Proposal for a COUNCIL DECISION on the conclusion of the relevant agreements under Article XXI GATS with Argentina, Australia, Brazil, Canada, China, the Separate customs territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei), Columbia, Cuba, Ecuador, Hong Kong China, India, Japan, Korea, New Zealand, the Philippines, Switzerland, and the United States, on the necessary compensatory adjustments resulting from the accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Austria, the Republic of Poland, the Republic of Slovenia, the Slovak Republic, the Republic of Finland and the Kingdom of Sweden to the European Union
Date: 2018-11-12
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: EU Member State, GATS, World Trade Organisation, accession to the European Union, financial compensation of an agreement, international trade, ratification of an agreement, third country, trade agreement (EU)

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   EUROPEAN COMMISSION  Brussels, 12.11.2018 COM(2018) 733 final/2 2018/0384 (NLE)  CORRIGENDUM This document corrects document COM(2018)733 of 8.11.2018 Addition of the interinstitutional reference 2018/0384 (NLE) Concerns all language versions The text shall read as follows : Proposal for a COUNCIL DECISION on the conclusion of the relevant agreements under Article XXI GATS with Argentina, Australia, Brazil, Canada, China, the Separate customs territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei), Columbia, Cuba, Ecuador, Hong Kong China, India, Japan, Korea, New Zealand, the Philippines, Switzerland, and the United States, on the necessary compensatory adjustments resulting from the accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Austria, the Republic of Poland, the Republic of Slovenia, the Slovak Republic, the Republic of Finland and the Kingdom of Sweden to the European Union  
 
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The  present  Commission  proposal  for  a  Council  decision  aims  at  formally  concluding  the 
compensatory agreements reached between the European Union and several WTO Members 
in  order  to  obtain  a  consolidated  GATS  schedule  of  specific  commitments  covering  all  the 
Member  States  who  were  members  of  the  European  Union  in  2006  (hereafter  "the 
Agreements").  

The terms and conditions under which WTO Members commit access to their market to the 
services and service suppliers of other WTO Members are specified in their GATS schedules 
of  specific  commitments.  The  original  schedule  of  specific  commitments  of  the  European 
Union  and  its  Member  States  (hereafter  "the  EU  GATS  schedule")  dates  back  to  1994,  and 
only covers those twelve Member States who were members of the European Union  at  that 
time.  The  thirteen  Member  States  that  have  joined  the  European  Union  in  1995  and  2004 
continued  to  maintain  their  individual  GATS  schedules,  which  were  adopted  prior  to  their 
accession to the European Union. 

In  order  to  ensure  that  those  thirteen  Member  States  did  not  maintain  commitments  which 
would be in breach of the acquis communautaire and that they were covered by the horizontal 
limitations  included  in  the  EU  GATS  schedule,  it  was  necessary  to  notify  the  modification 
and  withdrawal  of  certain  specific  commitments  included  in  the  EU  GATS  schedule  and  in 
the individual GATS schedules of the thirteen Member States concerned, and to consolidate 
those individual schedules with the EU GATS schedule. 

To this end, on 28 May 2004, the European Union notified to the WTO the modification and 
withdrawal  of  certain  commitments  included  in  the  EU  GATS  schedule  and  in  the  GATS 
schedules  of  the  thirteen  Member  States  concerned.  The  European  Union  subsequently 
entered into negotiations with eighteen WTO Members, who claimed to be affected by these 
modifications  and  withdrawals,  under  Article  XXI  of  GATS.  In  the  course  of  such 
negotiations,  in  accordance  with  the  Council  Conclusions  of  26  July  20061,  the  European 
Union agreed on the compensation to be offered to the affected WTO Members. The notified 
modifications  and  withdrawals,  together  with  the  agreed  compensatory  adjustments,  were 
incorporated into a consolidated EU GATS schedule, the certification of which was concluded 
pursuant to the applicable WTO rules on 15 December 2006. 

Thereby, the European Union became the first member of the World Trade Organization that 
successfully used the GATS provisions on the modification and withdrawal of commitments. 
As  a  result  of  the  successful  consolidation  of  the  EU  GATS  schedule,  its  services 
commitments could be presented in a single document covering its, at that time, twenty five 
Member States (hereafter "the EU25 consolidated schedule"). 

The agreed compensatory adjustments constituted a satisfactory and balanced outcome of the 
negotiations and should therefore be approved on behalf of the European Union.  

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12019/06 Limited WTO 135 Services 34. 

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Accordingly, on 27 March 2007, the Commission submitted a proposal for a Council Decision 
on the conclusion of the Agreements2.  

On 23 July 2007, the Council agreed on the text of a draft decision of the Council and of the 
representatives  of  the  governments  of  the  Member  States  meeting  within  the  Council 
approving the conclusion of the Agreements on behalf of the European Union and its Member 
States3. 

On 11 October 2007 the Parliament, in a consultation procedure, approved the conclusion of 
the Agreements4. 

At this stage, the Council has not yet approved the conclusion of the Agreements, which have 
not been ratified by all the Member States concerned.  

The  fact  that  the  Agreements  have  not  yet  been  formally  concluded  is  hindering  the 
consolidation process of the EU GATS schedule regarding the Member States having joined 
the European Union after 2006, since the WTO Members who claimed to be affected by the 
modifications of the schedules of those Member States refuse to engage in this process until 
the legal status of the Agreements had been clarified. 

• 

Consistency with existing policy provisions in the policy area 

The negotiation and conclusion of the Agreements is a necessary step for the entry into force 
of a common GATS schedule for the whole of the European Union. The entry into force of 
the EU25 schedule is needed, on the one hand, in order to ensure that all the Member States 
concerned are covered by the same horizontal limitations and that their commitments are not 
in  breach  of  the  acquis  communautaire  and,  on  the  other  hand,  to  advance  in  further 
consolidation processes. 

• 

Consistency with other Union policies 

The  Agreements  are  fully  consistent  with  European  Union  policies  and  do  not  require  the 
European  Union  to  amend  its  rules,  regulations  or  standards  in  any  regulated  area.  The 
Agreements  safeguard  public  services  and  have  no  impact  on  the  governments’  right  to 
regulate in the public interest. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

On 18 February 2008, the Commission seized the Court of Justice of the European Union for 
an  opinion  under  Article  300(6)  EC  on  whether  the  European  Union  had  the  necessary 
competence to sign and conclude alone the Agreements. In its Opinion 1/08 of 30 November 
20095,  the  Court  concluded  that,  under  the  rules  existing  before  the  entry  into  force  of  the 
Lisbon Treaty, the Agreements had to be concluded by the European Union and its Member 
States. 

2 
3 
4 
5 

COM(2007) 154 final, distributed in the Council as 2007/0055 (ACC); 8121/07 LIMITE. 
Doc. 8123/07. This decision has not yet been formally adopted. 
P6_TA(2007)0424. 
EU:C:2009:739. 

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In its Opinion 2/15 of 16 May 20176, the Court confirmed, under the rules existing after the 
entry  into  force  of  the  Lisbon  Treaty,  the  EU’s  exclusive  competence  with  regard  to  all 
matters  covered  by  the  agreement  that  had  been  negotiated  with  Singapore,  except  for  non-
direct  investment  and  investor-to-state  dispute  settlement  where  the  Member  States  are 
defendants that the Court considered to be of shared competence of the European Union and 
the  Member  States.  The  Court  drew  the  EU  exclusive  competence  from  the  scope  of  the 
Common Commercial Policy under Article 207(1) TFEU and from Article 3(2) TFEU (based 
on the affectation of existing common rules contained in secondary legislation). 

In accordance with Opinion 2/15, all the matters covered by the Agreements must also be held 
to fall within the competence of the European Union and, more particularly, within the scope 
of Articles 91, 100(2) and 207 TFEU.  

The  Agreements  are  to  be  concluded  by  the  European  Union  pursuant  to  a  decision  of  the 
Council based on Article 218(6) TFEU, following the European Parliament’s consent. 

• 

Subsidiarity (for non-exclusive competence)  

The Agreements,  as presented to  the Council, do not  cover any matters that  fall outside the 
scope of the European Union’s exclusive competence. 

• 

Proportionality 

The proposal  to  conclude  the Agreements does  not  exceed what  is  necessary to  achieve the 
objective of having a consolidated GATS schedule for the whole of the European Union. 

• 

Choice of the instrument 

This proposal for a Council decision is submitted in accordance with paragraph  6 of Article 
218  TFEU,  which  envisages  the  adoption  by  the  Council  of  a  decision  authorising  the 
conclusion  of  the  agreement.  There  exists  no  other  legal  instrument  that  could  be  used  in 
order to achieve the objective expressed in this proposal 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

Not applicable 

• 

Stakeholder consultations 

Not applicable 

• 

Collection and use of expertise 

Not applicable 

• 

Impact assessment 

Not applicable 

• 

Regulatory fitness and simplification 

The agreements are not subject to REFIT procedures. 

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EU:C:2017:376. 

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• 

Fundamental rights 

The proposal does not affect the protection of fundamental rights within the European Union. 

4. 

BUDGETARY IMPLICATIONS 

The Agreements are not expected to have a financial impact on the EU budget. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

Not applicable. 

• 

Explanatory documents (for directives) 

Not applicable. 

• 

Detailed explanation of the specific provisions of the proposal 

The  Agreements  permit  the  consolidation  of  fourteen  of  the  seventeen  different  GATS 
text.
schedules  applicable 

the  European  Union 

into  a  single 

territory  of 

the 

in 

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2018/0384 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the conclusion of the relevant agreements under Article XXI GATS with Argentina, 
Australia, Brazil, Canada, China, the Separate customs territory of Taiwan, Penghu, 
Kinmen and Matsu (Chinese Taipei), Columbia, Cuba, Ecuador, Hong Kong China, 
India, Japan, Korea, New Zealand, the Philippines, Switzerland, and the United States, 
on the necessary compensatory adjustments resulting from the accession of the Czech 
Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the 
Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of 
Austria, the Republic of Poland, the Republic of Slovenia, the Slovak Republic, the 
Republic of Finland and the Kingdom of Sweden to the European Union 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 91, Article 100(2), and Article 207, in conjunction with Article 218(6)(a)(v) thereof, 

Having regard to the proposal from the European Commission, 

Having regard to the consent of the European Parliament,  

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

The  Treaty  concerning  the  accession  of  the  Kingdom  of  Norway,  the  Republic  of 
Austria, the Republic of Finland and the Kingdom of Sweden to the European Union 
entered into force on 1 January 1995. 

The Treaty concerning the accession of the Czech Republic, the Republic of Estonia, 
the  Republic  of  Cyprus,  the  Republic  of  Latvia,  the  Republic  of  Lithuania,  the 
Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of 
Slovenia,  the  Slovak  Republic,  to  the  European  Union  entered  into  force  on  1  May 
2004. 

Pursuant  to  Article  XX  of  the  General  Agreement  on  Trade  in  Services  (hereinafter 
referred  to  as  GATS),  WTO  Members  shall  set  out  in  a  schedule  the  specific 
commitments they undertake under Part III of GATS. 

The  current  schedule  of  the  European  Union  and  its  Member  States  only  covers  the 
specific  commitments  related  to  the  twelve  Member  States  of  1994.  The  individual 
schedules  of  specific  commitments  of  the  Member  States  that  have  joined  the 
European Union in 1995 and in 2004 (hereinafter referred to as the acceding Member 
States) were adopted prior to their accession. 

In order to ensure that the acceding Member States are covered by limitations included 
in the list of specific commitments of the European Union and to ensure consistency 
with  the  acquis  communautaire,  it  was  necessary  to  modify  or  withdraw  certain 
specific  commitments  included  in  the  list  of  specific  commitments  of  the  European 
Union and in the lists of specific commitments of the acceding Member States. 

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(6)  With a view to present a consolidated schedule, on 28 May 2004 the European Union 
submitted  a  communication  pursuant  to  Article  V  of  GATS  whereby  it  notified  its 
intention  to  modify  or  withdraw  certain  specific  commitments  included  in  its  own 
schedule  and  in  those  of  the  acceding  Member  States,  pursuant  to  Article  V:5  of 
GATS and in accordance with the terms of Article XXI:l(b ) of GATS. 

(7) 

(8) 

(9) 

Following  the  submission  of  the  notification  and  pursuant  to  Article  XXI:2(a)  of 
GATS,  eighteen  WTO  Members  (Argentina,  Australia,  Brazil,  Canada,  China,  the 
Separate  customs  territory  of  Taiwan,  Penghu,  Kinmen  and  Matsu  (Chinese  Taipei), 
Colombia, Cuba, Ecuador, Hong Kong China, India, Japan, Korea, New Zealand, the 
Philippines, Switzerland, Uruguay and the United States (hereinafter referred to as the 
affected WTO Members) submitted claims of interest. 

The Commission conducted negotiations with the affected WTO Members. As a result 
of those negotiations, agreement was reached on compensatory adjustments related to 
the modifications and withdrawals notified on 28 May 2004. 

Following  the  conclusion  of  the  negotiations,  in  accordance  with  the  Council 
Conclusions  of  26  July  2006,  the  Commission  was  authorised  to  sign  the  respective 
agreements  with  each  of  the  affected  WTO  Members  concerned.  With  a  view  to 
launch  the  certification  procedure  provided  for  by  the  applicable  WTO  rules,  on  14 
September  2006  the  Commission  transmitted  the  draft  consolidated  schedule  to  the 
WTO Secretariat. The certification was concluded on 15 December 2006. 

(10)  The agreed compensatory adjustments constitute a satisfactory and balanced outcome 
of  the  negotiations.  They  should  therefore  be  approved  on  behalf  of  the  European 
Union, 

HAS ADOPTED THIS DECISION:  

Article 1 

1. 

The  Agreements  with  Argentina,  Australia,  Brazil,  Canada,  China,  the  Separate 
customs  territory  of  Taiwan,  Penghu,  Kinmen  and  Matsu  (Chinese  Taipei), 
Columbia, Cuba, Ecuador, Hong Kong China, India, Japan, Korea, New Zealand, the 
Philippines,  Switzerland,  and  the  United  States  on  the  necessary  compensatory 
adjustments  under Article XXI of GATS  resulting from  the accession of the Czech 
Republic, the Republic  of Estonia, the Republic of Cyprus, the Republic of  Latvia, 
the  Republic  of  Lithuania,  the  Republic  of  Hungary,  the  Republic  of  Malta,  the 
Republic  of  Austria,  the  Republic  of  Poland,  the  Republic  of  Slovenia,  the  Slovak 
Republic,  the  Republic  of  Finland  and  the  Kingdom  of  Sweden  to  the  European 
Communities, are hereby approved on behalf of the European Union. 

2. 

The Agreements referred to in paragraph 1 are attached to this decision. 

The President of the Council shall designate the person empowered to express the consent of 
the European Union to be bound by the Agreements. 

Article 2 

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Article 3 

This  Decision shall  enter into force on the day of its adoption and shall be published in the 
Official Journal of the European Union. 

Done at Brussels, 

For the Council 
The President 

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