Documents considered by the Committee on 14th October 2015 - European Scrutiny Contents


16 WTO waiver on services for least developed countries: EU offer

Committee's assessment Legally important
Committee's decisionCleared from scrutiny; further information requested
Document detailsProposal for a Council Decision on the EU's formal notification to the World Trade Organization (WTO) on the preferences for Least-Developed Countries in the services sectors
Legal baseArticles 207(4) and 218(9)TFEU; consensus
DepartmentBusiness, Innovation and Skills
Document Number (37085), —

Summary and Committee's conclusions

16.1 In 2011, the World Trade Organisation (WTO) agreed the so-called The 'LDC Services Waiver', which allows members to waive the usual non-discrimination rules by treating the exports of services from the Least Developed Countries (LDCs) in a preferential manner compared with exports of services by other WTO members.

16.2 Since then, there has been a lack of progress within the WTO in realising these preferences, but in December 2013, WTO Ministers agreed to put in place a process for members to make their offers. Although we have yet to receive an official text, we understand that a proposed Council Decision will seek agreement on the terms of the EU's offer. We have also been told that the UK supports the offer.

16.3 As this document would enable the EU to agree the basis on which to implement the waiver on services granted by the WTO for the least developed countries, it appears to be relatively straightforward in policy terms.

16.4 However, we note the Government's assertion that the UK's JHA opt-in applies to the Decision, despite the absence of a Title V legal basis, on the grounds that it contains JHA content. The Government will be aware of the Committee's opposition to this approach. We ask the Minister to write to us to identify, precisely, the nature and extent of the JHA content he refers to in his Explanatory Memorandum, in accordance with his own Government's opt-in policy. We also ask for a copy of the Written Ministerial Statement to Parliament notifying Members of the purported opt-in decision once notified to the EU institutions.

16.5 We have been unable to report this document to the House prior to its anticipated adoption in late September or early October. This is because of the delay in the production of an official text and, to a much lesser extent, the intervention of the Conference recess.

16.6 We note that this delay has deprived the Committee of the usual eight weeks to scrutinise the purported opt-in decision prior to the Decision's likely adoption. However, in the specific circumstances, we do not take issue with this, particularly since the Minister has provided us with some indication of the factors which have influenced the Government towards a decision to participate.

16.7 We now clear the document from scrutiny. However, when the Minister responds to us on the questions we raise in paragraph 16.4 above, we ask him to confirm the date of the document's adoption (if it has already taken place by then) or likely adoption.

Full details of the document: Proposal for a Council Decision agreeing the European Union's formal notification to the World Trade Organization of the preferences for Least-Developed Countries in the services sector: (37085), —.

Background

16.8 In 2011, the World Trade Organisation (WTO) agreed the so-called The 'LDC Services Waiver', which allows members to waive the usual non-discrimination rules by treating the exports of services from the Least Developed Countries (LDCs) in a preferential manner compared with exports of services by other WTO members. Since then, there has been a lack of progress within the WTO in realising these preferences, but in December 2013, WTO Ministers agreed to put in place a process for members to make their offers.

The current document

16.9 Although we have yet to receive an official text, the Government has told that a proposal for a Council Decision is expected shortly, which would seek agreement to the EU's formal offer to the WTO of the preferences it intends to grant LDCs in the services sector.

The Government's view

16.10 In his Explanatory Memorandum of 7 August 2015, the Minister for Trade and Investment (Lord Maude) says the Government is a strong supporter of the Services Waiver, which will guarantee market access for LDCs in the world's largest markets, and play an important role in creating employment, driving export diversification and economic development. He adds that the UK has been influential in developing the EU's offer, and that it supports the current draft.

16.11 He explains that there are wider benefits of the Waiver. These include:

·  demonstrating progress in implementing the WTO Bali Agreement, as members discuss the Post-Bali agenda and work towards the 10th WTO Ministerial in Kenya in December;

·  highlighting the importance of trade, rather than just aid, in promoting sustainable development, in the year that the Post-2015 development agenda will be finalised; and

·  guaranteeing the LDCs market access to export services in the world's largest markets —growing exports of services in LDCs can create employment and drive export diversification and economic development.

16.12 He also suggests that the offer may also bring economic benefits to the UK, through increased competition and by improving access to services for consumers and business. However, these are likely to be small, given the low level of services exports from the LDCs.

16.13 The Minister also draws attention to the proposed legal base for the Council Decision (Articles 207(4) and 218(9) TFEU), pointing out that the Decision has JHA content, and that, in view of the prospective benefits, the Government is minded to opt in.

Previous Committee Reports

None.


 
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