Explanatory Memorandum to COM(2023)708 - EU position in the CETA Joint Committee established under the Comprehensive Economic and Trade Agreement (CETA) with Canada, as regards the adoption of a decision on the interpretation of Article 8.10, Annex 8-A, Article 8.9.1 and Article 8.39.3 of CETA in accordance with Article 26.1.5(e) of CETA - Main contents
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| dossier | COM(2023)708 - EU position in the CETA Joint Committee established under the Comprehensive Economic and Trade Agreement (CETA) with Canada, ... |
|---|---|
| source | COM(2023)708  |
| date | 17-11-2023 |
This proposal concerns the decision establishing the position to be taken on the Union's behalf in the Joint Committee established under the Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part, in connection with the envisaged adoption of a decision on the interpretation of Article 8.10, Annex 8-A, Article 8.9.1 and Article 8.39.3 of CETA in accordance with Article 26.1.5(e).
2.1.The Comprehensive Economic and Trade Agreement between Canada, of the one part, and the European Union and its Member States, of the other part
CETA aims to liberalise and facilitate trade and investment, as well as to promote a closer economic relationship between the European Union and Canada (‘the Parties’). The Agreement was signed on 30 October 2016 and has been provisionally applied since 21 September 2017.
2.2.The CETA Joint Committee
The CETA Joint Committee is established under Article 26.1 of the Agreement. The CETA Joint Committee is responsible for all questions concerning trade and investment between the Parties and the implementation and application of this Agreement. A Party may refer to the CETA Joint Committee any issue relating to the implementation and interpretation of this Agreement, or any other issue concerning trade and investment between the Parties.
In accordance with Article 26.1.5(e) of the Agreement, the CETA Joint Committee may adopt decisions on the interpretation of the provisions of this Agreement, which shall be binding on tribunals established under Section F of Chapter Eight (Resolution of investment disputes between investors and states) and Chapter Twenty-Nine (Dispute Settlement).
In accordance with Rule 10.2 of the Rules of Procedure of the CETA Joint Committee and of the Specialised Committees, 1 in the period between meetings, the CETA Joint Committee may adopt decisions or recommendations by written procedure if the Parties to the Agreement decide by mutual consent. For that purpose, the text of the proposal will be circulated in writing from the co-chairs to the members of the CETA Joint Committee pursuant to Rule 7, with a time limit within which members will make known any concerns or amendments they wish to make. Adopted proposals will be communicated pursuant to Rule 7 once the time limit has elapsed and recorded in the minutes of the next meeting.
2.3.The envisaged act of the CETA Joint Committee
The CETA Joint Committee is to adopt a decision on the interpretation of Article 8.10, Annex 8-A, Article 8.9.1 and Article 8.39.3 of CETA (‘the envisaged act’).
The purpose of the envisaged act is to provide certain further clarifications notably with regard to the standards of “fair and equitable treatment” and “indirect expropriation”, as well as Article 8.9.1 and Article 8.39.3 of CETA.
The envisaged act will become binding on the Parties pursuant to Article 26.3.2 of the Agreement.
3.Position to be taken on the Union's behalf
The envisaged act relates to the provisions on fair and equitable treatment and indirect expropriation which are already circumscribed in CETA and in Section 6 of the CETA Joint Interpretative Instrument. The envisaged act aims to further clarify how those standards should be understood, in light of the current situation and especially the climate emergency. The envisaged act also related to Article 8.9.1. and Article 8.39.3 of CETA. The envisaged act will clarify the provisions according to the Parties’ intention, without amending CETA.
The proposed position fits in with other policies, rules or initiatives of the Union.
It is therefore appropriate to establish the position to be taken on the Union's behalf in the CETA Joint Committee on the envisaged act in order to ensure the effective implementation of the Agreement.
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’ 2 .
4.1.2.Application to the present case
The CETA Joint Committee is a body set up by an agreement, namely CETA.
The act which the CETA Joint Committee is called upon to adopt constitutes an act having legal effects. The envisaged act will be binding on the Parties under international law in accordance with Article 26.3.2 of the Agreement and upon the tribunals established under Section F of Chapter Eight (Resolution of investment disputes between investors and states) and Chapter Twenty-Nine (Dispute Settlement) under Article 26.1.5(e) of the 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 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 Article 207 TFEU.
4.3.Conclusion
The legal bases of the proposed decision should be Article 207 TFEU in conjunction with Article 218(9) TFEU.
5.Publication of the envisaged act
As the act of the CETA Joint Committee will clarify certain provisions of the Agreement, it is appropriate to adopt it in all authentic languages of the Agreement 3 and publish it in the Official Journal of the European Union after its adoption.