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

17 Accession of Liberia to the World Trade Organisation

Committee's assessment Legally important
Committee's decisionCleared from scrutiny; further information requested
Document detailsProposal for a Council Decision establishing the European Union position within the relevant instance of the World Trade Organisation on the accession of the Republic of Liberia to the World Trade Organisation
Legal baseArticles 91, 100(2) and 207, in conjunction with Article 218(9) TFEU
DepartmentBusiness, Innovation and Skills
Document Numbers(37114), 12644/15, COM(15) 469

Summary and Committee's conclusions

17.1 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 decision must be taken by the General Council of the WTO on allowing the new member to join.

17.2 This proposal relates to an application for membership from Liberia, 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.

17.3 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, we recognise that this difference of opinion has little practical impact in this case.

17.4 Given that the Government continues to believe that the UK opt-in is engaged in respect of this decision, it should have fully 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.

17.5 We welcome the Minister's caution about the mixed nature of the agreement. Although we now clear this document from scrutiny, we request the Minister to let us know in due course whether the previous practice of agreeing a separate "Member States only" Decision is followed. If it is, we will be considering, in particular, how clearly each sets out and distinguishes the matters covered.

Full details of the documents: Draft Council Decision establishing the European Union position within the relevant instance of the World Trade Organisation on the accession of Liberia to the World Trade Organisation: (37114), 12644/15, COM(15) 469.


17.6 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 (though in practice this is done by consensus).

The Government view

17.7 Although an official text was not available at the time,[ 100] we have been sent an Explanatory Memorandum of 21 September 2015 by the Minister for Trade and Investment at the Department for Business, Enterprise and Skills (Lord Maude), indicating the Commission is expected to put forward shortly a draft Council Decision proposing that the EU should support the accession of Liberia which applied to become a member in 2007.

17.8 The Minister says that the UK supports the accession of least developed countries (LDCs) to the WTO, and was at the forefront in pressing for the more flexible accession process agreed by the WTO in 2011 (and which will apply in the case of Liberia). Consequently, although the UK has only a limited economic interest, the Government has been involved in the negotiation process, and supports Liberia's accession, the terms of which the Minister describes as reasonable and as representing a balanced package of commitments, given Liberia's level of development and the small size of its economy. He also says that it should mean that foreign businesses, including those from the UK, will in time be operating in a more transparent and predictable business environment; that Liberia will be able to benefit from WTO market access and global trading rules and the transparency of the WTO trading system; 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; and that, as an LDC, it will be able to benefit from the preferences in services trade which WTO members notify under the LDS Services Waiver.

17.9 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 Liberia 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, adding that, although Liberian nationals can already enter the UK as an intra-company transferee, only two have been issued with a visa for this purpose since 2008.

17.10 The Minister goes on to note 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.

17.11 The Minister also notes the transport legal bases for the Decision (Article 91 and 100(2). As transport is a shared competence, this would normally imply that the related agreement is mixed. But he continues:

    "Here, although we would expect the Commission to propose an EU-only agreement, we would also expect the Council to reflect the mixity of the agreement by means of a 'Decision by the Representatives of the Governments of the Member States meeting within the Council' reflecting the fact that all EU Member States are WTO Members in their own right and will agree Liberia's accession in their own right. This process has been followed in all recent WTO Accessions and we expect it to be followed here."

17.12 Finally, as regards timing, the Minister says that Liberia's accession could well be adopted at the next WTO Ministerial Conference on 15-18 December, but that, as the timetable is not within the control of the EU or UK, he is submitting his Explanatory Memorandum now, on the basis that it will be updated when there is a formal proposal from the Commission.

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100   This was subsequently deposited with us on 8 October. Back

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Prepared 14 October 2015