Documents considered by the Committee on 15 June 2016 Contents

5Accession of Ecuador to the EU Trade Agreement with Colombia and Peru

Summary and Committee’s conclusions

Committee’s assessment

Legally important

Committee’s decision

(a) and (b) not cleared from scrutiny; further information requested

Document details

(a) Council Decision on the signing and provisional application of the Protocol of Accession to the Trade Agreement between the EU and its Member States and Columbia and Peru, to take account of the accession of Ecuador

(b) Council Decision on the conclusion of the Protocol of Accession to the Trade Agreement between the EU and its Member States and Columbia and Peru, to take account of the accession of Ecuador

Legal base

Articles 91, 100(2) and 207(4), in conjunction with Article 218(5) (on signing) and 218(6)(a) (on conclusion) TFEU, QMV

Department

Business, Innovation and Skills

Document Numbers

(a) (37642), 7614/16 + ADDs 1–28, COM(16) 173;
(b) (37650) 7616/16 + ADDs 1–28, COM(16) 174

5.1The two proposed Council Decisions authorise the Council to sign (and provisionally apply) and conclude a Protocol of Accession to enable Ecuador to accede to the existing trade agreement between the EU and Peru and Columbia (the Trade Agreement) (with Ecuador’s accession to the Trade Agreement referred to as the Accession Agreement).

5.2The Minister of State for Trade and Investment (Lord Price CVO) supports Ecuador’s accession to the Trade Agreement as it is “consistent with the UK’s objectives in trade policy and with wider policy goals”. The Minister notes that the Trade Agreement is a ‘mixed’ agreement92 and considers that the Accession Agreement should be mixed too “as it includes elements which are Member State competence”. He also considers 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, but on balance does not believe that they will impact immigration and “is minded to opt-in”.

5.3The predecessor Committee considered the unofficial text of document for signing in March 2015, when it was anticipated that signature may proceed in June (when Parliament was dissolved). It noted the following:

5.4However, it agreed to clear the matter to allow it to proceed in the period before a new Committee was appointed in this Parliament, on the basis that the Minister would provide a copy of any decision adopted before its successor (the current) Committee was formed and clearly set out the position with regard to the exercise of competence.

5.5 As the matter did not progress before this Committee was formed, draft Decisions for signing and conclusion of the Accession Agreement have been deposited along with a new Explanatory Memorandum.

5.6We note that the UK Government welcomes the accession of Ecuador to the Trade Agreement from a policy perspective.

5.7However, the documents raise the following legal concerns:

5.8We retain these documents under scrutiny pending the information requested from the Minister above about the a) exercise of competence and b) process for the provisional application of the Accession Agreement.

Full details of the documents

(a) Council Decision for the provisional application of the Protocol of Accession to the Trade Agreement between the EU and its Member States and Columbia and Peru, to take account of the accession of Ecuador: (37642), 7614/16+ ADDs 1–28, COM(16) 173; (b) Council Decision on the conclusion of the Protocol of Accession to the Trade Agreement between the EU and its Member States and Columbia and Peru, to take account of the accession of Ecuador: (37650), 7616/16 + ADDs 1–28, COM(16) 174.

Background

5.9In April 2007, the Commission was authorised to open negotiations with Colombia, Bolivia, Peru and Ecuador (the Andean Community) with a view to concluding a trade agreement, but Bolivia and Ecuador suspended their participation in the talks in 2008 and 2009 respectively.

5.10The EU signed a trade agreement with Peru and Columbia in June 2012—it has been provisionally applied since March 2013 and August 2013 respectively.

5.11Following the request by Ecuador to restart negotiations, negotiations for the Protocol of Accession by Ecuador to the trade agreement were concluded in July 2014.

The Minister’s Explanatory Memorandum of 28 April 2016

5.12The Minister fully supports Ecuador’s accession to the agreement from a trade policy perspective:

“The agreement is consistent with the UK’s objectives in trade policy and with relevant wider policy goals. The UK government supports this agreement, which is well balanced and ambitious with substantial gains for all parties on market access and rules.”

5.13The Minister’s view is that the Title V opt-in applies to the draft Council Decisions on signature and conclusion as they contain Mode 4 provisions on the movement of personnel, but that the Government “is minded to” opt in:

“While trade in services falls within the EU’s exclusive competence post-Lisbon, the government’s 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.

“The Government 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. In relation to this measure, the Government will consider the following issues when taking an opt-in decision:

“Whether there is any impact on immigration to the UK from these provisions

“Whether they are in line with commitments the UK has already given within the WTO

“The Mode IV commitments in this agreement go no further than the EU’s offer in the 2006 Doha Development Round and are subject to safeguards, including restricted sectoral coverage and minimum skills thresholds. The UK’s implementation of the equivalent provisions in respect of Colombia and Peru have not given rise to any increase in admission to the UK of personnel employed by service suppliers located in those countries, and we do not believe that these provisions are any more likely to give rise to an impact on immigration. I can confirm that we consider the Mode IV provisions in the agreement to be incidental to the predominant purpose of the agreement. On that basis, the Government is minded to opt in to the proposed Council Decision.”

5.14The Minister considers that Ecuador’s accession to the agreement should be a mixed agreement and would challenge the Commission if it asserts it is exclusive EU competence:

“For the EU-Colombia and Peru free trade agreement, the Commission originally proposed that the agreement was wholly within EU competence, i.e. member states would not ratify the agreement in their national parliaments or be parties to it. 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.

“If the Commission proposes that the accession of Ecuador to the trade agreement between the EU and Colombia and Peru is within EU competence then the UK will challenge the Commission’s statement as we believe the agreement is of mixed competence as it includes elements which are member state competence.”

Previous Committee Reports

Thirty seventh Report HC 219–xxxvi (2015–16), chapter 21 (18 March 2015).


92 A mixed agreement means there are parts for which the EU is exercising competence and other parts for which Member States are exercising their competence.

93 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.




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17 June 2016