Explanatory Memorandum to COM(2019)563 - EU position in the General Council of the World Trade Organisation - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2019)563 - EU position in the General Council of the World Trade Organisation. |
|---|---|
| source | COM(2019)563  |
| date | 30-10-2019 |
1. Subject matter of the proposal
This proposal concerns the decision establishing the position to be taken on Union's behalf in the General Council of the World Trade Organization (WTO) in connection with the envisaged adoption of a decision on the Review of the Understanding on Tariff Rate Quota Administration Provisions of Agricultural Products, as Defined in Article 2 of the Agreement on Agriculture.
2. Context of the proposal
2.1.The Marrakesh Agreement establishing the World Trade Organization
The proposed Council Decision seeks to authorise the European Commission to support on Union’s behalf a decision to be taken in the General Council of the World Trade Organization (WTO). The World Trade Organization was established by Marrakesh Agreement (‘WTO Agreement’) that entered into force on 1 January 1995.
The European Union is a party to that Agreement.
2.2.Ministerial Conference and General Council of the World Trade Organization
Pursuant to paragraph 1 of Article IV of the WTO Agreement, the Ministerial Conference has the authority to take decisions on all matters under any of the Multilateral Trade Agreements.
However, pursuant to paragraph 2 of Article IV of the WTO Agreement, in the intervals between meetings of the Ministerial Conference, its functions are conducted by the General Council.
Pursuant to paragraph 1 of Article IX, the WTO bodies strive to take their decisions by consensus.
2.3.The envisaged act of the General Council of the WTO
In December 2013, at the Ninth Session of the WTO Ministerial Conference, (Trade) Ministers adopted a decision on ‘Understanding on Tariff Rate Quota Administration Provisions of Agricultural Products, as defined in Article 2 of the Agreement on Agriculture’ (WT/MIN(13)/39) (‘TRQ Understanding’).
The objective of the TRQ Understanding is to streamline tariff rate quota administration for agricultural products. In Paragraph 13, the TRQ Understanding envisages its review, taking into account the experience with its operation to date. The review was to be commenced no later than four years following the adoption of the TRQ Understanding. In 2018, the Committee on Agriculture proceeded with the review process. Early 2019, the Secretariat of the Committee on Agriculture issued the draft report to be addressed to the General Council of the WTO giving an account of the developments to date.
Given the lack of consensus among the WTO members on the substantive changes to the TRQ Understanding, the Committee recommends to the General Council to extend the review period until end-2021 and to enhance transparency of TRQ administration (See Annex 2 of the report).
These recommendations (in Annex 2 of the report) should be presented to the General Council in December 2019. The General Council should adopt these recommendations in the form of a decision on the review of the TRQ Understanding.
3. Position to be taken on the Union's behalf
The objective of this proposal is to enable the Union to cause the adoption of a decision on the review of the TRQ Understanding in the December 2019 meeting of the WTO General Council.
From Union’s perspective, the extension of the review period until end of 2021 is crucial, because it allows for the continuation of the existing TRQ Understanding and permits WTO members to hold further discussions concerning the review of this TRQ Understanding.
4. Legal basis
4.1.Procedural legal basis
4.1.1.Principles
Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides for decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by an agreement, when that body is called upon to adopt acts having legal effects, with the exception of acts supplementing or amending the institutional framework of the agreement.’
The concept of ‘acts having legal effects’ includes acts that have legal effects by virtue of the rules of international law governing the body in question. It also includes instruments that do not have a binding effect under international law, but that are ‘capable of decisively influencing the content of the legislation adopted by the EU legislature’ 1 .
4.1.2.Application to the present case
The General Council of the WTO is a body set up by an agreement, namely the WTO Agreement.
The act which the General Council is called upon to adopt constitutes an act having legal effects. The envisaged act will be binding under international law in accordance with paragraph 2 of Article II and paragraph 3 of Article IX of the WTO Agreement.
The envisaged act does not supplement or amend the institutional framework of the Agreement.
Therefore, the procedural legal basis for the proposed decision is Article 218(9) TFEU.
4.2.Substantive legal basis
4.2.1.Principles
The substantive legal basis for a decision under Article 218(9) TFEU depends primarily on the objective and content of the envisaged act in respect of which a position is taken on the Union's behalf. If the envisaged act pursues two aims or has two components and if one of those aims or components is identifiable as the main one, whereas the other is merely incidental, the decision under Article 218(9) TFEU must be founded on a single substantive legal basis, namely that required by the main or predominant aim or component.
4.2.2.Application to the present case
The main objective and content of the envisaged act relate to the common commercial policy.
Therefore, the substantive legal basis of the proposed decision is Article 207 TFEU.
4.3.Conclusion
The legal basis of the proposed decision should be the first subparagraph of Article 207 i, in conjunction with Article 218(9) TFEU.
5. Publication of the envisaged act
As the act of the WTO General Council will supplement the WTO Agreement by extending the application of the TRQ Understanding and by providing rules on the better utilization of tariff rate quotas, it is appropriate to publish the Act in the Official Journal of the European Union after its adoption.