Explanatory Memorandum to COM(2024)4 - EU position in the World Trade Organization’s 13th Ministerial Conference on adding the Agreement on Investment Facilitation for Development into the Agreement establishing the World Trade Organization - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2024)4 - EU position in the World Trade Organization’s 13th Ministerial Conference on adding the Agreement on Investment Facilitation ... |
|---|---|
| source | COM(2024)4  |
| date | 11-01-2024 |
This proposal concerns the Council decision establishing the position to be taken on the Union's behalf in the 13th Ministerial Conference of the World Trade Organization (‘WTO’) in connection with the envisaged adoption of a decision on adding the Agreement on Investment Facilitation for Development (‘IFDA’) to Annex 4 to the Agreement establishing the World Trade Organization (‘the WTO Agreement’).
2.1.The Agreement Establishing the World Trade Organization
The WTO Agreement aims to achieve the objectives mentioned in the preamble to the Agreement. The agreement entered into force on 1 January 1995.
The European Union (‘EU’) is a party to the Agreement. 1 All 27 EU Member States are also parties to the Agreement. The WTO may take decisions in accordance with the procedures set out in the WTO Agreement.
2.2.The Ministerial Conference of the World Trade Organization
The Ministerial Conference is the highest decision-making body of the WTO and meets at least once every two years. As a matter of law and practice, decisions are taken by consensus.
The next meeting of the Ministerial Conference will take place in Abu Dhabi, United Arab Emirates on 26-29 February 2024. Article IV:2 of the WTO Agreement states that the functions of the Ministerial Conference shall be conducted by the General Council in the intervals between meetings of the Ministerial Conference.
2.3.The envisaged act during the Ministerial Conference and reason for and objective of the proposal
During the WTO’s 13th Ministerial Conference (‘MC13’), a decision may be adopted to add the IFDA to Annex 4 to the WTO Agreement (“the envisaged act”). If the envisaged act is not adopted at MC13, this may take place at a later meeting of the General Council.
Negotiations towards the IFDA were formally launched in September 2020. The Commission conducted the negotiations on behalf of the EU. 2 The IFDA will cover the following topics: improving the transparency and predictability of investment measures, simplifying and speeding up investment-related administrative procedures, strengthening the dialogue between governments and investors, and promoting the uptake by companies of responsible business conduct practices, as well as preventing and fighting corruption, ensuring special and differential treatment, technical assistance and capacity building for developing and least-developed countries.
Negotiations were concluded on 6 July 2023. 3 Because not all WTO Members participated in the negotiations, the intention of the negotiators is to submit a request to the Ministerial Conference to add the IFDA as a plurilateral agreement to Annex 4 to the WTO Agreement. After the request, Article X:9 of the WTO Agreement specifies that the Ministerial Conference of the WTO may decide “exclusively by consensus” to add an agreement to Annex 4 of the WTO Agreement.
For greater clarity, this Decision is only about allowing the EU to join the consensus regarding the legal incorporation of the IFDA to Annex 4 to the WTO Agreement. This proposal does not relate to the formal acceptance of the IFDA by the Union. For that purpose, the Commission will issue a proposal for a Council decision concluding the IFDA pursuant to Article 218(6) TFEU after the IFDA has been added to Annex 4 to the WTO Agreement and declared open for acceptance.
2.4. Consistency with existing policy provisions in the policy area
In its Communication on a Trade Policy Review - An Open, Sustainable and Assertive Trade Policy, 4 the Commission announced as follows: “WTO rules need to be brought into line with the economic and trade realities of the 21st century. In substance, the priority should be to modernise the rules of the WTO on e-commerce, investment facilitation, services domestic regulation and on the role of the state in the economy, including on subsidies.”
The envisaged act is fully consistent with that Communication because it is a necessary procedural step under WTO rules to incorporate an agreement on investment facilitation into the WTO rules.
2.5. Consistency with other Union policies
The envisaged act is consistent with other Union policies, and notably with the Union’s development cooperation policy.
3.Position to be taken on the Union's behalf
The objective of this proposal is to enable the EU to join a possible consensus at MC13 or at a later General Council on the adoption of the envisaged act.
While it is not yet clear if, and to what extent, WTO Members will be able to reach consensus on the envisaged act, the EU position at MC13 has to be established in advance by the Council pursuant to Article 218(9) TFEU.
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’ 5 .
4.1.2.Application to the present case
The WTO Ministerial Conference is a body set up by an agreement, namely the WTO Agreement, which according to Article IV:1 of the WTO Agreement has the authority to take decisions on all matters covered under any of the multilateral trade agreements, including decisions having legal effects.
The envisaged acts mentioned above constitute acts having legal effects, as they may affect the rights and obligations of the Union by virtue of international law.
The envisaged acts do not supplement or amend the institutional framework of the WTO 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.
The substantive legal basis of the proposed decision, therefore, is Article 207 TFEU.
4.3.Conclusion
The legal basis of the proposed decision should be Article 207 TFEU in conjunction with Article 218(9) TFEU.