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Scrutiny of international agreements: treaties considered on 4 February 2020 Contents

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Chapter 1: Agreement drawn to the special attention of the House

Agreement establishing an Association between the United Kingdom of Great Britain and Northern Ireland and the Kingdom of Morocco (CP 202, 2019)1

1.The UK-Morocco Association Agreement was laid on 20 December 2019, and the scrutiny period is scheduled to end on 11 February 2020. It was considered by the EU External Affairs Committee at its meeting on 30 January.

2.The precursor agreement to the UK-Morocco Agreement is the EU-Morocco Agreement,2 which entered into force in 2000. It incorporates a trade agreement and outlines a framework for political, economic, social and cultural cooperation. EU-Morocco trade amounted to €37.4bn in 2017. This represented 60% of Morocco’s total trade, but only 1% of the EU’s trade with third countries.3

3.The UK-Morocco Agreement seeks to ensure continuity of effect with the EU Agreement by incorporating it mutatis mutandis4 with only a small number of modifications. Consequently, the UK Agreement has been published in short form. The UK-Morocco Agreement also incorporates the EU-Morocco Dispute Settlement Mechanism Protocol, which was signed in 2012.5

Entry into force

4.For the Agreement to enter into force it must be ratified by both the UK and Morocco. It will only come into force once the precursor EU Agreement ceases to apply to the UK and on the first day of the second month after both Parties have confirmed that their domestic ratification procedures have been completed.

5.To ensure continuity, should the UK cease to be a Party to the EU Agreement before ratification processes can be completed, the Agreement allows for provisional application.

The UK’s trade relationship with Morocco

6.Trade with Morocco accounts for less than 0.2% of UK trade. In 2018, total trade in goods and services was £2.5 billion. Main UK goods exports include those in the ‘vehicles other than railway or tramway stock’ and ‘minerals, fuels and oils’ categories of the Harmonised System—the international nomenclature for the classification of products. Main UK goods imports from Morocco include goods in the ‘electrical machinery and equipment’ and ‘vehicles other than railway or tramway stock’ categories.

Rules of origin and cumulation

7.Like other trade agreements previously considered by the Committee, the Agreement introduces an extended cumulation of origin. This allows both parties to recognise content and processing from the EU as originating in the UK or Morocco in exports to one another. The Government notes that, without these provisions, products from the UK or Morocco incorporating EU materials or processing would no longer meet the origin requirements for preferential treatment by the other party.6

8.In addition, wider cumulation provisions apply to the UK and Morocco, subject to a trade agreement being in place between the relevant parties. Products incorporating materials originating in the EFTA states (Switzerland, Liechtenstein, Iceland and Norway), Turkey and those countries that signed the Barcelona Declaration in 19957 can also be considered as originating in Morocco or the UK, provided they have undergone subsequent processing in the UK or Morocco beyond a minimum level.

9.In certain circumstances, working or processing carried out in Algeria or Tunisia can be considered as originating in Morocco; while working or processing carried out in Iceland, Norway, Algeria or Tunisia can be considered as originating in the UK. In both cases, this only applies provided the goods have undergone subsequent working or processing in Morocco or the UK, respectively.

Tariff rate quotas

10.While tariff levels in the UK Agreement will remain the same as in the precursor EU Agreement, tariff rate quotas (TRQs) have been resized to reflect trade flows between the UK and Morocco. To maintain market access, both sides agreed to provide a minimum level of access by basing TRQs on a proxy measure where data showed historic trade as being very low or non-existent. The UK-Morocco Agreement contains an additional clause explaining that the complex “monthly sub-allocation administration system” for the inward TRQ on tomatoes has been removed. FCO officials explained that this was an operational simplification, which maintains the effect of the EU Agreement, while simplifying the process and guaranteeing that the TRQ relating to tomatoes can be brought into force as soon as possible.

Geographical indications

11.The EU has only sought to incorporate extensive geographical indication (GI) provisions in its trade agreements since 2009, and as a result, the UK-Morocco Agreement also does not include substantive commitments on the protection of GIs. Instead, the UK-Morocco Agreement (like the EU Agreement) refers to broader international standards and commitments on intellectual property rights.

Social security

12.Under the EU-Morocco Agreement, Moroccan nationals legally employed in the EU for a certain period of time qualify for certain benefits and provisions on pensions and medical care. The time spent in any EU country currently counts towards this, and an amendment has been made to the UK-Morocco Agreement to allow this to continue. However, there is no agreement yet between the EU and UK on sharing the data that would underpin such an arrangement. FCO officials have told us that the Government “is confident” that an agreement, which would be in the interests of both parties, will be reached. Nevertheless, if an arrangement is not reached, Moroccan nationals resident in the UK who would otherwise qualify for certain benefits by virtue of having previously been resident in an EU Member State may be unable to prove their eligibility and be disadvantaged as a result.8

Institutional arrangements and future amendments to the Agreement

13.The institutional and governance provisions of the Agreement allow for significant amendments. Under Article 10 of the UK-Morocco Agreement, the Parties may mutually agree to amend the text of the Agreement once they have completed their “internal procedures”. According to the Parliamentary Report, in the UK “amendments to the Agreement that are expressly subject to a formal exchange of notes to confirm completion of internal procedures would engage the process of Parliamentary scrutiny set out in the CRAG Act”.9 However, this risks leaving a scrutiny gap in those circumstances where amendments would not require a formal exchange of notes. Accordingly, we reiterate our previous recommendation that to support appropriate scrutiny in future, the Government should report regularly to Parliament on changes to international agreements.10

14.The Association Council and Association Committee—the main governance bodies established under the Agreement—may also make modifications in specified technical areas.11 These amendments would be unlikely to engage the parliamentary scrutiny process under the CRAG Act.

Human rights

15.Like the precursor EU Agreement, the UK Agreement includes a human rights clause, setting out “respect for democratic principles and fundamental rights” as an essential element of the Agreement. In the event of material breach, appropriate measures may be taken, including suspension of the Agreement.

Application of the Agreement to Gibraltar and the Crown Dependencies

16.We welcome the fact that the Government has provided detailed information on the geographical extent of agreements, clarifying which elements would apply to Gibraltar and to the Crown Dependencies. We also welcome the Minister’s explicit confirmation in the EM that “HMG has shared the stable text of the Agreement with the DAs, the Crown Dependencies and Gibraltar”. This reflects the recommendations in the Committee’s report on scrutiny of international agreements.12

Application of the Agreement to specified goods from Western Sahara

17.The UK has replicated in its agreement with Morocco the trade preferences for specified goods from Western Sahara that are found in the EU-Morocco Agreement. The Committee has received representations from the Trade Justice Movement about this issue, and an open letter was published on 24 January, signed by that organisation and other civil society groups, as well as trade unions.13

18.Western Sahara’s status is disputed. It was annexed by Morocco after Spain withdrew from its former colony in 1975, but the Polisario Front14 has been seeking full independence for Western Sahara since that time, and the conflict remains unresolved. The UK’s official policy position is that it considers the status of Western Sahara as “undetermined” and that it supports “UN-led efforts to achieve a lasting and mutually acceptable political solution that provides for the self-determination of the people of Western Sahara”.15

19.In 2012 the EU and Morocco agreed to bring agricultural and fishery products from Western Sahara within the scope of the EU-Morocco Agreement. This was challenged by the Polisario Front at the Court of Justice of the European Union (CJEU). In December 2018 the CJEU ruled that there was no legal basis for amending the EU-Morocco Agreement in 2012 to include agricultural and fishery products from Western Sahara within the scope of the Agreement.16 Following that judgment, the Commission conducted a consultation exercise in Western Sahara and agreed compromise wording in 2019, so that preferences under the EU-Morocco Agreement would apply only to those goods from Western Sahara “subject to controls by customs authorities of Morocco”. The Polisario Front object to this wording and do not consider the consultation exercise to have been sufficiently exhaustive. They have therefore lodged a new challenge at the CJEU, which has yet to be heard.17

20.FCO officials told us that they are confident the UK Agreement is consistent with EU law and the Government’s position on the status of Western Sahara, and that the Government will consider carefully the implications of any future ruling from the CJEU. They also explained that conducting any further consultation on the 2019 EU amendment was deemed inconsistent with the UK’s mandate to ensure only technical replication of EU agreements while still an EU Member State. Nevertheless, the inclusion of Western Sahara in the UK Agreement raises an important question of policy about how the UK should balance its commitment to Western Sahara’s “undetermined” status with its pursuit of a trade agreement with Morocco.

21.We therefore report the UK-Morocco Association Agreement for the special attention of the House, on the grounds that:

• It is politically important and gives rise to issues of public policy that the House may wish to debate prior to ratification.

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