Explanatory Memorandum to COM(2016)631 - Introduction of temporary autonomous trade measures for Ukraine supplementing the trade concessions available under the Association Agreement - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2016)631 - Introduction of temporary autonomous trade measures for Ukraine supplementing the trade concessions available under the ... |
|---|---|
| source | COM(2016)631  |
| date | 29-09-2016 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
The Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part (hereinafter referred to as ‘the Agreement’), was signed by the Parties in two parts, in March and June 2014. The Association Agreement has been provisionally applied in some parts since 1 November 2014. The Deep and Comprehensive Free Trade Area (DCFTA) has been provisionally applied since 1 January 2016.
One of the objectives of the Agreement is to establish conditions for enhanced economic and trade relations leading towards Ukraine's gradual integration with the EU Internal Market, including by setting up a Deep and Comprehensive Free Trade Area as stipulated in Title IV (Trade and Trade-related Matters) of the Agreement, and to support Ukraine's efforts to complete the transition into a functioning market economy by means of, inter alia, the progressive approximation of its legislation to that of the Union.
In order to increase the existing trade flows concerning the import of certain agricultural products from Ukraine into the Union, and to foster bilateral trade and economic cooperation with the Union, it is appropriate to grant additional autonomous trade preferences for Ukraine.
The new autonomous measures would respect the same basic principles as those enshrined in the Association Agreement between the EU and Ukraine. In particular, Article 2 of the Association Agreement with Ukraine provides that the respect for democratic principles, human rights and fundamental freedoms and respect for the principle of the rule of law, constitute essential elements of that Agreement.
The autonomous trade measures provided for under the present Regulation are subject to the respect of these same principles by Ukraine.
Normal safeguard procedures apply.
• Consistency with existing policy provisions in the policy area
The new autonomous trade measures would be consistent with the implementation of the EU-Ukraine Association Agreement and in particular with the provisional application of Title IV of the DCFTA from 1 January 2016.
Furthermore, recent FTAs negotiated by the European Union (notably with Peru and Colombia, with Central America, with Vietnam and with Canada) have already provided unlimited duty-free access for some of the agricultural products covered by the present Regulation.
• Consistency with other Union policies
The European Union has so far supported Ukraine's political and economic stabilisation and the consolidation of the reforms in particular in the areas of justice and fight against corruption, building capacity of public administration, as well as decentralisation. An extensive support package of €12.8 billion includes Macro-Financial Assistance as well as numerous technical and financial assistance projects through annual Special Measures, and the assistance provided by the EIB among other International Financial Institutions to the implementation of the DCFTA.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The legal basis for the proposal is Article 207(2) of the Treaty on the Functioning of the European Union.
• Subsidiarity (for non-exclusive competence)
The common commercial policy, in accordance with Article 3 of the TFEU, is defined as an exclusive Union competence. Therefore, the subsidiarity principle does not apply.
• Proportionality
This proposal is necessary in order to implement the common commercial policy.
• Choice of the instrument
This proposal is in accordance with Article 207(2) TFEU, which envisages measures implementing the common commercial policy. There exists no other legal instrument that could be used in order to achieve the objective expressed in this proposal.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
Not applicable.
• Stakeholder consultations
Stakeholder consultations were carried out in the framework of the sustainability impact assessment commissioned by DG Trade in 2007 which fed into the DCFTA negotiation process. Moreover, the measure is to be adopted in co-decision. It will therefore be put under the scrutiny of the EU Council and the European Parliament.
• Collection and use of expertise
Not applicable.
• Impact assessment
In view of the difficult economic situation in Ukraine, it is important for the Regulation to enter into force as soon as possible. Therefore no impact assessment was carried out for the measure at hand. However, the trade and trade-related provisions of the Agreement have been subject to the sustainability impact assessment mentioned above. That study confirmed that implementation of trade and trade-related provisions would have a positive economic impact for the EU as well as for Ukraine.
• Regulatory fitness and simplification
The measure does not increase the regulatory burden of companies.
• Fundamental rights
The new autonomous measures would respect the same basic principles as those enshrined in the Association Agreement between the EU and Ukraine. In particular, Article 2 of the Association Agreement with Ukraine provides that the respect for democratic principles, human rights and fundamental freedoms and respect for the principle of the rule of law, constitute essential elements of that Agreement.
3. BUDGETARY IMPLICATIONS
The European Union will see a loss of customs revenue corresponding to less than EUR 50 million annually with very limited impact on the EU’s own resources. The value of duties foregone on the importation of industrial products will count for approximately 20% of the total.
4. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
On-line reporting on the utilisation of agricultural-related tariff-rate quotas is available via dedicated websites of the European Commission.
• Explanatory documents (for directives)
Not applicable.
• Detailed explanation of the specific provisions of the proposal
In view of the difficult economic situation and the economic reform efforts undertaken by Ukraine, and in order to support the development of closer economic relations with the European Union, the measure aims at increasing the trade flows concerning the import of certain agricultural products and to grant concessions in the form of autonomous trade measures in selected industrial products in line with the acceleration of the elimination of customs duties on trade between the European Union and Ukraine.
The autonomous trade measures would be granted in the form of zero-tariff quotas for certain agricultural products in addition to the preferential tariff-rate quotas set out in the Agreement, and the partial or full removal of import duties on several industrial products.