Documents considered by the Committee on 4 May 2016 Contents

6Economic Partnership Agreements with the East African Community Partner States (EAC) and the Southern African Development Community (SADC)

Committee’s assessment

Legally and politically important

Committee’s decision

Cleared from scrutiny

Document details

(a) Proposal for a Council Decision on the signing and provisional application of the Economic Partnership Agreement (EPA) between the EU and its Member States and the East African Community Partner States; (b) Proposal for a Council Decision on conclusion of the Economic Partnership Agreement (EPA) between the EU and its Member States and the East African Community Partner States; (c) Proposal for a Council Decision on the signing and provisional application of the Economic Partnership Agreement (EPA) between the EU and its Member States and the SADC EPA States; (d) Proposal for a Council Decision on conclusion of the Economic Partnership Agreement (EPA) between the EU and its Member States and the SADC EPA States

Legal base

(a) and (c) Articles 207(3), 207(4), 209(2) and 218(5) TFEU; QMV

(b) and (d) Articles 207(3), 207(4), 209(2) and 218(6)(a) TFEU; QMV

Department

International Development

Document Numbers

(a) (37526), 6126/16 + ADDs 1–10, COM(16) 63;

(b) (37528), 6127/16 + ADDs 1–10, COM(16) 64;

(c) (37477), 5608/16 + ADDs 1–19, COM(16) 8;

(d) (37476), 5571/16 + ADDs 1–19, COM(16) 18

Summary and Committee’s conclusions

6.1Economic Partnership Agreements (EPAs) are trade and development agreements negotiated between the EU and African, Caribbean and Pacific (ACP) partners engaged in regional economic integration processes. They aim at promoting ACP-EU trade, and ultimately contribute, through trade and investment, to sustainable development and poverty reduction.

6.2The EU has recently negotiated EPAs with the EAC, comprising Burundi, Kenya, Rwanda, Tanzania and Uganda, and SADC, comprising Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland. These proposals would enable the EU to sign, provisionally apply (for the most part) and conclude (ratify) these EPA’s. As they are mixed agreements22 they also need signing and ratification by the Member States.

6.3We have not previously raised any issues of general policy. However, from the legal perspective, we have sought further information as to the respective exercise of competence by the EU and its Member States, particularly in relation to matters of shared competence,23 and how this is reflected in the legal texts. We have asked these questions in the light of the Government’s own policy that, as a general rule, shared competence should be exercised by the Member States, leaving the EU to act (as it must) only where it has exclusive competence. In these particular cases the provisions concerning provisional application of the EPAs provide a strong inference that the EU is, in fact, exercising competence very broadly.

6.4Given that both EPAs confine provisional application to matters which fall within EU competence the improved transparency identified by the Minister (Baroness Verma) of the legal texts in relation to provisional application is helpful. However the fact that provisional application of each EPA “does not prejudge the allocation of competences between the Union and its Member States in accordance with the Treaties” succeeds only in avoiding an adverse precedent being set, but, ultimately, underlines that there are competence issues that remain unresolved.

6.5The texts of the proposals provided to us still contain no provision addressing the extent to which the EU is exercising shared competence when signing and concluding these EPA’s. Furthermore the Minister has declined to provide us with the Government’s consideration of competence “because it could be used by those who take a different view on the division of competences”. She has, moreover, indicated that that there are some provisions of the EPAs which “at first glance may seem not to fall within the exclusive competence of the EU”.

6.6These circumstances point to these proposals involving a significant risk of competence creep in the form of the EU exercising, or appearing to exercise, shared competence. The fact that the Minister assesses areas where this may be the case as being “high level” and involving no specific requirements on the Commission may have the effect of limiting the likelihood of overt conflict in this particular case, but nevertheless adds to the line of precedents undermining the Government’s policy that the EU should not, generally exercise shared competence. The Minister’s assertions that the Government “has argued successfully to ensure that the correct division of competences between the EU and its Member States are reflected in these agreements” is not reflected in the legal text and the reassurance that the Government “remains vigilant of the risk of competence creep” must be considered in the light of the evident compromise involved here.

6.7Given the policy advantages of these EPAs identified by the Minister and the call for the Government to signal its agreement, we now clear these documents, but in doing so draw them to the attention of the House as the latest in the line of examples of the Government appearing to compromise its own policy on the exercise of shared competence in relation to external agreements, and withholding its competence analysis from Parliament.

Full details of the documents

(a) Proposal for a Council Decision on the signing and provisional application of the Economic Partnership Agreement (EPA) between the East African Community Partner States and the EU and its Member States: (37526 ), 6126/16 + ADDs 1-10, COM(16) 63; (b) Proposal for a Council Decision on conclusion of the Economic Partnership Agreement (EPA) between the East African Community Partner States and the EU and its Member States: (37528), 6127/16 + ADDs 1–10, COM(16) 64; (c) Proposal for a Council Decision on the signing and provisional application of the Economic Partnership Agreement (EPA) between the EU and its Member States and the Southern African Development Community (SADC) EPA States: (37477), 5608/16 + ADDs 1–19, COM(16) 8; (d) Proposal for a Council Decision on conclusion of the Economic Partnership Agreement (EPA) between the EU and its Member States and the Southern African Development Community (SADC) EPA States: (37476), 5571/16 + ADDs 1–19, COM(16) 18.

The Minister’s letter of 27 April 2016

6.8The Minister addresses the issues of provisional application and the exercise of competence together:

“As regards the respective exercise of competence between the EU and its Member States, I would like to make it clear that the Government has argued successfully to ensure that the correct division of competences between the EU and its Member States are reflected in these agreements, noting that we have excluded provisions relating to development cooperation and forestry from provisional application.

“My primary objective is to ensure that such agreements are negotiated in a way which protects and promotes the UK’s interests, including on the division of competences. We often disagree with the EU institutions on the nature of competence within an international agreement. I therefore do not wish to make public the Government’s consideration of competence because it could be used by those who take a different view on the division of competences.

“We discussed our approach on competence in this EPA with lawyers from BIS, FCO, Defra, HMRC, DfT, as well as the Council Legal Service (which provides impartial legal advice to the Council). We examined provisions that at first glance may seem not to fall within the exclusive competence of the EU. The text in the EPAs relating to these issues is mostly of a high level nature, contains no requirements for the Commission to act, and therefore has no direct implications on UK competence.

“For example, Articles 7-11 in the SADC EPA on Sustainable Development can be considered to cover areas of shared competence. Article 7 provides that the parties “reaffirm that the objective of sustainable development is to be applied”; Article 8 provides that the parties “recognise the value of international environmental governance”; and at Article 10 the parties “reconfirm their commitment to enhance the contribution of trade and investment to the goal of sustainable development”.

“Additional articles examined were similarly not found to impose legal obligations that will require implementation action by the EU or the making or amending of EU internal rules.

“Ministers have confirmed that their Government Departments are content to approve signature, provisional application and conclusion on this basis. We have also consulted other EU Member States who are usually like-minded on particular competence concerns. None have seen reason for resisting provisional application.

“I want to reassure you that the Government remains vigilant of the risk of competence creep. However, I am firmly of the view that we have adequate protection on competence and are able to resist provisional application of articles which are not properly within the EU’s competence.

“On the point relating to the extent to which the EU is exercising its competence to sign and conclude these agreements. I would like to be clear that these procedural steps are clear that the UK needs to sign these agreements as an individual Member State, the EU is not able to sign on our behalf. Similarly the UK will need to ratify this agreement—again the EU cannot do so on our behalf.

“With regards to the Government’s efforts to exclude the forestry provisions of the Agreement from provisional application in relation to the EPA with the EAC, included alongside this letter is an updated decision that clearly states this has been achieved. As with the EPA with the SADC, this updated decision also states that provisional application of this Agreement does not pre judge the division of competence between the EU and its Member States.”

Previous Committee Reports

In respect of the EAC EPA: Twenty-ninth Report HC 342 xxviii (2015–16), chapter 5 (20 April 2016); Twenty-fifth Report HC 342-xxiv (2015–16), chapter 5, (9 March 2016) In respect of the SADC EPA: Twenty-ninth Report HC 342 xxviii (2015–16), chapter 4 (20 April 2016); Twenty-fifth Report HC 342-xxiv (2015–16), chapter 4 (9 March 2016).


22 Entered into by both the EU and the member States individually.

23 Shared competence can be exercised either by the EU or by the Member States.




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10 May 2016