as falling within exclusive EU competence. However, in the event,
it was treated as a "mixed" agreement i.e. there are
parts for which the EU is exercising competence and other parts
for which Member States are exercising their competence. It is
expected that the terms of any Decision will be consistent with
the new Agreement being mixed; and that if the Commission proposes
that the Agreement is entirely within EU competence, the UK will
challenge this, as elements within the competence of Member States
are included.
21.4 The Government also notes that, whilst trade
in services falls within the EU's exclusive competence post-Lisbon,
its position is that Mode 4 provisions in the Agreement engage
the UK opt-in because they involve the right of third country
nationals to enter the UK to provide services. This is not reflected
in the expected legal bases of the Decision.
21.5 The revision of the Columbia and Peru Free
Trade Agreement to enable Ecuador to accede raises no new policy
issues.
21.6 This exercise does however illustrate the
importance of transparency concerning the exercise of competence
in respect of "mixed" agreements. Competence creep can
arise where the Commission either seeks to extend the scope of
the EU's exclusive external competence or where uncertainty as
to whether the EU or Member States are acting in an area of shared
competence gives the Commission the opportunity to claim that
the EU is, in fact, exercising shared competence.[49]
With this in mind we ask the Minister to provide a copy of any
Decision adopted before a successor to this Committee is appointed,
identifying the provisions which make it clear that the EU is
only acting where it has exclusive competence; and also
explaining what steps he has taken to make it clear which are
the provisions of the Agreement for which the EU is exercising
competence and which are those for which Member States are exercising
competence.
21.7 As we have indicated on many previous occasions
this Committee does not accept that the UK opt-in is engaged in
these circumstances and therefore the Decision applies automatically
to the UK unless and until this Decision includes a legal basis
from Title V of Part Three of the TFEU. However, in this case,
this difference of legal view is not of practical significance
as the Government will likely be seeking to opt-in.
21.8 In the meantime we clear this matter from
scrutiny to enable the matter to proceed in the period before
a successor Committee is appointed in the new Parliament. However
should this matter not progress during this period we ask the
Minister to deposit any draft Decision for scrutiny by the new
Committee.
Full details of
the documents: Draft
Council Decision on the signing of the Accession of Ecuador to
the trade Agreement between the European Union and Colombia and
Peru: (36528),—.
Background
21.9 On 23 April 2007, the Council authorised the
Commission to open negotiations with the Andean Community (Colombia,
Bolivia, Peru and Ecuador) with a view to concluding a Free Trade
Agreement (FTA). However, Ecuador and Bolivia decided to withdraw,
leaving Colombia and Peru to continue negotiations. The resulting
agreement was initialled by the parties in March 2011, and was
then the subject of draft Council Decisions in October 2011 authorising
its signature and conclusion by the EU. However, contacts were
maintained with Ecuador, as a result of which negotiations were
held in 2014, resulting in agreement that Ecuador would accede
to the Trade Agreement between the EU and Colombia and Peru, subject
to a limited number of adjustments being made to the text.
21.10 Although an official text is not yet available,
the Government says that a draft Council Decision on the accession
is expected in April, with signature taking place in early June
2015: it also expects the Decision to be similar to that involving
Colombia and Peru, and hence consistent with the Agreement being
"mixed" i.e. allowing for a separate accession by the
Member States. However, it says that, if the Commission proposes
that the Agreement is entirely within EU competence, the UK will
challenge this, as elements which are within the competence of
Member States are included.
The Government's view
21.11 In his Explanatory Memorandum of 4 March 2015,
the Minister points out that the accession of Ecuador to the Agreement
will give UK firms full tariff liberalisation on wines/spirits,
as well as significant boosts to market access for automotive,
dairy and pork products, and for machinery and chemicals. He also
says that the agreement is consistent with the UK's trade policy
objectives and relevant wider policy goals. Accordingly, the Government
supports the agreement, which it regards as well balanced and
ambitious, with substantial gains for all parties on market access
and rules.
21.12 However, the Government also notes that, whilst
trade in services falls within the EU's exclusive competence post-Lisbon,
its position is that Mode 4 provisions on the temporary movement
of skilled personnel (which concern the admission of third country
nationals onto the territory of the United Kingdom) fall within
the scope of the United Kingdom's Title V opt-in; the UK's JHA
opt-in will be engaged. It says that it is committed to taking
all opt-in decisions on a case-by-case basis, putting the national
interest at the heart of the decision making process, and that
it will consider the following issues in relation to this measure,
when taking an opt-in decision:
· whether
there is any impact on immigration to the UK from these provisions;
and
· whether
they are in line with commitments the UK has already given within
the WTO.
21.13 The Minister says that the Mode IV commitments
in this agreement go no further than the EU's offer in the 2006
Doha Development Round, are subject to safeguards, including restricted
sectoral coverage and minimum skills thresholds, and that the
UK's implementation of the equivalent provisions in respect of
Colombia and Peru have not given rise to any increase in the admission
of personnel employed by service suppliers located in those countries.
It does not believe that these provisions are any more likely
to give rise to an impact on immigration, and it confirms that
it considers the Mode IV provisions in the agreement to be incidental
to the predominant purpose of the agreement. On that basis, it
is minded to opt in to the proposed Council Decision.
21.14 The Government goes on to observe that the
Commission originally proposed that the EU-Colombia and Peru Free
Trade Agreement was wholly within EU competence, and that Member
States could not ratify it in their national parliaments
or be parties to it. However, the UK challenged the Commission's
view, with support from other Member States and the agreement
was successfully changed to a mixed competence agreement before
signature. It says that, if the Commission proposes that the accession
of Ecuador to the Agreement is within EU competence, the UK will
challenge this, as it believes the Agreement is of mixed competence
since it includes elements which are within the competence of
Member States. As the agreement contains Mode 4 provisions on
the movement of personnel the Government's view is that the Title
V opt-in applies to the Council Decisions on signature and conclusion.
Previous Committee Reports
None, but in relation to the Columbia and Peru Agreement
(33204), 14757/11 (33205), 14760/11 see Forty-fourth Report HC
428-xxxix (2010-12), chapter 2 (26 October 2011), Fiftieth Report
HC 428-xlv (2010-12), chapter 3 (20 December 2011) and Fifty-seventh
Report HC 428-lii (2010-12), chapter 14 (29 February 2012).
49 Where competence is shared it may be exercised by
either the EU or by the Member States individually. Back
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