Explanatory Memorandum to COM(2021)484 - EU position on modifications to Appendices 2, 2A and 5 to Annex II to the Trade Agreement with Colombia, Peru, and Ecuador - Main contents
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| dossier | COM(2021)484 - EU position on modifications to Appendices 2, 2A and 5 to Annex II to the Trade Agreement with Colombia, Peru, and Ecuador. |
|---|---|
| source | COM(2021)484  |
| date | 24-08-2021 |
1. Subject matter of the proposal
This proposal concerns a Council Decision establishing the position to be taken on the Union's behalf in the Colombia, Ecuador, Peru, EU Trade Committee in connection with the envisaged adoption of a decision of the Trade Committee set up by the Trade Agreement between the European Union and its Member States, of the one part, and Colombia, Peru and Ecuador of the other part (‘the Trade Agreement’) 1 .
The decision concerns an update, to reflect the Harmonised System (HS) 2 of 2012 and 2017, of the list of working or processing required to be carried out on non-originating materials in order that the product manufactured can obtain originating status (‘product specific rules’), as contained in Appendices 2, 2A and 5 to Annex II, to the Trade Agreement, concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation (“Annex II”).
2. Context of the proposal
2.1.The Colombia, Ecuador, Peru, EU Trade Agreement
The Trade Agreement aims to increase bilateral trade between the EU and Colombia, Ecuador and Peru. The Trade Agreement has been provisionally applied with Peru since 1 March 2013, with Colombia since 1 August 2013 and with Ecuador since 1 January 2017.
2.2.The Trade Committee
The Trade Committee may in the advancement of achieving the objectives of the Trade Agreement make modifications to the specific rules of origin established in Annex II to the Trade Agreement. Any decisions it adopts shall be by consensus of the representatives of the EU and the signatory Andean countries (Colombia, Ecuador and Peru).
2.3.The envisaged act of the Trade Committee
By written procedure, the Trade Committee is to adopt a decision regarding Appendices 2, 2A and 5 to Annex II to the Trade Agreement. The purpose of the envisaged act is to update the ‘product specific’ rules of origin in line with the 2012 and 2017 versions of the Harmonised Commodity Description and Coding System (HS).
The envisaged act will become binding on the parties in accordance with paragraph 2 of Article 14 of the Trade Agreement, which provides that “decisions adopted by the Trade Committee shall be binding upon the Parties, which shall take all necessary measures to implement them”.
3. Position to be taken on the Union's behalf
The envisaged act covers Appendices 2, 2A and 5 to Annex II to the Trade Agreement which regards the ‘product specific’ rules of origin. Following the 7th Colombia, Ecuador, Peru, EU Sub-Committee on Customs, Trade Facilitation and Rules of Origin meeting of 4-6 November 2019, and subsequent correspondence, it has been agreed to update the ‘product specific’ rules of origin so as to reflect the 2012 and 2017 versions of the Harmonised System (HS). Minor mistakes included in the Appendices also need to be corrected.
Appendix 2 and 2A to Annex II
The list of working or processing required to be carried out on non-originating materials in order that the product manufactured can obtain originating status is set out in Appendix 2 to Annex II. An addendum to this list is included in Appendix 2A to Annex II. These product-specific rules are based on the 2007 version of the Harmonised System (HS) which has become outdated because updates were made in 2012 and 2017. The envisaged act is aimed at reflecting those updates.
Appendix 5 to Annex II
Certain originating sea fish products from Peru which are exported to the European Union are subject to annual quotas, the details of which are set out in Appendix 5 to Annex II. As with Appendix 2 and 2A, this needs to be updated to reflect changes made to the Harmonised System (HS) in 2012 and 2017.
Updating the ‘product specific’ rules of origin in line with the updates of the Harmonised System (HS) is an EU best practice. While the Harmonised System (HS) 2022 will begin on 1 January 2022, it is still beneficial to reflect changes made to the Harmonised System (HS) in 2012 and 2017 in the ‘product specific’ rules of origin since exporters will be able to make easier correlations to the Harmonised System (HS) 2022.
The proposal relates to the implementation of a preferential trade agreement concluded as part of the common commercial policy, which is an area in which the Union has exclusive competence.
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’ 3 .
4.1.2.Application to the present case
The Trade Committee is a body set up by an agreement, namely the Trade Agreement between the European Union and its Member States, of the one part, and Colombia, Peru and Ecuador, of the other part.
The act, in this case a Decision, which the Trade Committee 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 14 of the Trade Agreement between the European Union and its Member States, of the one part, and Colombia, Peru and Ecuador, of the other part.
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 of the Union.
Therefore, the substantive legal basis of the proposed decision is the first subparagraph of Article 207 i TFEU.
4.3.Conclusion
The legal basis of the proposed decision should be the first subparagraph of Article 207 i TFEU, in conjunction with Article 218(9) TFEU.
5. Publication of the envisaged act
As the act of the Trade Committee will amend appendices to Annex II to the Trade Agreement, it is appropriate to publish it in the Official Journal of the European Union after its adoption.