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Documents considered by the Committee on 7 December 2016 Contents

15Political Dialogue and Cooperation Agreement with Cuba

Summary and Committee’s conclusions

Committee’s assessment

Legally and politically important

Committee’s decision

Cleared from scrutiny; further information requested

Document details

(a) Joint Proposal for a Council Decision on the signing, on behalf of the European Union, and provisional application of the Political Dialogue and Cooperation Agreement between the European Union and its Member States, of the one part, and the Republic of Cuba, of the other part; (b) Joint Proposal for a Council Decision on the conclusion, on behalf of the European Union, of the Political Dialogue and Cooperation Agreement between the European Union and its Member States, of the one part, and the Republic of Cuba, of the other part.

Legal base

(a) Article 37 TEU; Articles 207, 209, 218(5) and 218(8), TFEU; Unanimity (b) Article 37 TEU; Articles 207, 209, 218(6)(a) and 218(8), TFEU; Unanimity

Department

Foreign and Commonwealth Office

Document Numbers

(a) (38103), 12495/16 + ADD 1, JOIN(16) 42; (b) (38104), 12497/16 + ADD 1, JOIN(16) 43

15.1The Political Dialogue and Cooperation Agreement with Cuba (PDCA) is the first bilateral agreement between the EU and Cuba. It is intended to replace a Council Common Position of December 1996.

15.2The objective of the Agreement is to create a stable framework for EU-Cuba relations instead of ad hoc dialogue and piecemeal cooperation that has characterised the relationship between the EU and Cuba to this point. The PDCA will serve as a platform for increased cooperation and dialogue on a very broad range of policy areas, across three main pillars: political, cooperation and trade.

15.3When we first considered the proposals, we noted that the Agreement is a mixed agreement19 but that there is a familiar lack of clarity as to the extent to which the EU and the Member States are exercising competence. We granted a waiver from scrutiny for document (a) on the signing and provisional application of the document on condition that:

15.4We also noted that the PDCA with Cuba raises questions about post-Brexit relations between the UK and Cuba.

15.5In response, the Minister for Europe and the Americas, (Sir Alan Duncan), explains that the elements of the PDCA to be provisionally applied by the EU will be explicitly set out. The UK considers that the list does not cede any competence to the EU. New language has also been incorporated making it clear that provisional application does not “prejudge the allocation of competences between the Union and its Member States in accordance with the Treaties.” On post-Brexit arrangements, the Minister assures that Committee that the UK “will work with both the EU and WTO to minimise disruption to our trading partners and secure positive outcomes for British businesses.”

15.6While the Minister’s letter was dated 8 November, it was not transmitted to Parliament until 28 November due to an administrative oversight. This was regrettable as we were unable to clear the Council Decision on conclusion (document (b)) from scrutiny before its agreement in Council. The Government nevertheless chose to support the agreement. While we take no issue with the override, we expect the Minister to write to us to explain the circumstances and to confirm that the override took place.

15.7At our meeting of 26 October, we granted a scrutiny waiver for the Decision on the signing and provisional application of the Agreement (document (a)) on conditions stated in paragraph 3 above.

15.8In respect of the first bullet point the Minister’s letter makes no attempt at providing the indication sought. We therefore do not consider that the Minister has complied with this condition of the scrutiny waiver and that a scrutiny override has arisen. The fact that neither the draft text for signature and provisional application of the Agreement nor the draft text for its conclusion provides any clarification of the respective exercise of competence by the EU and its Member states in signing or concluding the Agreement indicates that no steps have been taken.

15.9In respect of the second bullet point, the Minister has not provided assurance that provisional application of the Agreement only applies to matters of exclusive EU competence, as we sought.22 However the use of a list of matters to be provisionally applied (as opposed to provisionally applying the whole agreement) is helpful in meeting our competence concerns over provisional application, as is the fact that the exercise of EU competence in development co-operation does not prevent Member States exercising theirs.

15.10We note the assessment that the positive list of matters to be provisionally applied does not “cede any competence to the EU”. However, whilst he characterises a recital that “Provisional application of parts of the Agreement does not prejudge the allocation of competences between the Union and its Member States in accordance with the Treaty” as a “legal safeguard”, it can equally be regarded as evidence of a fudge.

15.11We clear both proposals from scrutiny and await an explanation from the Minister, in accordance with paragraph (4) of the House’s Scrutiny Reserve Resolution. In doing so we draw the attention of the House to these documents as another instance of the Government glossing over the issue of the extent to which the EU is exercising competence and thereby undermining its own policy that the EU should normally only exercise its exclusive competence in respect of international agreements. As we indicated in our earlier Report, it is important that the issue of competence should be clear, given that the Commission is actively seeking to limit Member States’ involvement in international agreements.

Full details of the documents

(a) Joint Proposal for a Council Decision on the signing, on behalf of the European Union, and provisional application of the Political Dialogue and Cooperation Agreement between the European Union and its Member States, of the one part, and the Republic of Cuba, of the other part: (38103), 12495/16 + ADD 1, JOIN(16) 42; (b) Joint Proposal for a Council Decision on the conclusion, on behalf of the European Union, of the Political Dialogue and Cooperation Agreement between the European Union and its Member States, of the one part, and the Republic of Cuba, of the other part: (38104), 12497/16 + ADD 1, JOIN(16) 43.

Background

15.12The Agreement consists of five Parts:

15.13Further details on the objectives and content of the Agreement were set out in our Report of 26 October.23

15.14In our earlier Report, we observed:

“[The PDCA with Cuba raises] the familiar legal issue of the lack of transparency as to the extent to which the EU is exercising competence and the extent to which the Member States are exercising competence. It is the policy of the Government that Member States should normally exercise their competence, including shared competence, leaving the EU to exercise only its exclusive competence. It is important for Member States to assert their competence in a concrete fashion as it is clear from the Singapore and Canada Agreements that the EU Commission is seeking to limit Member States’ involvement in international agreements. This agreement includes provisions on the four subjects currently giving rise to most contention in litigation on the Singapore agreement: transport, investment, property rights and sustainable development.

“Furthermore Article 86 of the agreement provides for the European Union (and not expressly the Member States) to trigger provisional application of this Agreement. The proposal would authorise the EU to trigger provisional application of the whole of the Agreement including the (so far unspecified) matters in respect of which Member States are otherwise exercising competence. The sensitivity of provisional application can be judged from the fact that the German Constitutional Court approved German agreement to the Comprehensive Economic and Trade Agreement with Canada on the basis that provisional application was limited to matters which were of exclusive EU competence and that Germany (and therefore other Member States) had the power to terminate provisional application if this was not the case.”

15.15On post-Brexit relations, we asked whether the PDCA, or any part of it, would apply to the UK after the UK has officially left the EU and whether the UK would seek to replace any provisions of this agreement which do not apply post-Brexit with an agreement of its own.

Minister’s letter of 8 November 2016

15.16The Minister reported:

“There have been some important changes to the draft Council Decisions since they were sent to your Committee with my Explanatory Memorandum on 5 October, following further negotiations in Brussels. Please find enclosed copies of the latest draft texts.

“My Memorandum noted that the European Commission was considering provisional application of the entire Agreement on behalf of the EU, ahead of ratification by individual Member States. The UK and other Member States have since agreed with the Commission a positive ‘listing’ approach to specify the elements of the PDCA that will be provisionally applied by the EU pending its full entry into force. This is consistent with the approach taken on other EU-third country agreements, including the EU-Canada Strategic Partnership Agreement.

“Details of the articles to be provisionally applied are set out in the re-drafted Council Decision on signature and provisional application of the PDCA. The UK’s assessment is that the list does not cede any competence to the EU. The Committee will also note that this Decision now includes legal safeguarding language, following a concerted push by the UK and a number of key Member States, which makes clear that “The provisional application of parts of the Agreement does not prejudge the allocation of competences between the Union and its Member States in accordance with the Treaties.” In relation to those provisions of the Agreement which fall within the EU’s development cooperation competence, ‘the exercise of that competence shall not result in Member States being prevented from exercising theirs’ (Art. 4(4), Treaty on the Functioning of the European Union).” 24

15.17On the post-Brexit issues, the Minister says:

“As the Committee is aware, consideration of whether and how we could secure continued UK access to the trade preferences negotiated by the European Union forms a key part of our post-EU trade policy. We are clear on the importance of ensuring that British businesses do not lose favourable market access opportunities. We will work with both the EU and WTO to minimise disruption to our trading partners and secure positive outcomes for British businesses. Further information on the post-EU trade policy will be provided to Parliament in due course.”

Previous Committee Reports

Fifteenth Report HC 71-xiii (2016–17), chapter 3 (26 October 2016).

19 A mixed agreement is entered into jointly by the EU and its Member States in their own right; the Member States exercise competence over matters for which only they have competence and, possibly, matters which are shared competence for which either the EU or the Member States can exercise competence

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

21 Exclusive EU competence must be exercised by the EU.

22 Exclusive competence must be exercised by the EU. Shared competence can be exercised

23 Fifteenth Report HC 71–xiii (2016–17), chapter 3 (26 October 2016).

24 The substantive areas excluded from provisional application are the provisions on: money laundering, consular services, maritime transport, good governance in taxation, border security aspects of customs and co-operation on non-agricultural geographic indication in respect of intellectual property.



9 December 2016