Select Committee on European Communities Seventeenth Report



31.  PROPOSAL FOR A COUNCIL DECISION FOR APPROVAL ON BEHALF OF THE EUROPEAN COMMUNITY OF THE AGREEMENT CONCERNING THE ESTABLISHMENT OF GLOBAL REGULATIONS FOR WHEELED VEHICLES, EQUIPMENT AND PARTS WHICH CAN BE FITTED AND/OR USED ON WHEELED VEHICLES ("PARALLEL AGREEMENT") (5740/99)

Letter from Lord Tordoff, Chairman of the Committee, to Lord Whitty, Parliamentary Under Secretary of State, Department of the Environment, Transport and the Regions

  Thank you for your Explanatory Memorandum (EM) of 3 March 1999 on this topic which was considered by Sub-Committee B at its meeting this morning.

  On two legal issues arising from the proposal, the Committee notes that the Government:

    (a)  does not agree with the Commission that the Council decision be based solely on Articles 113 and 228 EC, and argues that Article 100a should be added to the legal base—and notes that the European Scrutiny Committee of the House of Commons has raised the question as to whether Article 100a might be the sole legal basis for the current proposal; and

    (b)  queries the need for the European Parliament's assent in this matter, and that the House of Commons' Committee has questioned the justification for this stance.

  The Committee would welcome clarification of these matters.

  On the substance of the proposal, we note that the third paragraph 3 of your EM states that the United States consider the 1958 Agreement to be "too binding in many respects". Please expand on this and, against that background, let us know whether the new arrangements would start from an equal base, and whether there would be full reciprocity thereafter.

  The Committee would also be grateful for the Government's view on the prospects of the Agreement attracting sufficient signatories in time for it to enter into force on 26 October 1999 as mentioned in the final paragraph of your EM.

  In the meantime, the scrutiny reserve is maintained.

29 April 1999

Letter from Lord Whitty, Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions, to Lord Tordoff, Chairman of the Committee

  Thank you for your letter of 29 April. I am sorry it has taken me so long to respond. Because the questions you raised had much in common with those from the House of Commons Scrutiny Committee I decided that it would be best to prepare a Supplementary Explanatory Memorandum.

  I hope you find the attached helpful (not printed).

27 May 1999

Letter from Lord Tordoff, Chairman of the Committee, to Lord Whitty, Parliamentary Under Secretary of State Department of the Environment, Transport and the Regions

  Thank you for your letter of 27 May 1999 on this topic which was considered by Sub-Committee B at its meeting this morning. While the Committee is grateful for the material in the supplementary Explanatory memorandum submitted with that letter, there remain some points of concern or uncertainty.

  2.  The Government's argument for citing Article 95 alongside Article 133 as the legal basis for the Council Decision appears to be to enable Member States to assert that, in so far as the Community has not adopted internal rules in respect of matters within the scope of the Agreement, "the Member States and the Community still share (internal and external) competence" for those matters. If the objective is to preserve the limits of the common commercial policy, what benefit, if any, is there in incorporating a reference to Article 95 rather than having the Member States be made parties to the Agreement? Indeed, if you are right in your analysis, should not the agreement in principle be a "mixed" one?

  3.  The Committee is concerned about the potential loss of competence by Member States. The effect of adding Article 95 and enabling the Community to be party, would seem to confer exclusive competence on the Community in respect of all "internal" and "external" matters covered by the Agreement. The "sharing" of internal and external competence to which you refer would thus be relevant in future only to matters not falling within either the common commercial policy or Community legislation. These would include, in future, the present Decision and Agreement—which are drawn in wide terms.

  4.  These are important issues. We would welcome your reaction to the Committee's arguments above, with particular reference to the areas where it is believed Member State competence would be retained.

  5.  On the matter of an equal starting base and subsequent reciprocity, we note the procedural points you make. The Committee's concern was also with the substance of the starting base. Please therefore confirm that there is no prospect of technical differences between EU and US standards being built into the starting point.

  6.  We should also be grateful for the answer to the final point in my letter of 29 April about the prospects of there being sufficient signatories to the Agreement in time for it to enter into force on 26 October 1999.

  7.  In the meantime, the scrutiny reserve is maintained.

1 July 1999

Letter from Lord Whitty, Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions, to Lord Tordoff, Chairman of the Committee

  Thank you for your letter of 1 July. I am sorry that the Supplementary Explanatory Memorandum left some uncertainty; I hope I can clear this up.

  On the point of competence, I can confirm that the legal basis will include Article 95. This is because the Agreement will be a mixed agreement . . . The new Annex III to the draft decision makes this clear.

  As I explained in the SEM, our view was that citing Article 133 on its own would have meant that the subjects were covered by the common commercial policy and were thus covered by exclusive external competence. We were not happy about the blanket extension of exclusive Community competence to all potential subject areas of the Agreement. To counter the Commission's proposal, Member States have successfully argued that there is a direct link between internal and external competence on these subjects, since the point of the Agreement is to oblige Contracting Parties to initiate the adoption of agreed global technical regulations into their internal rules. Exclusive internal competence has not been established for all the subjects covered by the Agreement, and Member States are still free to exercise their competence in these residual areas internally. This freedom would be constrained if they were not able also to exercise external competence. The inclusion of Article 95 in the legal base acknowledges the internal competence link, since it would be the legal base for any change in internal rules at a Community level.

  The reason that the Member States are not otherwise mentioned in the Decision is because it is a decision on conclusion by the EC. It is up to the Member States to initiate action to sign themselves and it is not necessary to have a Council decision authorising them to do it.

  In reality there are not many subjects where Member State competence within the scope of the Agreement still exists. The Community has already established exclusive competence with respect to all standards relating to passenger cars and motorcycles (directives 70/156/EEC and 92/61/EEC), and most of the standards for other types of road vehicle (74/150/EEC is the corresponding framework directive for agricultural tractors). There are currently over 60 separate directives in this field.

  On the issue of an equal starting base and subsequent reciprocity between the US and those that are already party to the 1958 Agreement, I can report that all the discussions so far have indicated that new global technical regulations will not be biased either towards US standards or European ones. It would defeat the idea of harmonisation if technical differences between European and US standards were built in at any stage. I hope that new regulations will be considered on their merits alone—the Agreement puts a great deal of emphasis on ensuring objective consideration of existing national regulations (but gives UN/ECE Regulations a special mention), of high levels of safety and environmental protection and of cost effectiveness. There will, of course, still be differences in the way global technical regulations are applied in law, with the US still mainly using a system of self certification, whilst the EC will continue to use type approval. If anything, those that use type approval will be at a slight advantage, since type approved products need have no extra testing before entering a self certification area. Those products whose initial market is in a self certification area will need an approval issued by a recognised type approval authority before legally entering a type approval controlled area.

  On the matter of timing, so far the US and Canada have signed the Agreement. Whilst others have declared their intention to sign (including Australia, South Africa and Japan), it seems unlikely that the necessary eight signings will have been obtained by 26 October. However it would dangerous to be complacent on this point. The European Community and its Member States are keen to be at the centre of this new regulation drafting activity; it is thus important for the Community and at least some Member States to sign as soon as possible, once the decisions have been finalised in Brussels.

  I attach a copy of the latest text as it has emerged from negotiation, together with the Commission's proposal to Council for a Decision to sign the Agreement and a declaration on the development of the Agreement that the Commission has negotiated with Japan and the US (not printed). This latter document has been on the shelf whilst the substance of the proposal for Approval has been discussed, but has been resurrected now that agreement has emerged. It is expected that the two proposals will be taken together, with the signing dealt with as a formality immediately before the substantive Approval. The UK has no problem with the proposal to sign, or with the declaration. I hope your Committee can consider it alongside 5740/99.

  It is now possible that the whole package may come before Council at its 20 July meeting. All Member States have signalled that they are content with the proposal now that mixed competence has been established, although we have maintained our Parliamentary Scrutiny reserve. I hope your Committee will be able to consider the matter again before that date.

Letter from Lord Tordoff, Chairman of the Committee, to Lord Whitty, Parliamentary Under Secretary of State, Department of the Environment, Transport and the Regions

  Thank you for your letter of 12 July 1999 on this topic which was considered by Sub-Committee B at its meeting this morning.

  The Committee is generally content with the points you make in reply to our questions about the prospects for the Agreement coming into force in October, the equal starting base and subsequent reciprocity—although we note with concern from your letter 12 July that you do no more than "hope that new regulations will be considered on their merits alone".

  However, there remain some points to make on the question of the competence and the appropriate legal base. Thank you for your further explanation of the Government's thinking, and in particular for the information that the agreement will be a mixed one, with the community and Member States being parties. It would have been helpful if this could have been made clear to both Scrutiny Committees at the outset. The Committee remains, however, concerned at the line of legal reasoning being followed by the Government in the present case. You say that the legal basis includes Article 95 because it is a mixed agreement. We find this confusing.

  Accepting the description of the Agreement and the nature and extent of the relevant acquis set out by you, the need for Article 95 is, in our view, because the Parallel Agreement deals with matters which are outside the Common Commercial Policy but, as a result of mesures taken under Article 95 (ex 100a), within Community competence. The agreement is not a mixed one simply because of the reference to Article 95. A reference to Article 95 would be entirely consistent with exclusive competence on the part of the Community, that competence being derived from the Common Commercial Policy and measures taken under Article 95. The agreement is "mixed" because there are matters remaining within the competence of the Member States and over which Member States wish to retain competence until such time they decide to transfer it to the community (whether by agreement of a Directive under Article 95 on the subject-matter or otherwise).

  The Committee notes that you do not define the precise area or areas of competence retained, though it seems clear from the reference to sixty existing Directives in the field that they are unlikely to be extensive. We nevertheless approve the Government's concern to protect national competence.

  Against that background and in view of the forthcoming Council, the Committee decided to clear the documents from scrutiny.

15 July 1999


 
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