Select Committee on European Scrutiny Thirty-First Report



7. US SAFEGUARD MEASURES ON STEEL PRODUCTS: COMMUNITY RE-BALANCING MEASURES

 

(23048)

8219/02

COM(02) 202

Draft Council Regulation establishing additional customs duties on imports of certain products originating in the United States of America.

Legal base:

Article 133 EC; qualified majority voting

   

Document originated:

19 April 2002

Deposited in Parliament:

3 May 2002

Department:

Trade and Industry

Basis of consideration:

EM of 21 May 2002

Previous Committee Report:

None

To be discussed in Council:

10 June 2002

Committee's assessment:

Politically important

Committee's decision:

Cleared

 

 

Background

33038.33118 On 5 March 2002, the United States imposed, with effect from 20 March, a safeguard measure on a wide range of steel products, in the form of tariff quotas and additional duties. According to the Commission, the Community (along with Japan, Korea, China, and to a lesser extent Russia) is among those exporting interests most hit by these measures, which it says are causing considerable injury to the producers concerned. The Commission also considers that the steps taken by the US substantially disturb the balance of concessions and obligations resulting from the World Trade Organisation (WTO) Agreement, and that they will significantly limit Community exports to the US of the products concerned (which it says averaged some _2.4 billion a year over the last three years).

33038.33119 The Commission says that the US measures are "blatantly" in violation of the relevant WTO and GATT Agreements, and that it has consequently initiated the WTO dispute settlement procedures by requesting consultations. It adds that, as the Community and the US have failed to agree any adequate means of compensation, the Community has the right to adopt re-balancing measures in the form of a suspension of trade concessions against the US, up to the level of the adverse trade effect caused by the American safeguard measures.

The current document

33038.33120 The current document proposes the measures which the Community should now take, which would comprise additional import duties of 100%, 30%, 15%, 13% or 8% on imports of a selected range of manufactured products of US origin on which the Community is not substantially dependent, but which are likely to have an impact on the US equivalent to that of the US measures on the Community. Some of the Community's measures (covering principally, but not exclusively, US steel exports) would apply within 90 days, to reflect the extent to which the US measures are not based on an absolute increase in imports: the others would apply only after 20 March 2005, or after the WTO Dispute Settlement Body has ruled against the US measures, and to the extent that the latter still remained in place at that stage.

The Government's view

33038.33121 In her Explanatory Memorandum of 21 May 2002, the Minister of State for International Trade and Investment at the Department of Trade and Industry (Baroness Symons of Vernham Dean) says that the Government is "deeply disappointed" by the US action, and fully supports the Commission in invoking the WTO dispute settlement procedures and in seeking compensation for the damage done to Community trade.

33038.33122 She says that the Government's fundamental objective, shared by the rest of the Community, is to secure the early withdrawal of the US measures, and that in the short term it is seeking agreements with the US on compensation and products exclusions. She adds that, if the US makes an acceptable offer, the need for retaliatory action — at least in the short term — will be reduced, and indeed may disappear altogether. The Minister also says that the composition of the lists has been the subject of consultation with affected industry sectors and debate within the Community, and that final decision will be delayed until the last moment so as to reflect any compensation offered by the US, and to take account of any products which the US may decide to exclude from the measure.

33038.33123 The Minister says that, in order to meet the timetable set by the WTO, the Commission notified the proposed suspension of concessions on 14 May, but that the consequential legal instrument must be taken within 90 days of the imposition of original US safeguard measures, that is by 18 June. The proposal is therefore due to be considered by the Council on 10 June.

Conclusion

33038.33124 Clearly, it is regrettable that the United States should have taken measures of this kind. Equally, whilst an all-out trade war would be a matter of concern, it seems entirely reasonable for the Community in turn to take the sort of steps contained in this proposal, if only as a means of exerting some kind of countervailing pressure on the US authorities. In view of this, and of the strict timetable for such action laid down in the relevant WTO procedures, we are clearing this document, but we would be glad if the Government could keep us informed of subsequent developments.

8. BUNKER OIL POLLUTION DAMAGE

 

(a)

(23026)

14825/01

COM(01) 675

 

(b)

(23472)

7831/02

 

Draft Council Decision authorising the Member States to sign and ratify in the interest of the European Community the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001.

 

Draft Council Decision authorising the Member States, in the interest of the European Community, to sign, ratify or accede to the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (the Bunkers Convention).

 

Legal base:

Articles 61(c), 67(1) and 300 EC; consultation; unanimity

Document originated:

(a)19 November 2001

(b) 10 April 2002

Deposited in Parliament:

(a) 3 January 2002

(b) 20 May 2002

Department:

Transport, Local Government and the Regions

Basis of consideration:

(a) EM of 21 January 2002; Minister's letter of 27 March 2002

(b) EM and Minister's letter of 20 May 2002

Previous Committee Report:

(a) HC 152 -xix (2001-02), paragraph 6 (13 February 2002)

To be discussed in Council:

13-14 June Justice and Home Affairs Council

Committee's assessment:

Legally and politically important

Committee's decision:

(Both) Cleared

 

 

Background

33038.33125 The International Maritime Organisation (IMO) adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the Bunkers Convention) in 2001. The Bunkers Convention establishes a regime for compensation for persons suffering damage from oil spills when carried as fuel in ships' bunkers and introduces strict liability for damage and loss arising from actual and threatened pollution from ships' bunker oils.

33038.33126 In addition to providing for the recognition and enforcement of judgments, the Convention also contains rules allocating jurisdiction in the case of proceedings under the Convention. Article 9 of the Convention confers an exclusive jurisdiction on the courts for the place where the pollution damage occurred.

33038.33127 Council Regulation 44/2001[15] on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, also contains rules allocating jurisdiction. Article 5(3) of that Regulation provides that 'in matters relating to tort, delict or quasi-delict' the defendant may be sued in the courts for the place where the harmful event occurred or may occur. The same language in the Brussels Convention has been interpreted by the Court of Justice of the European Communities to mean that the defendant may be sued, at the option of the claimant, either in the courts for the place where the damage occurred, or in the courts of the place of the event which gives rise to and is at the origin of the damage[16].

33038.33128 As Council Regulation 44/2001 applies generally to civil proceedings, and would apply to proceedings for compensation for damage caused by pollution, there is a potential conflict between it and the Bunkers Convention, which confines jurisdiction to the courts for the place where the pollution damage occurred.

  

33038.33129 On 13 February 2002 we considered a version of a draft Council Decision (document (a)) which would address the potential conflict between the Council Regulation and the Bunkers Convention by authorising the Member States to sign and ratify the Bunkers Convention. This authorisation would be subject to the making by the Member States of a reservation to the Bunkers Convention to make clear that the provisions of the Council Regulation would continue to apply to the recognition and enforcement of judgments given by the courts of Member States. The reservation would also make clear that the rules contained in the Regulation and which relate to jurisdiction would also continue to apply in relations between the Member States where the pollution damage is caused within the territory of a Member State.[17]

33038.33130 We agreed with the Minister that the terms of the proposed reservation did not raise any major problem as far as recognition and enforcement of judgments was concerned, but shared the concerns of the Minister in relation to the proposed reservation on jurisdiction. We also expressed concern over the Minister's reference to an apparent requirement that all Member States should ratify the Bunkers Convention simultaneously, and asked the Minister to explain how this requirement had arisen.

The Minister's letter of 27 March

33038.33131 In his letter of 27 March, the Minister of State for Transport (the Rt Hon John Spellar) explains that, by virtue of the adoption of Council Regulation 44/2001 the Community has exclusive external competence as regards the provisions on jurisdiction, recognition and enforcement in Articles 9 and 10 of the Bunkers Convention and that the Convention is a "mixed" agreement, because its subject-matter falls in part within the exclusive competence of the Community and part within that of the Member States.

33038.33132 The Minister further explains that there is no provision in the existing Convention allowing the Community to accede. In these circumstances, the Minister states:

"on one legal view the interests of the Community itself can be represented only by the Member States acting collectively at the international level. This is based on the jurisprudence of the European Court of Justice concerning the external competence of the Community. In particular, in Case 22/70: AETR [1971] ECR 263 the European Court stated that :

'Where Community rules have been promulgated for the attainment of the objectives of the Treaty, Member States cannot outside the framework of the Community institutions, assume obligations which might affect those rules or alter their scope' and that

        '..any steps taken outside the framework of the Community institutions would be incompatible with the unity of the Common Market and the uniform application of Community law.'

"Further, in relation to 'mixed agreements' there is a duty of close co-operation between the Community institutions and the Member States not only in the negotiation but also in the conclusion of the agreement. This duty of co-operation results from the requirement of unity in the international representation of the Community ( see Opinion 2/91 [1993] ECR I -1061, point 36 and Opinion 1/94 [1994] ECR I- 5267, point 108).

"On this view, where (as in relation to the Bunkers Convention) a mixed agreement does not allow for the Community to be a party to the agreement and the Community therefore authorises the Member States to ratify the agreement also in its interests, the collective deposit of the instruments of ratification by the Member States is regarded as indispensable to ensure the uniform application of Community law across the EU."

33038.33133 The Minister also states that he agrees with the Committee about the practical problems which can follow from this view, and records that at the Civil Law Committee of the European Council on 20 March, the Member States urged a flexible, pragmatic solution to the issue of ratification but without imposing a requirement for simultaneous ratification.

The revised proposal

33038.33134 The revised draft Council Decision has been amended to provide that the rules in Council Regulation No 44/2001 will prevail over the rules of the Bunkers Convention only in respect of the recognition and enforcement of judgments. The original proposal which also referred to jurisdiction has now been deleted, and the Council Decision will authorise Member States to sign, ratify or accede to the Bunkers Convention subject to their making a declaration that the recognition and enforcement of judgments given on matters covered by the Bunkers Convention will be recognised and enforced in accordance with the Community rules[18].

33038.33135 The recitals to the Council Decision have also been amended to refer to Austria as a country which is not a contracting party to most IMO conventions, and which has not taken part in the negotiation of the Bunkers Convention. There is no provision expressly requiring simultaneous ratification by Member States.

The Minister's letter of 20 May

33038.33136 In his letter of 20 May, the Parliamentary Under Secretary of State at the Department for Transport, Local Government and the Regions (Mr David Jamieson) provides further information on the state of negotiation on the draft Council Decisions to authorise Member States to sign and ratify the Bunkers Convention, and the International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea 1996 (the 'HNS Convention'[19]). At the same time, the Minister deposited the latest versions of the draft Council Decisions with an Explanatory Memorandum.

33038.33137 The Minister reports that, in relation to both Conventions, there are still opposing views within COREPER on the issue of simultaneous ratification. The Minister further explains that negotiations are continuing on the possibility of simultaneous ratification, with other options including a possible requirement on Member States to ratify within a reasonable time period (which the Government would favour) or within a definitive deadline. The Minister points out that the latest versions of the Decisions do not contain any explicit requirement for a collective deposit of the instruments of ratification but that, for the reasons explained in the letter of 27 March, the Commission might seek to include an express requirement to this effect, or place such a requirement on Member States once the Decisions are adopted.

33038.33138 The Minister further explains that the draft Decisions do provide some flexibility of the kind sought by the Civil Law Committee at its meeting on 20 March in that there is no express requirement for simultaneous ratification.

33038.33139 The Minister sums up the Government's position as follows:

"From the UK view point the proposed Council Decisions are less than satisfactory because of the risk of simultaneous ratification. The UK played a key role in promoting and agreeing both the HNS and Bunkers Conventions. We are also taking steps to promote international implementation of these Conventions. Therefore, it is somewhat disappointing that we are now faced with a rather difficult and complex situation as a result of a lack of flexibility due to external community competence that exists from Council Regulation 44/2001. Furthermore, it is not an ideal situation for Member States to negotiate an agreement authorising ratification of these Conventions with the uncertainty that remains on the issue of simultaneous ratification. However, even though this uncertainty remains, we accept the Council Decisions given that there is no explicit reference to the requirement for simultaneous ratification. I should also point out to the Committee that should the Council Decisions not gain the full support of EU Member States there is a considerable risk that the proposed Council Decisions will be discarded altogether. This would leave all EU States in a position where they are not authorised to ratify the Bunkers and HNS Conventions at all. This is not a scenario that the UK would wish to see."

Conclusion

33038.33140 We thank the Minister for the careful and thorough way in which he has dealt with our questions. We welcome the narrowing of the scope of the declaration which Member States are to be required to make, because this will have the effect of preserving the rules on jurisdiction of the Bunkers Convention.

33038.33141 We note, and share, the concerns expressed by the Minister about the possible imposition of a requirement that the Bunkers Convention should be ratified by all Member States simultaneously. In our view, such a requirement would be dogmatic and impractical, and we support the Minister's wish to prevent it from arising.

33038.33142 We have no further questions to ask of the Minister, and we are content to clear the documents.

9. IMPORT AND EXPORT OF DANGEROUS CHEMICALS

 

(a)

(23160)

5891/02

COM(01)802

 

Draft Council Decision approving, on behalf of the European Community, the Rotterdam Convention on the Prior Informed Consent Procedure for certain hazardous chemicals and pesticides in international trade.

(b)

(23198)

5974/02

COM(01)803

 

Draft Council Regulation concerning the export and import of dangerous chemicals

Legal base:

Article 133 EC; consultation; qualified majority voting

   

Department:

Transport, Local Government and the Regions

Basis of consideration:

Minister's letter of 15 May 2002

Previous Committee Report:

HC 152-xx (2001-02), paragraph 8 (6 March 2002)

To be discussed in Council:

No date set

Committee's assessment:

Legally and politically important

Committee's decision:

(Both) Cleared, but relevant to the debate recommended on future chemicals policy (decision reported on 6 March 2002)

 

 

Background

33038.33143 Council Regulation (EEC) No. 2455/92[20] sets out the current Community measures governing the export and import of dangerous chemicals, and also gives statutory effect to voluntary procedures adopted internationally under the auspices of the United Nations Environment Programme (UNEP) and the Food and Agricultural Organisation (FAO). Its main purpose is to establish a common system of notification for imports from, and exports to, third countries of certain pesticides and industrial chemicals which are banned or severely restricted on account of their effects on human health and the environment. In particular, where such a substance is to be exported from the Community to a third country for the first time, the exporter must supply information which enables the relevant national authority to notify the country of destination, and subsequent exports of the substance to the same destination must be identified by a reference number assigned by the Commission in connection with the initial consignment. They must also be packaged and labelled according to the standards required within the Community. Underlying all these arrangements is the principle that the most dangerous substances can be exported only with the prior informed consent (PIC) of the importing country.

33038.33144 In 1998, a Convention was established in Rotterdam setting out new prior informed consent procedures for hazardous chemicals and pesticides in international trade. The first of these two documents would enable the Council to approve that Convention on behalf of the Community, and, in so far as the main effect of the Convention is to give statutory backing internationally to the present voluntary arrangements, its impact within the Community will be limited. The second document would make the necessary amendments to Council Regulation 2455/92, but it would also go beyond the convention in a number of respects set out in paragraph 8.4 of our Report of 6 March 2002[21].

33038.33145 In that Report, we commented that the introduction of a legally binding Convention to underpin the present voluntary arrangements which apply internationally to the import and export of dangerous pesticides and chemicals was to be welcomed, as was the Commission's proposal to amend the existing Community Regulation in this area. Consequently, notwithstanding the outstanding Regulatory Impact Assessment on the second of these, we cleared both documents, subject to the proviso that we considered them relevant to the debate on the Commission's strategy for a future chemicals policy which our predecessors had recommended on 25 April 2001.[22]

Minister's letter of 15 May 2002

33038.33146 That debate is now to be held on 12 June 2002, and the Parliamentary Under-Secretary of State at the Department of the Environment, Transport and the Regions (Mr Alan Whitehead) has recently written to us, enclosing an initial Regulatory Impact Assessment. As regards the potential benefits, it points out that these will arise, not within the UK, but in third countries receiving the chemicals covered by the proposal. On the other hand, the potential costs will fall upon the 2,200 or so chemical companies within this country thought to export, and will arise in a number of ways. The most significant of these would relate to the need to provide information in the language of the receiving country to accompany exports, the costs of which could amount to between 100,000 and 14 million in the first year. The other costs would arise from the need for information on transit movements (about 1.1 million) and additional notifications (200,000 - 400,000 in the first year). The total first-year costs could therefore be between 1.4 million and 15.5 million, and the costs over ten years between 10.9 million and 35.5 million. In addition, the Health and Safety Executive would incur additional enforcement costs of between 400,000 and 800,000 in the first year (and between 200,000 and 400,000 in subsequent years).

Conclusion

33038.33147 Since we have already reported on these documents, and have suggested that they should be considered in the context of the debate recommended on the Commission's strategy for future chemicals policy,[23] we are simply noting this further information and drawing it to the attention of the House.

10. COMMON POSITION ON NIGERIA

 

(23468)

Draft Council Common Position on Nigeria.

Legal base:

Article 15 EU; unanimity

   

Department:

Foreign and Commonwealth Office

Basis of consideration:

EM of 17 May 2002

Previous Committee Report:

None; but see (22352) — ; HC 152-i (2001-02), paragraph 53 (18 July 2001)

To be discussed in Council:

No date set but May or June expected

Committee's assessment:

Politically important

Committee's decision:

Cleared

 

 

The Common Position

33038.33148 The Common Position provides the framework for the EU's relations with Nigeria. It will replace the Common Position which we cleared on 18 July 2001[24]. The Parliamentary Under-Secretary of State at the Foreign and Commonwealth Office (Baroness Amos) says that the thrust is very similar and describes the aim as being:

"to strengthen the mutually beneficial relations between the EU and Nigeria, consolidating democracy, reducing poverty and encouraging development. The strengthened relations are to be based on shared values and achieved through dialogue and development cooperation."

33038.33149 The Common Position recognises that:

"Nigeria, by virtue of its political and economic influence, population and size, has an important international and regional role to play and has at present a crucial opportunity to consolidate democracy and socio-economic development in its country."

33038.33150 The Common Position makes it clear that the EU wishes to support Nigeria in:

consolidating democracy and respect for human rights;

reducing poverty and achieving sustainable institutional reform, social and economic development; and

enhancing its capacity to contribute to regional integration, peace, security and development.

33038.33151 Reference is made to the considerable challenges faced by the Nigerian authorities in the areas of security and human rights, electoral and constitutional reforms, governance and economic reform. Strengthened relations will be based on equality, dialogue and shared values. The method will be a constructive political dialogue, as well as efficient development co-operation. This will be "guided by Nigerian priorities, be poverty-oriented and involve close Nigeria-led donor co-ordination, broad participation, accountability and transparency".

33038.33152 Details of future EU support in two key areas are spelt out in Article 3 under the headings:

Development of a democratic culture; and

Institutional capacity-building.

33038.33153 Other key areas are:

the development of a Poverty Reduction Strategy Paper, with the participation of civil society;

economic growth. The EU will continue to encourage the Nigerian authorities to take measures to reform administrative policy, to diversify the economy, and to create a business- and investment-friendly environment by combatting corruption;

strengthening Nigeria's capacity to contribute to regional integration, conflict prevention and resolution, and crisis management in West Africa.

33038.33154 The EU also stresses the importance of building civil society networks "of non-state actors committed to the processes of democracy and development in Nigeria, both within the EU and Nigeria respectively and between the EU and Nigeria".

The Government's view

33038.33155 The Minister describes Nigeria as a key partner for the UK and the EU and says that the coming year is likely to be dominated by the elections scheduled for 2003. We understand that the Council Secretariat produced this text at short notice and that the Common Position is likely to be adopted by the Council in May or June.

Conclusion

33038.33156 The Minister does not explain why a new Common Position is needed when the existing one was only adopted on 14 May last year. It appears to be a straightforward renewal. However, we take the opportunity to make a couple of comments.

33038.33157 The Common Position specifically states that co-operation on development will involve close Nigeria-led donor co-ordination. Given the later references to bribery of public officials and the widespread problem of corruption, it is essential that this co-operation is indeed "poverty oriented" and that robust arrangements are made to ensure accountability. Whilst welcoming the emphasis on the beneficiary state being given the lead in co-ordinating co-operation, we would expect that due weight will also be given to the professional advice of EU specialists, in this case and in that of other developing countries.

33038.33158 We now clear the document but we ask the Government in future to give us fuller background on the reason for a new text and impress on the Council Secretariat that it should allow more time when producing texts to allow effective scrutiny before the intended date of adoption by the Council. It all too frequently leaves renewals and extensions late in the day.

 


15  OJ No L 12 of 16.12.2001, p.1 See also (21778); HC23-xxix (1999-2000), paragraph 25 (15 November 2000). Back

16  Bier v. Mines de Potasse d'Alsace [1976] ECR 1735. Back

17  Including its territorial sea and exclusive economic zone. Back

18  A similar arrangement was provided for in relation to the Council Decision on the HNS Convention. Back

19  See (22955) 14376/01; HC 152-xiv (2001-02), paragraph 15 (23 January 2002). The document was cleared by the Committee, since the draft Council Decision provides that the rules on jurisdiction in the IMO Convention could prevail over those of Council Regulation 44/2001. Back

20  OJ No. L.251, 29.8.92, p.13. Back

21  HC 152-xx (2001-02), paragraph 8 (6 March 2002). Back

22  (22212) 6671/01: HC 28-xii (2000-01), paragraph 1 (25 April 2001). The debate recommendation was confirmed on 18 July 2001: HC 152-i (2001-02), paragraph 1. Back

23  (22212) 6671/01: HC 28-xii (2000-01), paragraph 1 (25 April 2001). The debate recommendation was confirmed on 18 July 2001: HC 152-i (2001-02), paragraph 1. Back

24  (22352) - ; See headnote. Back

 
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