Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the General Council of the World Trade Organization on the adoption of a decision to extend a WTO waiver permitting developing country Members to provide preferential tariff treatment to products of least developed countries
Date: 2019-09-11
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: GATT, World Trade Organisation, developing countries, originating product, tariff exemption

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   EUROPEAN COMMISSION  Brussels, 11.9.2019  COM(2019) 410 final 2019/0191 (NLE)  Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the General Council of the World Trade Organization on the adoption of a decision to extend a WTO waiver permitting developing country Members to provide preferential tariff treatment to products of least developed countries  
 
 
EXPLANATORY MEMORANDUM 

1. 

SUBJECT MATTER OF THE PROPOSAL 

This proposal concerns the decision establishing the position to be taken on the Union's behalf 
in  the  General  Council  of  the  World  Trade  Organization  (‘WTO’)  in  connection  with  the 
envisaged  adoption  of  a  decision  to  extend  a  WTO  waiver  permitting  developing  country 
Members to provide preferential tariff treatment for least developing countries. 

2. 

CONTEXT OF THE PROPOSAL 

2.1. 

The Marrakesh Agreement establishing the World Trade Organization  

The  Marrakesh  Agreement  establishing  the  World  Trade  Organization  (‘WTO  Agreement’) 
entered into force on 1 January 1995. 

The European Union is a party to the Agreement.  

2.2.  Ministerial Conference and General Council of the World Trade Organization 

Pursuant to paragraph 1 of Article IV of the WTO Agreement, the Ministerial Conference has 
the authority to take decisions on all matters under any of the Multilateral Trade Agreements. 

Pursuant  to  paragraph  2  of  Article  IV  of  the  WTO  Agreement,  in  the  intervals  between 
meetings of the Ministerial Conference, its functions are conducted by the General Council. 

Pursuant to paragraph 1 of Article IX, the WTO usually takes the decisions by consensus. 

2.3. 

The envisaged act of the General Council of the WTO 

Pursuant  to  paragraph  3  of  Article  IX  of  the  WTO  Agreement,  an  obligation  imposed  on  a 
member may be waived in exceptional circumstances. 

Further  to  a  request  by  Chile,  China,  India,  Thailand  and  Turkey  (the  ‘co-sponsors’),  the 
General  Council  of  the  WTO  is  to  adopt  a  decision  to  extend  the  existing  WTO  waiver 
permitting  developing  country  Members  to  provide  preferential  tariff  treatment  for  least 
developing  countries  (LDCs),  pursuant  to  paragraphs  3  and  4  of  Article  IX  of  the  WTO 
Agreement (the ‘envisaged act’). 

The  existing  waiver  for  least  developing  countries  expired  on  30  June  2019.  Therefore,  the 
purpose of the envisaged act is to extend the waiver from 1 July 2019 until 30 June 2029.  

The  envisaged  act  will  become  binding  on  the  Members  of  the  WTO  in  accordance  with 
paragraph 3 of Article IX, as well as paragraph 2 of Article II of the WTO Agreement, which 
provides: ‘The  agreements  and associated legal  instruments included in  Annexes 1, 2 and 3 
<…> are integral parts of this Agreement, binding on all Members’.  

3. 

POSITION TO BE TAKEN ON THE UNION'S BEHALF 

The co-sponsors requested to extend the existing WTO waiver of obligations under paragraph 
1  of  Article  I  of  the  GATT  1994  allowing  developing  country  Members  to  provide 
preferential tariff treatment to products of LDCs, designated as such by the United Nations, 
without being required to extend the same tariff rates to like products of any other Member 
from 1 July 2019 until 30 June 2029.  

The  co-sponsors  submitted  the  request  pursuant  to  paragraphs  3  and  4  of  Article  IX  of  the 
WTO Agreement. They justify the request with the particular vulnerability of LDCs and the 
special  structural  difficulties  these  countries  face  in  the  global  economy,  as  well  as  the 

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importance  of  improving  their  effective  participation  in  the  multilateral  trading  system  by 
granting them meaningful market access to support the diversification of their production and 
export base.  

This  will  be  the  second  extension  of  the  waiver  for  preferential  tariff  treatment  for  LDCs, 
initially granted on 15 June 1999 until 30 June 20091, and extended on 27 May 2009 until 30 
June 20192.  

The extension of the waiver would not affect negatively either the economy of the Union or 
the  trade  relations  with  the  beneficiaries  of  this  waiver.  The  Union  provides  full  duty  and 
quota free access to LDCs through its Everything But Arms initiative and is supportive of the 
efforts of other WTO Members, including developing countries, to provide preferential tariff 
treatment  to  LDCs,  too.  The  Union  further  considers  that  a  legal  instrument  is  necessary  to 
enable developing countries to provide such preferences, given that the WTO Enabling Clause 
only enables developed Members to do so. Therefore, the position to be taken by the Union 
within the General Council should be to support the waiver extension. 

4. 

LEGAL BASIS 

4.1. 

Procedural legal basis 

4.1.1.  Principles 

Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides for 
decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by 
an  agreement,  when  that  body  is  called  upon  to  adopt  acts  having  legal  effects,  with  the 
exception of acts supplementing or amending the institutional framework of the agreement.’ 

The concept of ‘acts having legal effects’ includes acts that have legal effects by virtue of the 
rules of international law governing the body in question. It also includes instruments that do 
not  have  a  binding  effect  under  international  law,  but  that  are  ‘capable  of  decisively 
influencing the content of the legislation adopted by the EU legislature’3. 

4.1.2.  Application to the present case 

The  General  Council  of  the  WTO  is  a  body  set  up  by  an  agreement,  namely  the  WTO 
Agreement. 

The  act  which  the  General  Council  is  called  upon  to  adopt  constitutes  an  act  having  legal 
effects.  The  envisaged  act  will  be  binding  under  international  law  in  accordance  with 
paragraph 2 of Article II and paragraph 3 of Article IX of the WTO Agreement.  

The  envisaged  act  does  not  supplement  or  amend  the  institutional  framework  of  the 
Agreement. 

Therefore, the procedural legal basis for the proposed decision is Article 218(9) TFEU. 

4.2. 

Substantive legal basis 

4.2.1.  Principles 

The  substantive  legal  basis  for  a  decision  under  Article  218(9)  TFEU  depends  primarily  on 
the objective and content of the envisaged act in respect of which a position is taken on the 
Union's behalf.  If the  envisaged act  pursues two  aims or has two components and if one of 

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WT/L/304. 
WT/L/759. 
Judgment  of 
ECLI:EU:C:2014:2258, paragraphs 61 to 64.  

the  Court  of  Justice  of  7  October  2014,  Germany  v  Council,  C-399/12, 

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those  aims  or  components  is  identifiable  as  the  main  one,  whereas  the  other  is  merely 
incidental, the decision under Article 218(9) TFEU must be founded on a single substantive 
legal basis, namely that required by the main or predominant aim or component. 

4.2.2.  Application to the present case 

The main objective and content of the envisaged act relate to the common commercial policy. 

Therefore,  the  substantive  legal  basis  of  the  proposed  decision  is  the  first  subparagraph  of 
Article 207(4). 

4.3. 

Conclusion 

The legal basis of the proposed decision should be the first subparagraph of Article 207(4), in 
conjunction with Article 218(9) TFEU. 

5. 

PUBLICATION OF THE ENVISAGED ACT 

As  the  act  of  the  General  Council  of  the  WTO  will  implement  the  WTO  Agreement 
provisions with respect to waivers, it is appropriate to publish it in the Official Journal of the 
European Union after its adoption. 

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2019/0191 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken on behalf of the European Union in the General Council of 
the World Trade Organization on the adoption of a decision to extend a WTO waiver 
permitting developing country Members to provide preferential tariff treatment to 
products of least developed countries 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, and in particular the 
first subparagraph of Article 207(4), in conjunction with Article 218(9) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

The  Marrakesh  Agreement  establishing  the  World  Trade  Organization  (‘WTO 
Agreement’) entered into force on 1 January 1995. 

Pursuant  to  paragraph  2  of  Article  II  of  the  WTO  Agreement,  ‘the  agreements  and 
associated  legal  instruments  included  in  Annexes  1,  2  and  3  (‘Multilateral  Trade 
Agreements’) are integral parts of this Agreement, binding on all Members.’  

In  accordance  with  paragraph  3  of  Article  IX,  in  exceptional  circumstances,  the 
Ministerial Conference may decide to  waive an obligation imposed on a Member by 
the WTO Agreement or any of the Multilateral Trade Agreements. 

Paragraphs 3 and 4 of Article IX of the WTO Agreement set out the procedures for the 
granting of waivers concerning the Multilateral Trade Agreements in Annex 1A or 1B 
or 1C to the WTO Agreement and their annexes. 

Pursuant  to  paragraph  1  of  Article  IV  of  the  WTO  Agreement,  the  Ministerial 
Conference shall have the authority to take decisions on all matters under any of the 
Multilateral Trade Agreements.  

Pursuant to paragraph 2 of Article IV of the WTO Agreement, in the intervals between 
meetings of the Ministerial Conference of the World Trade Organization (‘WTO’), the 
General  Council of the  WTO shall  conduct its  functions.  Pursuant to  paragraph 1 of 
Article IX, the WTO usually takes the decisions by consensus. 

On 15 June 1999, WTO Members granted a waiver of obligations under paragraph 1 
of  Article  I  of  the  GATT  1994  to  the  extent  necessary  to  allow  developing  country 
Members  to  provide  preferential  tariff  treatment  to  products  of  least  developed 
countries, designated as such by the United Nations, without being required to extend 
the same tariff rates to like products of any other Member until 30 June 2009. On 27 
May 2009, WTO Members extended the waiver from 1 July 2009 until 30 June 2019. 

(8) 

Pursuant  to  paragraphs  3  and  4  of  Article  IX  of  the  WTO  Agreement,  Chile,  China, 
India,  Thailand  and  Turkey  (the  ‘co-sponsors’)  submitted  a  request  for  the  General 
Council  to  take  a  decision  to  extend  the  existing  WTO  waiver  to  permit  developing 

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country Members to provide preferential tariff treatment to products of least developed 
countries from 1 July 2019 until 30 June 2029. 

(9) 

The  co-sponsors  justify  the  request  with  the  particular  vulnerability  of  the  least 
developed  countries  and  the  special  structural  difficulties  they  face  in  the  global 
economy,  as  well  as  the  importance  of  improving  their  effective  participation  in  the 
multilateral trading system by granting them meaningful market access to support the 
diversification of their production and export base.  

(10)  The  extension  of  the  waiver  would  not  affect  negatively  either  the  economy  of  the 
Union or the  Union's trade relations with  the beneficiaries  of this waiver. Moreover, 
the Union provides duty free and quota-free market access to least developed countries 
under the Everything But Arms scheme and is supportive of other WTO Members also 
providing trade preferences for least developed countries. 

(11) 

It is appropriate to establish the position to be taken by the European Commission on 
the  Union's  behalf  in  the  General  Council  of  the  WTO  to  support  the  co-sponsors’ 
request  to  extend  the  waiver,  in  accordance  with  Article  218(9)  TFEU,  as  the 
extension of the waiver will be binding on Members of the WTO, 

HAS ADOPTED THIS DECISION: 

Article 1 

The position to be taken by the European Commission on the Union's behalf in the General 
Council of the World Trade Organization shall be to support the extension of a WTO waiver 
permitting  developing  country  Members  to  provide  preferential  tariff  treatment  to  products 
originating in least developed countries from 1 July 2019 until 30 June 2029. 

This Decision is addressed to the Commission. 

Done at Brussels, 

Article 2 

For the Council 
The President 

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