Explanatory Memorandum to COM(2021)237 - EU position in the World Trade Organization on the EU request for an extension of the WTO waiver permitting autonomous trade preferences to the Western Balkans - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2021)237 - EU position in the World Trade Organization on the EU request for an extension of the WTO waiver permitting autonomous trade ... |
|---|---|
| source | COM(2021)237  |
| date | 12-05-2021 |
1. Subject matter of the proposal
The objective of this proposal is to establish the position to be taken on the Union's behalf in the General Council of the World Trade Organization (‘WTO’) in connection with the envisaged adoption of a decision to extend the WTO waiver permitting the European Union (‘EU’) to provide autonomous trade preferences to the Western Balkans.
2. Context of the proposal
2.1.The Marrakesh Agreement establishing the World Trade Organization
The Marrakesh Agreement establishing the World Trade Organization (‘WTO Agreement’) entered into force on 1 January 1995.
The European Union is a party to the Agreement.
2.2.Ministerial Conference and General Council of the World Trade Organization
Pursuant Article IV(1) of the WTO Agreement, the Ministerial Conference has the authority to take decisions on all matters under any of the Multilateral Trade Agreements.
Pursuant Article IV(2) of the WTO Agreement, in the intervals between meetings of the Ministerial Conference, its functions are conducted by the General Council.
Pursuant of Article IX(1) of the WTO Agreement, the WTO usually takes decisions by consensus.
2.3.The envisaged act of the General Council of the WTO
Pursuant Article IX(3) of the WTO Agreement, an obligation imposed on a member may be waived in exceptional circumstances.
Further to a request by the EU, the General Council of the WTO may adopt a decision to extend the existing WTO waiver permitting the EU to provide autonomous trade preferences to Western Balkans (‘the envisaged act’).
The existing waiver expires on 31 December 2021. Therefore, the purpose of the envisaged act is to extend the waiver until 31 December 2026.
The envisaged act will become binding on the Members of the WTO in accordance with Article IX(3), as well as Article II(2) of the WTO Agreement, which provides: ‘The agreements and associated legal instruments included in Annexes 1, 2 and 3 <…> are integral parts of this Agreement, binding on all Members’.
3. Position to be taken on the Union's behalf
On 16 December 2020, the European Parliament and the Council adopted Regulation (EU) 2020/2172 extending the period of application of autonomous trade preferences until 31 December 2025 1 to products originating in the Western Balkans (Albania, Bosnia and Herzegovina, Kosovo 2* Montenegro, North Macedonia, and Serbia). The trade preferences were initially granted by Council Regulation (EC) No 2007/2000 3 , amended and extended several times thereafter.
In the absence of a waiver from the EU obligations pursuant to Article I(1) of the General Agreement on Tariffs and Trade 1994 (‘GATT 1994’) and Article XIII of GATT 1994, to the extent necessary, the treatment provided by the autonomous trade preferences would need to be extended to all other Members of the WTO.
Therefore, the EU is required to submit a request to extend the WTO waiver on autonomous trade preferences granted by the EU to the Western Balkans pursuant Article IX(3) of the WTO Agreement for an additional time-period of five years, until 31 December 2026. In addition to making this request, the EU should support the adoption of this request at the General Council of the WTO.
This would be the fourth extension of the waiver, initially granted on 8 December 2000 until 31 December 2006 4 , and last extended on 7 December 2016 5 . The reason for the initial waiver and the extensions thereof is the persistent difficult economic situation in the region and that the preferential treatment to eligible products the Union affords to these countries is intended to promote economic development in a manner consistent with the objectives of GATT 1994.
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.
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 would be called upon to adopt constitutes an act having legal effects. The envisaged act would be binding under international law in accordance Article II(2) and Article IX(3) 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 the first subparagraph of Article 207 i.
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.