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 the United States to provide preferential tariff treatment under the US Caribbean Basin Economic Recovery Act (CBERA)
Date: 2019-09-11
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: ACP countries, GATT, United States, World Trade Organisation, economic recovery, national law, originating product, tariff exemption

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   EUROPEAN COMMISSION  Brussels, 11.9.2019  COM(2019) 409 final 2019/0190 (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 the United States to provide preferential tariff treatment under the US Caribbean Basin Economic Recovery Act (CBERA)  
 
 
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  the  United  States  to 
provide preferential  tariff treatment  under the US Caribbean  Basin  Economic Recovery  Act 
(‘CBERA’).  

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  the  United  States,  the  General  Council  of  the  WTO  is  to  adopt  a 
decision  to  extend  the  existing  WTO  waiver  permitting  the  United  States  to  provide 
preferential tariff treatment under CBERA, pursuant to paragraphs 3 and 4 of Article IX of the 
WTO Agreement (the ‘envisaged act’). 

The existing waiver for CBERA expires on 31 December 2019. Therefore, the purpose of the 
envisaged act is to extend the waiver until 30 September 2025 as per the US request.  

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  United  States  requested  to  extend  the  existing  WTO  waiver  of  US  obligations  under 
paragraph 1 of Article I of the General Agreement on Tariffs and Trade 1994 (GATT 1994) 
and  paragraphs  1  and  2  of  Article  XIII  of  the  GATT  1994  to  permit  the  United  States  to 
provide  duty-free  treatment  to  eligible  products  originating  in  Central  American  and 
Caribbean  countries  and  territories  (‘beneficiary  countries’)  under  CBERA,  from  1  January 
2020 until 30 September 2025.  

The United States submitted the request pursuant to paragraphs 3 and 4 of Article IX of the 
WTO Agreement. It justifies the request with the high prevalence of poverty and instability in 

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the Caribbean Basin countries, particularly in Haiti, noting that economic prospects for these 
small  countries  are  further  complicated  by  susceptibility  to  natural  disasters.  Benefits  under 
CBERA are intended to expand economic opportunities and contribute towards a more stable 
and prosperous region.  

According  to  the  United  States,  the  duty-free  treatment  provided  under  CBERA  should  not 
prejudice the interests of other Members not benefiting from such treatment, and it is expected 
that the extension of such duty-free treatment will not cause a significant diversion of United 
States  imports  of  products  eligible  under  CBERA  originating  in  Members  who  are  not 
beneficiary countries. 

This will be the fifth extension of the waiver for preferential tariff treatment, initially granted 
on 15 February 1985 for the period of 1 January 1984 until 30 September 19951, and currently 
in force until 31 December 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. Moreover, the Union is supportive of 
actions  against  poverty  and  for  stability.  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. 

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(BISD 31S/20). 
WT/L/950. 
Judgment  of 
the  Court  of 
399/12,ECLI:EU:C:2014:2258, paragraphs 61 to 64.  

Justice  of  7  October  2014,  Germany  v  Council,  C-

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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 
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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2019/0190 (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 the United States to provide preferential tariff treatment under the US 
Caribbean Basin Economic Recovery Act (CBERA) 

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) 

(8) 

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 WTO (‘World Trade Organization’), 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. 

The United States was granted a waiver of obligations under paragraph 1 of Article I 
of the GATT 1994 on 15 February 1985, for the period from 1 January 1984 through 
30  September  1995.  On  15  November  1995,  the  Members  of  the  WTO  renewed  the 
waiver through 30 September 2005, and again on 29 May 2009 through 31 December 
2014. On 5 May 2015, WTO Members extended the waiver in respect of paragraph 1 
of Article I of the GATT 1994 and expanded the waiver to cover paragraphs 1 and 2 of 
Article XIII of the GATT through 31 December 2019, to the extent necessary for the 
United  States  to  provide  duty-free  treatment  for  imports  of  eligible  products 

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originating  in  beneficiary  countries  designated  pursuant  to  the  provisions  of  the 
CBERA. 

(9) 

Pursuant  to  paragraphs  3  and  4  of  Article  IX  of  the  WTO  Agreement,  the  United 
States  submitted  a  request  for  the  General  Council  to  take  a  decision  to  extend  the 
existing  WTO  waiver  to  permit  the  United  States  to  provide  duty-free  treatment  to 
eligible  products  originating  in  Central  American  and  Caribbean  countries  and 
territories under CBERA from 1 January 2020 until 30 September 2025. 

(10)  The  United  States  justifies  the  request  with  the  high  prevalence  of  poverty  and 
instability  in  the  Caribbean  Basin  countries,  particularly  in  Haiti.  Benefits  under 
CBERA are intended to expand economic opportunities and contribute towards a more 
stable and prosperous region. 

(11)  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 is supportive of actions against poverty and for stability. 

(12) 

It  is  appropriate  to  establish  the  position  to  be  taken  on  the  Union's  behalf  by  the 
European  Commission  in  the  General  Council  of  the  WTO  to  support  the  United 
States  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  the  United  States  to  provide  preferential  tariff  treatment  to  eligible  products 
originating  in  Central  American  and  Caribbean  countries  and  territories  under  the  US 
Caribbean Basin Economic Recovery Act from 1 January 2020 until 30 September 2025. 

This Decision is addressed to the Commission. 

Done at Brussels, 

Article 2 

For the Council 
The President 

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