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 European Union request for an extension of the WTO waiver permitting autonomous trade preferences to the Western Balkans
Date: 2021-05-12
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: GATT, Western Balkans, World Trade Organisation, tariff exemption, tariff preference

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   EUROPEAN COMMISSION  Brussels, 12.5.2021  COM(2021) 237 final 2021/0121 (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 European Union request for an extension of the WTO waiver permitting autonomous trade preferences to the Western Balkans  
 
EXPLANATORY MEMORANDUM 

1. 

SUBJECT MATTER OF THE PROPOSAL 

The objective of this proposal is to establish 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 the WTO waiver permitting the European Union 
(‘EU’) to provide autonomous trade preferences to the Western Balkans.  

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

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

Pursuant  of  Article  IX(1)  of  the  WTO  Agreement,  the  WTO  usually  takes  decisions  by 
consensus. 

2.3. 

The envisaged act of the General Council of the WTO 

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

Further  to  a  request  by  the  EU,  the  General  Council  of  the  WTO  may  adopt  a  decision  to 
extend the existing WTO waiver permitting the EU to provide autonomous trade preferences 
to Western Balkans (‘the envisaged act’). 

The existing waiver expires on 31 December 2021. Therefore, the purpose of the envisaged 
act is to extend the waiver until 31 December 2026. 

The  envisaged  act  will  become  binding  on  the  Members  of  the  WTO  in  accordance  with 
Article  IX(3),  as  well  as  Article  II(2)  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 

On  16  December  2020,  the  European  Parliament  and  the  Council  adopted  Regulation  (EU) 
2020/2172  extending  the  period  of  application  of  autonomous  trade  preferences  until  31 
December  20251  to  products  originating  in  the  Western  Balkans  (Albania,  Bosnia  and 

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Regulation  (EU)  2020/2172  of  the  European  Parliament  and  of  the  Council  of  16  December  2020 
amending Council Regulation (EC) No 1215/2009 introducing exceptional trade measures for countries 
and territories participating in or linked to the European Union’s Stabilisation and Association process 
(OJ L 432, 21.12.2020, p. 7).  

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Herzegovina,  Kosovo  Montenegro,  North  Macedonia,  and  Serbia).  The  trade  preferences 
were  initially  granted  by  Council  Regulation  (EC)  No  2007/20002,  amended  and  extended 
several times thereafter.  

In  the  absence  of  a  waiver  from  the  EU  obligations  pursuant  to  Article  I(1)  of  the  General 
Agreement on Tariffs and Trade 1994 (‘GATT 1994’) and Article XIII of GATT 1994, to the 
extent necessary, the treatment provided by the autonomous trade preferences would need to 
be extended to all other Members of the WTO. 

Therefore, the EU is required to submit a request to extend the WTO waiver on autonomous 
trade  preferences  granted  by  the  EU  to  the  Western  Balkans  pursuant  Article  IX(3)  of  the 
WTO  Agreement  for  an  additional  time-period  of  five  years,  until  31  December  2026.  In 
addition  to  making  this  request,  the  EU  should  support  the  adoption  of  this  request  at  the 
General Council of the WTO.  

This would be the fourth extension of the waiver, initially granted on 8 December 2000 until 
31 December 20063, and last extended on 7 December 20164. The reason for the initial waiver 
and the extensions thereof is the persistent difficult economic situation in the region and that 
the preferential treatment to eligible products the Union affords to these countries is intended 
to promote economic development in a manner consistent with the objectives of GATT 1994.  

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.  

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 would be called upon to  adopt constitutes an act having 
legal  effects.  The  envisaged  act  would  be  binding  under  international  law  in  accordance 
Article II(2) and Article IX(3) 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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This designation is without prejudice to positions on status,  and is in line with UNSCR 1244/1999 and the 
ICJ Opinion on the Kosovo declaration of independence. 
OJ  L  240,  23.9.2000,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  530/2007  (OJ  L  125, 
15.5.2007, p. 1), as codified by  Council Regulation (EC) No 1215/2009 of 30 November 2009 (OJ L 
328, 15.12.2009, p. 1). 
WT/L/380. 
G/C/W/731. 

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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. 

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2021/0121 (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 European Union request for an extension of the 
WTO waiver permitting autonomous trade preferences to the Western Balkans 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

The Agreement establishing the World Trade Organization (‘WTO Agreement’) was 
concluded by the Union by Council Decision 94/800/EC1 and entered into force on 1 
January 1995.  

Pursuant to Article II (2)of the WTO Agreement, the agreements and associated legal 
instruments  included  in  Annexes  1,  2  and  3  (‘Multilateral  Trade  Agreements’), 
including  the  General  Agreement  on  Tariffs  and  Trade  1994  (‘GATT  1994’),  are 
integral parts of this Agreement, binding on all Members. 

Pursuant  to  Article  IV(1)  of  the  WTO  Agreement,  the  Ministerial  Conference  may 
adopt  decisions  on  all  matters  under  any  of  the  Multilateral  Trade  Agreements.  The 
Ministerial Conference is composed of representatives of all the Members and it meets 
at  least  once  every  two  years.  Pursuant  to  Article  IV(2)  of  the  WTO  Agreement, 
during  the  intervals  between  meetings  of  the  Ministerial  Conference,  the  General 
Council  is  to  conduct  its  functions.  Pursuant  to  Article  IX(1)  of  that  Agreement,  the 
WTO usually adopts decisions by consensus. 

in  exceptional 
In  accordance  with  Article  IX(3)  of 
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.  

the  WTO  Agreement, 

The  Union  was  first  granted  a  waiver  of  its  obligations  under  Article  I(1)  of  GATT 
1994 on 8 December 2000 until 31 December 20062, and last extended on 7 December 
2016  until  31  December  2021,  to  the  extent  necessary  to  permit  the  Union  to  afford 
preferential treatment to eligible products originating in the Western Balkans.  

(6) 

On 16 December 2020, the European Parliament and the Council adopted Regulation 
(EU)  2020/2172  and  again  extended  the  period  of  application  of  autonomous  trade 

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Council  Decision  94/800/EC  of  22  December  1994  concerning  the  conclusion  on  behalf  of  the 
European  Community,  as  regards  matters  within  its  competence,  of  the  agreements  reached  in  the 
Uruguay Round multilateral negotiations (1986-1994) (OJ L 336, 23.12.1994, p. 1). 
WT/L/380. 

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(7) 

(8) 

(9) 

preferences  until  31  December  20253  to  the  Western  Balkans  (Albania,  Bosnia  and 
Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia).  

In  the  absence  of  a  waiver  of  WTO  obligations,  the  Union’s  application  of 
autonomous trade preferences to the Western Balkans until 31 December 2025 would 
need to be extended to all other Members of the WTO. 

The request to extend the WTO waiver permitting autonomous trade preferences to the 
Western Balkans is justified considering the persistent difficult economic situation in 
the region and that the preferential treatment to eligible products the Union affords to 
these countries is intended to promote economic development in a manner consistent 
with  the  objectives  of  GATT  1994  and  not  to  create  barriers  for  the  trade  of  other 
WTO Members. Therefore,  the exceptional  circumstances justifying the extension of 
the waiver from Article I(1) and from Article XIII of GATT 1994 still applies.  

It  is  appropriate  to  establish  the  position  to  be  taken  on  the  Union's  behalf  in  the 
General  Council  of  the  WTO,  as  the  extension  of  the  WTO  waiver  on  autonomous 
trade  preferences  granted  by  the  Union  to  the  Western  Balkans  will  be  binding  on 
Members of the WTO, 

HAS ADOPTED THIS DECISION: 

Article 1 

The  position  to  be  taken  on  behalf  of  the  Union  within  the  General  Council  of  the  World 
Trade Organization (WTO) shall be to  request  an extension of the existing WTO waiver on 
the  autonomous  trade  preferences  granted  by  the  Union  to  the  Western  Balkans  until  31 
December 2026, and to support the adoption of that request.  

This Decision is addressed to the Commission. 

Done at Brussels, 

Article 2 

For the Council 
The President 

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Regulation  (EU)  2020/2172  of  the  European  Parliament  and  of  the  Council  of  16  December  2020 
amending Council Regulation (EC) No 1215/2009 introducing exceptional trade measures for countries 
and territories participating in or linked to the European Union’s Stabilisation and Association process 
(OJ L 432, 21.12.2020, p. 7). 
This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the 
ICJ Opinion on the Kosovo declaration of independence. 

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