Documents considered by the Committee on 13 November 2017 Contents

17Strategic Agreements with Australia and New Zealand

Committee’s assessment

Legally important

Committee’s decision

(a) Not cleared from scrutiny; further information requested;

(b) Not cleared from scrutiny; further information requested

Document details

(a) Joint Proposal for a Council Decision on the conclusion of the Framework Agreement between the European Union and its Member States of the one part, and Australia, of the other part

(b) Joint Proposal for a Council Decision on the conclusion of the Partnership Agreement on Relations and Cooperation between the European Union and its Member States of the one part, and New Zealand, of the other part

Legal base

Article 37 TEU and Articles 207, 212(1), 218(6)(a) and the second paragraph of 218(8) TEU (both); unanimity, EP consent

Department

Foreign and Commonwealth Office

Document Number

(a) (38325), 14996/16, JOIN(16) 51

(b) (38326), 14997/16, JOIN(16) 54

Summary and Committee’s conclusions

17.1These proposals would authorise the EU to conclude (ratify) high level partnership agreements with Australia and New Zealand. They are designed to strengthen cooperation across a wide spectrum of policy fields including human rights, non-proliferation of weapons of mass destruction and the fight against terrorism; cooperation on economic and trade matters, health, the environment, climate change, education, culture, labour, disaster management, fisheries and maritime affairs, transport, legal cooperation, and combatting money laundering and terrorist financing, organised crime and corruption. They are a precursor to future trade agreements for which the Commission is now seeking negotiating mandates (see Chapter 40).

17.2The previous Committee considered earlier proposals for Council Decisions authorising the EU to sign these agreements. It raised no policy issue but drew the proposals to the attention of the House as examples (amongst others) of the then Government glossing over the issue of competence, in particular the extent to which the EU or the Member State are exercising shared competence.208 The Government’s stated policy is that where competence is shared209 it should normally be exercised by the Member States, leaving the EU to act only where its competence is exclusive. In agreeing those Decisions, the previous Government overrode scrutiny for reasons which the previous Committee considered were unjustified.

17.3The previous Committee considered these particular proposals for the first time on 18 January 2017, raised the same legal issues, and in the light of Brexit asked the Minister (Sir Alan Duncan) whether he considered that this agreement will help or hinder a future trade agreement between the UK and New Zealand and whether there has been any progress in scoping such an agreement.

17.4On 1 February this year, before dissolution, there was correspondence from the Minister in which he updates our predecessors on progress towards the Free Trade Agreements.

17.5He also indicates that he had agreed “to the adoption of the Council Decision on the Conclusion of the EU—New Zealand partnership” on 27 January this year. However, the Minister later clarifies, in a letter of 27 April 2017 received after dissolution of Parliament, that the agreement in the Council had, in fact, been to refer the matter to the European Parliament for its consent—a legal requirement before the Council may adopt the Decision. The indicative date for a European Parliament plenary to consider the New Zealand Agreement is 13 November.

17.6On 11 October the Minister wrote to the Committee indicating that he had overridden scrutiny in respect of the Australia Agreement, by agreeing to it being sent to the European Parliament for consent. It is currently under consideration by the Foreign Affairs Committee of the European Parliament on 5 October and there is not yet an indicative date for its consideration in plenary.

17.7The Resolution of the House of 17 November on Scrutiny of European Business restricts any Minister agreeing to European Community (now European Union) legislation, before it has cleared scrutiny unless the proposal is confidential, routine or trivial (which these are not) or there are “special reasons” which must be explained to this Committee or the House. For the purposes of this Resolution “agreement” can include “political agreement”.

17.8We ask again what steps the Minister intends to take, either by seeking amendment to the legal text or by way of a minute statement, to clarify that the EU is only exercising competence to conclude these agreements to the extent that such competence is exclusive. The fact that provisional application of the agreement is limited does not meet this objection as the competence to trigger provisional application is different and distinct from the competence to conclude an agreement.210

17.9We also ask what progress has been made for the ratification of these agreements by the UK.

17.10To the extent that agreement in the Council to refer these proposals to the European Parliament for its consent constitutes a “political agreement” and effectively binds the UK politically, there has been a scrutiny override. The Minister appears to accept that this is the case. This being so, we consider the Minister’s original justification required clarification in one respect and remains unconvincing in others.

17.11In his first letter of 1 February the then Minister seeks to justify the override of scrutiny in respect of the New Zealand Agreement for the following reasons:

17.12In respect of the Australia Agreement the Minister explains in his letter of 11 October 2017 that he overrode scrutiny by this Committee in order “to ensure the UK is not isolated in delaying progress” whilst the Committee remained to be constituted. In this context we note the slow pace at which the European Parliament decides to provide or withhold its consent, rendering a slight delay in referring the matter to it less material as a cause of delay.

17.13Given that both proposals remain to be adopted (after consent has been received from the European Parliament) we retain them under scrutiny pending a response to the question raised by the previous Committee and ourselves.

Full details of the documents

(a) Joint Proposal for a Council Decision on the conclusion of the Framework Agreement between the European Union and its Member States of the one part, and Australia, of the other part: (38325), 14996/16, JOIN(16) 51; (b) Joint Proposal for a Council Decision on the conclusion of the Partnership Agreement on Relations and Cooperation between the European Union and its Member States of the one part, and New Zealand, of the other part: (38326), 14997/16, JOIN(16) 54.

The Minister’s letter of 1 February 2017

17.14This letter responded to the request for information on the prospects of UK trade agreements with New Zealand and Australia make in the Report of 18 January 2017:

“As the Prime Minister has said, the UK will be a champion of free trade and support efforts towards global trade liberalisation. The Government has reaffirmed on a number of occasions that while we remain a member of the EU we will continue to support its free trade agenda. This includes efforts to prepare for, and eventually launch, FTA negotiations with Australia and New Zealand. The EU’s scoping process for these FTAs is underway and we expect them to be finalised this year. Before that process is complete, it is too early to assess what impact EU FTAs with Australia and New Zealand might have on any possible future bilateral UK trade agreements.

“On scoping for such agreements, the Government has established mechanisms to take forward discussions with both Australia and New Zealand on how we can develop our trade and investment relationships, and discuss trade issues of mutual interest in the context of our departure from the EU. With Australia we established a Trade Working Group in September 2016, which held its inaugural meeting on 30 November 2016. The Working Group discussed its early priorities and possible parameters of a future UK-Australia free trade agreement once the UK leaves the EU. The UK-New Zealand Trade Policy Dialogue is likely to have its first meeting early this year.”

17.15The then Minister sought to address the issue of competence:

“On the issue of competence, the Government was successful in securing a short list of Articles for provisional application and the division of competences is protected.”

17.16He then indicated that scrutiny had been overridden:

“As detailed in the Explanatory Memoranda, we did not have a timeframe for when the draft Council Decisions on Conclusion were to be adopted for these Agreements. The EU-New Zealand Partnership Agreement was brought forward for consideration at Council on 27 January. We have indicated on a number of occasions that we strongly support an EU-New Zealand trade deal and to not have supported it would have run counter to this. I therefore found myself in the position of having to agree to the adoption of the Council Decision on the Conclusion of the EU-New Zealand Partnership Agreement before your Committee had finished scrutinising the document. This was a procedural rather than policy issue. The EU-Australia Framework Agreement remains under scrutiny by your Committee.”

The Minister’s letter of 6 March 2017

17.17This letter responded to further inquiries as to the timing by the previous Committee:

“You asked for clarification on a number of timing issues for this Agreement. The EEAS confirmed on 23 January it would be brought forward for adoption at Council on 27 January, before your Committee had finished its scrutiny. The Agreement is currently with the European Parliament, and will be concluded when all EU Member States ratify the Agreement according to their own constitutional arrangements. The UK supports the Agreement’s swift conclusion.”

The Minister’s letter of 27 April 2017

17.18This letter elaborated on the timing issue:

“Article 3 of the Council Rules of Procedure states that items should be put on a provisional agenda at least 14 days beforehand. However, as you note, a Working Group can agree for an item to go to the Committee of Permanent Representatives (COREPER), to be taken at a Council afterwards.

“At the Asia Working Group on 18 January, the EEAS sought views on putting the EU-New Zealand Partnership Agreement to Council for approval to send it to the European Parliament, following its signature on 5 October 2016. We strongly support the Agreement and objecting to this item going to COREPER on 25 January would have run counter to our position and isolated us unnecessarily. As set out in my previous letter of 6 March, the EEAS only confirmed on 23 January it would be brought to Council on 27 January. Therefore, I found myself in the position of agreeing to its adoption before your Committee had finished its scrutiny.

“The Council Decision on 27 January referred the Agreement to the European Parliament for its consent prior to ratification. The Agreement will be considered by the EP’s Foreign Affairs Committee in due course. We have no timetable for the conclusion of the Agreement by the European Parliament or by other Member States.

“Given the upcoming General Election on 8 June, it will be for the new Government to take forward UK Parliamentary ratification in due course.”

17.19We observe that Article 3, the Council Rules of Procedure, does not envisage a Working Group foreshortening the time limits for matters to be put on a provisional agenda for the Council, and this view is wrongly attributed to the previous Committee. This provision does provide for items not on a provisional agenda to be agreed to be taken at a Council meeting if there is unanimity in favour.

The Minister’s letter of 11 October 2017

17.20The Minister updates the Committee on the Australia Agreement as follows:

“Following signature by Australia in the margins of the ASEM Summit on 8 August, the EEAS has sent the EU-Australia Framework Agreement to the European Parliament and Member States for ratification in parallel. Working level meetings on 12 and 20 September indicated the UK alone retained a scrutiny reserve on this document.

“As the Commons Scrutiny Committee has not been re-constituted since the General Election, I find myself in the position of having to agree to override the Committee’s scrutiny of this document to ensure the UK is not isolated in delaying progress.”

Previous Committee Reports

Twenty-sixth Report HC 71–xxiv (2016–17), chapter 6 (18 January 2017).


208 Competence to enter into agreements with third countries is legally complex and controversial. It can be exclusive (to either the EU or the Member States) or shared between them. The widely recognised consequence of competence being shared is that there is a political choice whether competence is exercised by the EU or the Member States.

209 Shared competence may be exercised by either the EU or its Member States; the choice is political.

210 A view expressed by the previous Committee, most recently on 22 February 2017 in relation to conclusion of the EU Afghanistan Agreement on Partnership and Development Agreement. We agree.




20 November 2017