Select Committee on European Communities Eleventh Report



Letter from Doug Henderson MP, Minister of State, Foreign and Commonwealth Office, to Lord Tordoff, Chairman of the Committee

  I am writing to let you know about a Council Decision agreed at the 24-25 November GAC (for which I attach an Explanatory Memorandum) [not printed] and to explain why, regrettably, it was not possible in this case to fulfil the normal scrutiny procedures.

  The OCT Decision governs relations between the EU and the overseas territories of its Member States. All UK Dependent Territories (except Gibraltar and the Sovereign Base Areas) are covered by it. A mid term review of the Decision has been underway since 1996. Movement has been blocked for the past year because of Netherlands intransigence about changes to the trade aspects of the Decision.

  As a result, safeguard measures have been imposed on rice from OCTs (Explanatory Memoranda on safeguard action were submitted in February and June this year). This directly affected the rice-milling factories in Turks & Caicos Islands and Montserrat (the latter's economy had already been severely disrupted by the volcanic activity). The disbursement of aid funds allocated to OCTs has also been delayed, causing difficulties for our Dependent Territories awaiting funds, notably St Helena. Resolution of the issue was therefore urgent to avoid further damage to the interests of our Dependent Territories.

  At the 6 October GAC, agreement was reached on a political compromise covering the trade and aid elements of the mid term review, thus allowing for final discussions of a definitive text. But a case brought in the Dutch courts by a sugar-processing firm from the Netherlands Antilles prevented the Netherlands government from implementing the agreement, pending a ruling from the ECJ. On 20 November, the Dutch higher court over-ruled this judgment and the Dutch Cabinet, meeting on 21 November with ministers from Netherlands OCTs, agreed to implement the outcome of the mid term review.

  This unexpected development left the way open for agreement at the GAC yesterday. A faxed version of the final text of the mid term review was received on 18 November but it was not certain at that time that the Netherlands would not seek to reopen it until the outcome of the court case. Unfortunately, the court ruling when it came and the subsequent Cabinet decision did not leave sufficient time for the usual scrutiny procedures.

  In these circumstances, I felt that to maintain the scrutiny reserve after so many months of pushing the Dutch government to agree the mid term review would have sent the wrong signals about our commitment to our own Dependent Territories. Moreover, a further delay of the agreement beyond 1 December would have led to the reimposition of safeguard measures against OCT exports (including rice from Turks & Caicos Islands).

  I recognise that this procedure is unsatisfactory for you and for us. However we had no way of influencing the judicial timetable in the Hague nor of being sure of the outcome. In the circumstances, I hope that you will understand why we felt it necessary to agree the Decision.

25 November 1997

Letter from Lord Tordoff, Chairman of the Committee, to Doug Henderson MP, Minister of State for Foreign and Commonwealth Affairs, Foreign and Commonwealth Office

  Thank you for your letter of 25 November with which you enclosed an Explanatory Memorandum about the Council decision on the association of the Overseas Countries and Territories (OCTs) with the European Union.

  Your account of events leading to the Council Decision makes interesting reading. I accept that, in the circumstances, you had good reasons for not maintaining the scrutiny reserve; and I am glad to receive your assurance that you have taken action to try to prevent this sort of situation arising again. However, I do wonder whether you might not have thought it prudent to submit an Explanatory Memorandum following agreement on the political compromise reached at the 6 October General Affairs Council.

3 December 1997

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