Scrutiny of international agreements; treaties considered on 9 April 2019 Contents

Chapter 2: Agreement reported for information

Interim Economic Partnership Agreement between the United Kingdom of Great Britain and Northern Ireland, of the one part, and the Pacific States, of the other part (CP 76, 2019)11

11.The UK-Pacific States12 Interim Economic Partnership Agreement was laid on 20 March 2019, and the scrutiny period is scheduled to end on 7 May.13 It was considered by the EU External Affairs Sub-Committee at its meeting on 4 April.

12.The precursor agreement to the UK-Pacific States Interim Economic Partnership Agreement is the EU-Pacific States Partnership Agreement, signed in 2009.14 It is development-focused and therefore asymmetrical—it opens the developed market more than the developing one. The UK-Pacific States Economic Partnership Agreement seeks to ensure continuity of effect with the EU Agreement and, consequently, largely replicates it. It provides duty-free and quota-free access to the UK market for goods originating from the Pacific States and provides for a gradual reduction of duties for goods imported into the Pacific States from the UK. The Agreement, like the precursor EU Agreement, also replicates the provision in the Cotonou Agreement15 that allows for “appropriate measures” to be taken if human rights, democratic principles, the rule of law and good governance are violated.16 It is envisaged that suspension of the Agreement would only be a last resort.

13.The UK’s combined trade with the Pacific States accounts for less than 0.1% of UK trade. In 2017, UK trade in services was worth £200 million and UK goods exports accounted for £21 million. Main UK exports include different types of machinery and mechanical equipment, articles of iron or steel, and vehicles. The main UK goods imports from the Pacific States were animal and vegetable oils, sugar, preparations of meat and fish, beverages and spirits, and coffee, tea, mate17 and spices.

14.The Agreement—like other trade agreements previously considered by the Committee—introduces an extended cumulation of origin.18 This allows both parties to recognise, under certain conditions, products as originating if they incorporate materials originating in any of the contracting parties, the EU, other African, Caribbean and Pacific Group of States,19 or in the Overseas Countries and Territories.20 Processing in these states can, under certain conditions, also be recognised as processing in the contracting parties.21 The Government sets out that, without these provisions, products from the UK or a Pacific State using EU content would no longer meet the origin requirements for preferential treatment by the other party.22

15.In certain circumstances, and at the request of Fiji and Papua New Guinea, materials originating in a neighbouring developing country listed in an Annex to the Agreement can also be granted originating status if incorporated into a product. This list is currently blank.23 The report accompanying the Agreement makes no reference to these wider cumulation provisions and we would welcome an explanation of the legal basis for the extension of cumulation in this way.

16.While at present only Fiji and Papua New Guinea have signed the Agreement, other Pacific States may accede in future, and the EM and Parliamentary Report confirm that Samoa has recently acceded to the EU-Pacific States Agreement and started applying the Agreement provisionally on 31 December 2018. The Solomon Islands have submitted a formal accession request and Tonga has notified its intention to accede. Although Department for International Trade officials confirmed that the UK was awaiting a response from Samoa about possible accession to the UK Agreement, it would have been helpful if this information too had been covered in the explanatory materials.

17.The EU Agreement’s future amendment clause has been replicated in the UK Agreement. We reiterate the point made in our report Scrutiny of international agreements: Treaties considered on 26 February 2019,24 that the Government should 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.

18.Finally, the EM indicates that the Government is engaging with and has consulted those territories for whose international relations the UK is responsible and to which the Agreement will apply. It does not, however, provide any clear information on the extent of this consultation on the UK-Pacific States Agreement. It states that “the Government has regularly updated the Devolved Administrations and has shared the texts of parliamentary reports and explanatory memoranda with them”. This leaves it unclear whether the text of the UK-Pacific States Agreement has been shared with the devolved administrations, and if so, when. We reiterate the recommendation in our report Scrutiny of international agreements: Treaties considered on 12 February 2019,25 that the Government’s explanatory material should state clearly whether there has been consultation with the devolved administrations, industry or other stakeholders. In this context, we welcome the Department for International Trade’s assurance, in a letter from Baroness Fairhead dated 15 March 2019, that the Government will “now share text of agreements, once stable, with the DAs”26—though this commitment may have come too late to have influenced the consultation process on this Agreement.

19.We report the UK-Pacific States Economic Partnership Agreement to the House for information.


11 Interim Economic Partnership Agreement between the United Kingdom of Great Britain and Northern Ireland, of the on part, and the Pacific States, of the other part, CP 76, 2019: https://www.gov.uk/government/publications/ms-no152019-interim-economic-partnership-agreement-between-the-united-kingdom-of-great-britain-and-northern-ireland-and-the-pacific-states [accessed 3 April 2019]

12 The Pacific States who have signed the Agreement are the Republic of Fiji and the Independent State of Papua New Guinea.

13 This date takes account of the fact that both Houses will sit from 8–11 April. It will change if further sitting days are scheduled.

14 Council Decision (EU) of 13 July 2009 on the signature and provisional application of the Interim Partnership Agreement between the European Community, of the one part, and the Pacific States, of the other part, OJ L 272 (16 October 2009), p 1

15 The EU-Pacific States Agreement was established within the framework of the Cotonou Agreement, which contains a human rights clause. This clause was replicated in the EU-Pacific States Agreement. The Cotonou Partnership Agreement was signed in 2000 and is a legally binding agreement between the EU and 78 African, Caribbean and Pacific countries. It was designed to establish a comprehensive partnership with three pillars: development cooperation, political cooperation, and economic and trade cooperation. It is set to expire in February 2020. Subject to a transition period, the Cotonou Agreement will cease to apply to the UK on exiting the EU.

16 Annex IV, paragraphs 7, 11

17 Or maté: a traditional Pacific and South American drink.

18 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)

19 The African, Caribbean and Pacific Group of States comprises 79 African, Caribbean and Pacific states, all of them, save Cuba, signatories to the Cotonou Agreement.

20 Annex VIII to Protocol II defines overseas countries and territories as those listed in the annex, namely listed territories of several EU Member States and of the United Kingdom.

21 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)

22 Department for International Trade, Continuing the United Kingdom’s trade relationship with the Republic of Fiji and the Independent State of Papua New Guinea (“the Pacific States”) (March 2019) para 66: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/787083/continuing-the-uks-trade-relationship-with-the-republic-of-fiji-and-the-independent-state-of-papua-new-guinea-the-pacific-states.pdf [accessed 5 April 2019]

23 Annex VIII(a) to Protocol II

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

25 European Union Committee, Scrutiny of international agreements: treaties considered on 12 February 2019 (29th Report, Session 2017–19, HL Paper 287)

26 Letter from Baroness Fairhead, Minister of State for Trade and Export Promotion, Department for International Trade, 15 March 2019: https://www.parliament.uk/documents/lords-committees/eu-select/scrutiny-brexit-related-treaties/baroness-fairhead-letter-190319.pdf




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