Select Committee on European Scrutiny Twenty-Fourth Report


EURO-MEDITERRANEAN ASSOCIATION AGREEMENT WITH LEBANON


(23368)


(a) Draft Council Decision on the signature of a Euro­Mediterranean Association Agreement between the European Community and its Member States and the Republic of Lebanon on behalf of the European Community; and
  
(b) Draft Council Decision on the conclusion of a Euro­Mediterranean Association Agreement between the European Community and its Member States and the Republic of Lebanon.


Legal base:(a) Article 310 EC in conjunction with the first sentence of the first sub-paragraph of Article 300(2); unanimity
(b) Article 310 EC in conjunction with Article 300(3); unanimity
Department:Foreign and Commonwealth Office
Basis of consideration: EM of 11 April 2002
Previous Committee Report: None
To be discussed in Council: No date set
Committee's assessment:Politically important
Committee's decision:Cleared



  15.1  In 1995 the Council approved a mandate for the Commission to negotiate a Euro-Mediterranean Association Agreement with Lebanon. The Agreement was initialled by the Commission and Lebanon on 10 January 2002. It will widen the scope of the Co-operation Agreement signed in 1977, which it will replace.

  15.2  The Commission now proposes that the Council authorises it, on behalf of the European Community, to sign the Agreement and then, after the assent of the European Parliament has been obtained, to sign a Decision concluding the Agreement. As a mixed competence agreement, it will also be signed and concluded by the Member States. Before coming into force it will need to be ratified by the Member States, and approved by Lebanon, as well as by the European Community.

  15.3  The Decision to conclude the Agreement is subject to parliamentary scrutiny but there is no requirement for scrutiny of the Council Decision authorising signature. As the Commission has produced both Decisions in one document, the Minister for Europe (Mr Peter Hain) has submitted an EM on both, so as to provide us with an indication of the terms. Normally, a Minister informs us of such Decisions by letter.

  15.4  The Agreement is one of the latest in a series of Euro-Mediterranean Association Agreements to be concluded under the EU's Mediterranean policy, launched at the Essen European Council in December 1994, and is similar in content and form to the others. It is for an unlimited period, but either Party may denounce it after giving six months' notice to the other.[19]

  15.5  The Minister says that the Agreement will be signed at the meeting of Euro-Mediterranean Foreign Ministers in Valencia on 22-23 April 2002. A similar Agreement with the People's Democratic Republic of Algeria is also expected to be signed at Valencia.[20]

Objectives of the Agreement

  15.6  The Minister comments that the main objectives of the Agreement are to provide an appropriate framework for political dialogue, to strengthen economic relations between the Community and Lebanon, to encourage regional co-operation, to consolidate economic and political stability, and to promote co-operation in other areas of reciprocal interest.

Provisions of the Agreement

  15.7  The Minister summarises the proposed Agreement as providing for:

    "—  regular political dialogue. Respect for democratic principles and human rights will be an essential element of the agreement;
  • a free trade area, to be established in stages, in accordance with WTO[21] rules, between the Community and Lebanon, over a maximum period of 12 years, including liberalisation of trade in industrial products, and further liberalisation of trade in agricultural, processed agricultural and fisheries products;

  • a safeguard clause and an anti-dumping/countervailing clause confirming the Parties' right to take action in accordance with the WTO;

  • provision for the extension of the Agreement to cover establishment of companies and trade in services, taking account of obligations arising out of the General Agreement on Trade in Services (GATS);

  • further removal of restrictions on the movement of capital between the Community and Lebanon;

  • the introduction of rules within five years of the entry into force of the agreement in relation to competition within the free trade area;

  • protection of intellectual, industrial and commercial property;

  • co-operation in a wide range of areas, including education and training, science and technology, environment, industry, investment, financial services, agriculture, transport, telecommunications and information technology, energy, tourism, customs, statistics, money laundering, and drugs;

  • a dialogue on social and cultural matters;

  • financial co-operation, aimed at modernising the Lebanese economy and promoting private investment;

  • the establishment of an Association Council, which will meet when both sides consider necessary, at Ministerial level to examine any issues arising within the framework of the Agreement. An Association Committee of senior officials will assist it; and

  • appropriate measures by either Party, including, implicitly, suspension of the Agreement if it considers that the other Party has failed to fulfil its obligations under the Agreement."


Exchange of Letters on Counter-Terrorism Co-operation

  15.8  The Minister says:

    "Following the events of 11 September, the EU requested that an exchange of letters be attached to the Agreement outlining all parties' commitment to counter-terrorism co-operation. Negotiations with the Lebanese continue. A Decision to conclude this exchange has been produced by the Commission."

  15.9  The Minister attaches a copy of the draft Decision to his Explanatory Memorandum.

The Government's view

  15.10  The Minister comments briefly:

    "The Agreement recognises the European Union's desire to deepen its partnership with Lebanon. It provides a comprehensive framework for political dialogue at all levels, and for the development of trade between the EU and Lebanon. The Agreement does not impose any new burdens on business. On the contrary, it will bring new opportunities to UK exporters.

    "The UK has requested and secured, the inclusion of a reference to the UK's opt-in to Title IV of the Treaty of Amsterdam in the Agreement.[22] Following the events of 11 September, the UK proposed that the commitment of the EU and Lebanon to counter-terrorism co-operation should also be reflected in the Agreement. Negotiations are well advanced on an exchange of letters outlining both sides' commitment to counter-terrorism co-operation. The exchange of letters will be legally and politically binding. The Government hopes that the exchange of letters will be attached to the Agreement at signature.

    "The European Community and Lebanon have agreed to conclude an Interim Agreement,[23] to apply, pending entry into force of the new Association Agreement. It is intended to cover the trade-related elements of the Association Agreement".

  15.11  On the financial implications, the Minister comments:

    "The Agreement does not cover EC aid to Lebanon. At present, Lebanon is eligible for EIB[24] loans, and EC funding under the MEDA regulation.

    "Depending on the extent of the increase in imports to the EU and the sectors concerned, there may be additional costs to the EC budget if internal production of agricultural products is diverted to subsidised exports, intervention storage or other means of disposal. Any such costs will have to be contained within the budgetary ceilings set out within the financial perspective as agreed at the Berlin Summit in March 1999".

Conclusion

  15.12  We welcome this agreement and look forward to its early ratification.

  15.13  We also welcome the Exchange of Letters concerning co-operation in the fight against terrorism. The Minister did not formally include the draft Decision on this Exchange of Letters in his Explanatory Memorandum and we now ask him submit an Explanatory Memorandum on that Decision, bringing us up to date on its status. We note that the current draft states that the agreement in the Exchange of Letters is to enter into force at the same time as the Euro-Mediterranean Agreement. Can the Minister tell us whether any consideration has been given to an Interim Agreement so that this co-operation can begin without delay?

  15.14  We clear the document.


19  Association Agreements have been signed with Tunisia, Morocco, Jordan, Israel and Egypt and an interim Association Agreement has been signed with the Palestinian Authority.  Back

20  (23369) - ; see paragraph 16 of this Report. Back

21  World Trade Organisation. Back

22  A recital to the draft Decision on conclusion covers this point which refers to Title IV EC (Visas, asylum, immigration and other policies related to Free Movement of Persons). Back

23  (23367) -; see paragraph 14 of this Report. Back

24  European Investment Bank. Back


 
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Prepared 26 April 2002