authorising the opening of negotiations on the adaptation of protocols to the Agreement between the European Union and the Kingdom of Morocco

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

Over almost half a century, the EU and Morocco have developed a rich and multidimensional partnership, by virtue of which an "advanced status" was granted to Morocco in 2008 to reflect the strength of bilateral ties as well as the shared ambitions and commitments of the two parties to advance their common agenda. At the same time, the EU has consistently reiterated its commitment to the resolution of the conflict in Western Sahara. It fully supports the efforts being made by the United Nations Secretary-General (UNSG) and his Personal Envoy to help the parties find a just, lasting and mutually acceptable political solution which would provide for the self-determination of the people of Western Sahara in the context of arrangements consistent with the principles and purposes of the Charter of the United Nations as provided for in the United Nations Security Council resolutions, including resolution 2152 (2014) and resolution 2218 (2015).

In view of the granting of tariff preferences, the present proposal envisages amendments to Protocol 4 and Protocol 1 to the Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part (hereinafter referred to as the 'EU-Morocco Association Agreement' or the 'Association Agreement'), following the judgment of the European Court of Justice of 21 December 2016 in case C-104/16 P, which ruled that the EU-Morocco Association and Agriculture Agreements are not applicable to Western Sahara.

Before the Court ruling, the trade preferences foreseen in the Association Agreement and its protocols had been applied de facto to products originating in Western Sahara, a non-self-governing territory. However, such practice may not continue following the judgment of the Court of Justice, unless Protocol 4 on origin is amended in a manner that allows products from Western Sahara to be assimilated to those produced in Morocco. Following the Court ruling, uncertainties in the markets have affected bilateral commercial relations.

The present recommendation aims at authorising negotiations with a view to providing a legal basis to the continued granting of preferences to products originating from Western Sahara, in line with past practice. As these trade preferences on the EU market for agricultural and fisheries products are laid down in Protocol 1 to the Association Agreement, the scope of application of that Protocol ought to be clarified as well. This will avoid trade disruptions while keeping the level of market access to the EU stable, since no new preferences would be granted. The amendments of the relevant protocols of the Association Agreement may at a later stage be complemented, as the case may be, by a subsequent amendment of the Association Agreement itself. Finally, it should be borne in mind that two cases (C-266/16 and T-180/14) concerning Morocco are still pending before the European Court of Justice with regard to the EU-Morocco Fisheries Partnership Agreement, which are likely to provide further guidance on the conditions for extending an agreement to a non-self-governing territory. Moreover, it is understood that any arrangement will only be provisional for as long as the resolution of the conflict in the context of the United Nations and in accordance with relevant UN Security Council resolutions remains pending.

•Consistency with existing policy provisions in the policy area

The present recommendation is fully consistent with current trade policy, as customs authorities have de facto applied preferences to Western Sahara products certified as having Moroccan origin. No new trade preferences would be granted to Morocco, as the objective is simply to extend the geographical area covered by preferences, and not to alter their amount. The proposal is consistent with the overarching objectives of the European Neighbourhood Policy inasmuch as it contributes to improving trade and economic relations in the Southern Neighbourhood in a spirit of close cooperation. It is also consistent with the overall EU policy vis-à-vis Morocco, which aims at fostering a privileged partnership with Morocco while not prejudging the outcome of the UN-led process regarding Western Sahara. The fact that the trade preferences may have a wider scope is not unprecedented, as the EU-Morocco Association Agreement contains two Joint Declarations to the effect that products originating in the Republic of San Marino and in Andorra ‘shall be accepted by Morocco as originating in the Community within the meaning of the Agreement’.

•Consistency with other Union policies

The EU position has always been that it is possible to extend its bilateral agreements with Morocco to Western Sahara under certain conditions, as illustrated, e.g. by the Fisheries Partnership Agreement, which explicitly covers the waters off the coast of Western Sahara. Modifying the relevant protocols of the Association Agreement would also allow basing the granting of EU tariff preferences on assessments of benefits for the local populations and of the respect of human rights.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

The recommendation is based on Article 218(3) and (4) of the Treaty on the Functioning of the European Union.

•Subsidiarity (for non-exclusive competence)