Scrutiny of international agreements; Treaties considered on 19 March 2019 Contents

Chapter 3: The agreement with the Palestine Liberation Organization, for the benefit of the Palestinian Authority

Interim Political, Trade and Partnership Agreement between the United Kingdom of Great Britain and Northern Ireland, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part [CP 61]39

Introduction

56.Although the UK-Palestinian Authority Interim Political, Trade and Partnership Agreement was laid on 26 February 2019, it is not formally subject to Section 20 of the Constitutional Reform and Governance (CRAG) Act; nor is it subject to a statutory parliamentary scrutiny process. This is because the CRAG Act applies only to ‘treaties’, defined in section 25 as written agreements “between States or between States and international organisations”. The UK does not recognise Palestine as a State, so the Agreement with the Palestinian Authority is not a treaty for the purposes of the Act.

57.In laying the Agreement, the Government has, in the words of the EM, sought “to provide Parliament with an equivalent opportunity to scrutinise it as it has had for other trade agreements”, while also making it clear that “nothing in the UK-Palestinian Authority Interim Agreement should be interpreted as recognition by the UK of Palestine as a State”. We have approached the Agreement in the same spirit, and the Agreement was considered by the EU External Affairs Sub-Committee at its meeting on 13 March.

58.The UK-Palestinian Authority Interim Agreement is a short-form agreement that incorporates, mutatis mutandis, the EU-Palestinian Authority Interim Association Agreement on Trade and Cooperation.40 The UK Agreement seeks to ensure continuity of effect with this precursor agreement.

59.An overview of the UK’s trade with the Palestinian Authority is given in Box 2.

Box 2: UK-Palestinian Authority trade

There is little UK trade with the Palestinian Authority. The Palestinian Authority is the UK’s joint 186th largest trading partner, accounting for less than 0.1% of UK trade. Bilateral trade in goods and services in 2017 amounted to just £17 million.

Vehicles are, by some distance, the most popular UK good exported to the Palestinian Authority. The main exports from the Palestinian Authority to the UK are fruits and nuts, and animal and vegetable fats and oils.

Source: Department for International Trade, Continuing the United Kingdom’s trade relationship with the Palestine Liberation Organisation (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, February 2019: https://www.gov.uk/government/publications/continuing-the-uks-trade-relationship-with-the-palestinian-authority-parliamentary-report [accessed 13 March 2019]

Key differences between the UK-Palestinian Authority Interim Agreement and the precursor agreement

60.The Agreement’s aim is to provide continuity in UK-Palestinian Authority relations, and changes have been kept to a minimum. The paragraphs below provide a summary of the key amendments, which are designed either to ensure continuity of effect with the existing EU-Palestinian Authority Interim Agreement, or to remove an obligation that would be inappropriate in a bilateral context.

Future amendments to the Agreement

61.An amendment clause has been added (Article 9), which sets out that any amendments must be agreed in writing and will enter into force on an agreed date following the completion of domestic legal requirements and procedures. This does not mean that amendments need to be made to the Agreement, but provides a mechanism for making them if required.

62.We reiterate the point made in our report Scrutiny of international agreements: Treaties considered on 26 February 2019,41 where we called on the Government to state clearly the circumstances in which, where significant amendments are made, they would be subject to the scrutiny processes provided for by the Constitutional Reform and Governance Act 2010. While this information has not been included in the parliamentary report for this Agreement, DIT officials have confirmed that they will explore ways in which this could be clarified in future.

Approximation

63. The EU-Palestinian Authority Agreement is an Association Agreement and, as such, includes provisions on the approximation of the Palestinian Authority’s laws to EU law. The Government explains that those references have been removed from the Agreement, as they “would create an inappropriate commitment in a UK specific bilateral context”.

Entry price system

64.The EU-Palestinian Authority Agreement contains an Entry Price System (EPS), which applies to 15 types of fruit and vegetables. It ensures that during the European growing seasons, an additional duty is charged if incoming fruits and vegetables are below a pre-determined entry price. The Annex to the UK-Palestinian Authority Agreement does not establish such an EPS, but the UK reserves the right to establish and implement an EPS in the future. The UK would need to notify the Palestinian Authority in advance of its intent to apply an EPS. It would only apply to the 15 types of fruits and vegetables to which the EU EPS applies, and it would replicate the EU’s price and additional duty levels.

Cumulation

65.As with previous agreements considered by the Committee, the UK-Palestinian Authority Agreement will allow for EU material to be recognised as originating content in exports to one another under certain conditions. EU processing can, under certain conditions, also be recognised in UK exports to the Palestinian Authority.42

66.However, both the Palestinian Authority and the EU are Parties to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention), adding a layer of complexity to the cumulation arrangements that is not fully reflected in the parliamentary report. Materials from EFTA states (Switzerland, Norway, Iceland and Liechtenstein), Turkey and other countries participating in the PEM Convention can also count as originating in the UK or the Palestinian Authority. In line with the PEM Convention, however, the application of these extended cumulation provisions is conditional upon the UK and the Palestinian Authority having concluded FTAs with those other countries.43

Governance

67.The bodies governing the EU-Palestinian Authority Agreement have been retained mutatis mutandis. A Joint Committee is tasked with ensuring the proper operation of the Agreement and can appoint specialised committees. Previously adopted decisions by the Joint Committee of the EU-Palestinian Authority Agreement will be considered as adopted by the UK-Palestinian Authority Joint Committee (or the relevant specialised committee).

Territorial application

68.The Agreement applies to both the West Bank and the Gaza Strip. As the Gaza Strip is controlled by Hamas, and given the current state of Palestinian reconciliation talks, it is unlikely that the Palestinian Authority will be able to administer the Agreement on behalf of the territory. It is also questionable how far the Agreement would have any tangible impact on the people of Gaza, given the restrictions imposed by the Israeli and Egyptian blockade. Having said this, these obstacles to implementation are not new—they already exist under the current EU-Palestinian Authority Interim Agreement.

69.Products produced in the Israeli settlements located within the Occupied Palestinian Territories are not entitled to benefit from preferential tariff treatment (see above, paragraph 33).

70.The Agreement applies to Great Britain and Northern Ireland, and also, in part, to the Crown Dependencies and the British Overseas Territories. While the parliamentary report and EM explain that the UK-Palestinian Authority Interim Agreement will apply to those territories for whose international relations the UK is responsible to the same extent as the precursor agreement, the EU-Palestinian Authority Interim Agreement itself refers back to the underlying EU treaties, which only apply selectively to the Crown Dependencies and the British Overseas Territories.

71.As we stated in our report Scrutiny of international agreements: Treaties considered on 26 February 2019, “it would be helpful if, in future, the explanatory material accompanying trade agreements included a list of those territories to which the agreements will apply”.44 DIT officials have indicated their readiness to consider options for making the territorial application section in the explanatory materials clearer in future.

Entry into force and provisional application

72.For the Agreement to enter into force, it must first be ratified by both the UK and the Palestinian Authority. It can then either come into force at the end of the transition period under the Withdrawal Agreement or, if no agreement is reached, upon the UK’s exit from the EU. The Agreement also allows for provisional application. This is to ensure continuity should the UK cease to be a party to EU agreements before ratification processes can be completed.

Consultation

73.We note that the Government’s EM, while making reference to the Government’s ongoing engagement with the private sector and the devolved administrations on trade policy matters, does not clarify if specific consultations have taken place on the Agreement. We reiterate the points made in paragraphs 38–39 above.

Conclusion

74.If the UK-Palestinian Authority Interim Political, Trade and Partnership Agreement had been a treaty, for the purposes of the Constitutional Reform and Governance Act 2010, we would have been minded to draw it to the special attention of the House. As it is not a treaty, and is not subject to the formal parliamentary scrutiny processes set out in that Act, we report it for information.


39 Interim Political, Trade and Partnership Agreement between the United Kingdom of Great Britain and Northern Ireland, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part, CP 61, 2019: https://www.gov.uk/government/publications/ms-no142019-interim-political-trade-and-partnership-agreement-between-uk-and-plo-for-the-benefit-of-the-palestinian-authority [accessed 14 March 2019]

40 Formally, the Euro-Mediterranean Interim Association Agreement on Trade and Cooperation between the European Community, of the one part, and the Palestine Liberation Organization (PLO) for the benefit of the Palestinian Authority of the West Bank and the Gaza Strip, of the other part.

41 European Union Committee, Scrutiny of international agreements: Treaties considered on 26 February 2019 (31st Report, Session 2017–19, HL Paper 300)

42 More detail on cumulation of origin is available in Box 2 of our report Scrutiny of international agreements: Treaties considered on 26 February 2019 (31st Report, Session 2017–19, HL Paper 300)

43 Cumulation is complex, but our understanding is that the FTAs required for cumulation arrangements with Parties to the PEM Convention will depend on the export destination of the product.

44 European Union Committee, Scrutiny of international agreements: Treaties considered on 26 February 2019 (31st Report, Session 2017–19, HL Paper 300)




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