A hearing in the EU Parliament indicates that there are many questions, and still few answers, on the EU's response to the EU Court ruling annulling bilateral agreements with Morocco over the inclusion of occupied Western Sahara.
Yesterday, 25 October, the European Parliament’s Committee for International Trade (INTA) held a hearing on the recent ruling of the General Court of the European Union annulling the EU-Morocco Trade and Fisheries Agreements for being applied to occupied Western Sahara. Though initially scheduled as an ‘in camera’ hearing, MEPs successfully pushed for the meeting to be open to the public and as such can be watched here.
It was the first discussion of Parliament and Commission on the subject since the landmark Court ruling of 29 September and comes amidst debates among the EU Member States on whether to appeal the decision or not.
The Court had ruled that no further trade agreements with Morocco can include Western Sahara without the explicit consent of the Saharawi people, and that this consent is obtained via the internationally recognised representative of the Saharawis, the Polisario Front.
Representatives of the EU Commission's Trade Department (DG Trade), Customs and Taxation (DG TAXUD) and the EU External Action Service provided a state-of-affairs to the present MEPs. Read a transcript of their statements further below.
Nele Eichhorn, Head of Unit at DG Trade reiterated the importance of preserving good relations with Morocco, an important trade and investment partner to the Union, while also recognising the need to have a clear and predictable legal framework for EU operators.
Dominic Schnichels, Acting Director of Customs Policy at DG TAXUD summarized the Court ruling in four points: the General Court had concluded that Polisario Front had standing before the Court; that the extension of the trade agreement with Morocco into Western Sahara had created rights but also obligations for the people of the territory - which requires their consent; the Front Polisario is considered the legitimate representative of the people of Western Sahara in all aspects, and not only related to the UN process; and finally that Polisario had not consented to the trade deal being applied to Western Sahara. Mr Schnichels stated that the Council has until 16 December to decide whether to appeal the ruling or not. He underlined repeatedly that no decision had been made as regards a possible appeal. The immediate consequences of not appealing would imply the introduction of significant tariffs for products originating in Western Sahara, which aren't even covered by the WTO's most-favoured-nation framework as Western Sahara is not a member of the WTO. Mr Schnichels stated that the Commission will later this year provide an update on the benefits of applying the EU-Morocco trade deal to Western Sahara and on the findings of the Commission's mission into the territory in September 2021 which showed that a significant part of the economic activity in the territory depends on export to the EU.
Finally, the EU External Action Service sought to distance itself from the rather dismissive comments by DG TAXUD as regards the supposed refusal of the Polisario to participate in the "consultations" related to the agreements, and stressed that it had been in contact with most of the Western Sahara civil society groups in 2018 as part of its consultations on the agreement, including the Polisario which had not formally participated in the consultation, but has regular technical consultations with the EEAS, also during the time of the consultations.
The main question on MEPs' minds was on the way forward.
As a means of conclusion, INTA Chair Bernd Lange (Germany, S&D) underscored that the Commission's response to the questions from the Members of Parliament had not been quite satisfactory. INTA Standing Rapporteur Van Brempt committed to call for a meeting of the Monitoring group on trade with the Maghreb in order to follow up on the discussion.
The ruling of 29 September 2021 was not the first of its kind, and leaves no possible doubt about its interpretation. While clarifying the Front Polisario’s legal personality as the internationally recognised representative of the people of Western Sahara, the EU Court has essentially held the same line of reasoning as in its rulings of 2016 and in 2018. It again confirmed that Western Sahara has a status that is separate and distinct from Morocco and, as such, should be regarded as a third party to any EU-Morocco agreement. Extending the territorial scope of any such agreement to the territory necessarily requires the consent of the people of Western Sahara through their representation, the Court repeated – adding that the consultations of the local population carried out by the EU institutions did not meet that requisite, as had been denounced at the time, inter alia by Western Sahara Resource Watch.
Non-official transcript by WSRW of initial statements and responses by the EU Commission and EEAS, INTA hearing of 25 October 2021
DG TRADE's Head of Unit for the Southern Neighbourhood, Ms Nele Eichhorn:
“Thank you very much chairman Lange, honourable members. Thank you for the invitation to the Committee. As we have the occasion to present to this Committee previously, when we participated in the exchanges of views on the southern neighbourhood at large, or on the state of EU-Morocco trade relations and developments in particular.
Morocco is an important trade and investment partner for the EU. It is the first trading partner in the southern neighbourhood, and the 20th overall. Trade between the EU and Morocco is worth €35 billion: the worth of goods that are exchanged. This was the figure in 2020, so it is indeed an important, sizeable relationship.
The development of the trading relationship has been underpinned by the various agreements concluded between the EU and Morocco, notably the Association Agreement of 1996 which established a Free Trade Area, as well the agreement on additional liberalisation of trade in agricultural products, processed agricultural products, fish and fisheries products which was signed back in 2010.
It is of high importance that economic operators on both sides can take decisions on the basis of a clear and predictable legal framework, and in this context we do attach great importance to the rulings of the European Court of Justice from the point of view of their impact on trade.
In relation to the above-referred Court rulings, we note that the Court has decided to maintain the effect of the decisions in force for now. My colleague from DG TAXUD, Mr Schnichels, will now take you through the implications and the rulings themselves. With your kind permission I would hand over to my colleague of DG TAXUD.”
DG TAXUD, Director for Customs Policy in DG TAXUD and the acting Director for International Customs Relations, Mr Dominic Schnichels:
“Mr Lange, honourable members, good afternoon. It is a great pleasure to be here with you today. My name is Dominic Schnichels, I am the Director for Customs Policy in DG TAXUD and the acting Director for International Customs Relations.
Let me start with a short description of the rulings. As the Chair has explained, on the 29th of September the General Court annulled two Council Decisions relating to international agreements with Morocco. The first agreement was the agreement on extending tariff preferences to products originating in the Western Sahara, and the second agreement was the agreement on sustainable fisheries. And the Court decided, like the Chair has explained, that the effects of the Council Decisions are maintained over a period of two months to allow for an appeal against the judgment, and in case of an appeal by the EU institutions, until the judgment is rendered in the appeal case. The Court case granted this grace period inter alia in order to preserve the legal certainty over the Union’s international commitments.
In this meeting I would like to focus on the agreement extending the tariff preferences to the Western Sahara, the so-called agricultural agreement. This agreement amend Protocols 1 and 2 to the Association Agreement, and extends the tariff preferences provided under the Association Agreement to products originating in Western Sahara. This agreement entered into force on the 19th of July, and as you know was the result of an extensive and long negotiation process, inter alia the European Parliament also adopted a non-legislative resolution giving its consent to the agreement. The agreement started applying on the 19th of July 2019. Since then we can confirm that the agreement has been implemented smoothly and that Member States customs have not raised any issue concerning its application. The agreement meant that the Western Sahara products can benefit from the preferential regime as explained in the annual report that the Commission issued in December 2020.
Let me now say a few words about the Court ruling. In its judgment of the 29th September, the General Court examines first the admissibility of the case and the standing of the Polisario Front to launch the court case. The General Court concluded that Polisario has standing and is directly and individually concerned by the Council Decisions, so that the case was admissible. The Court also considered that the agreement constituted an explicit extension of the agreement with Morocco to the territory of Western Sahara, and that it created not only rights for the Western Sahara people, but created also obligations for them. Therefore the agreements should have been subject to the consent of the concerned population. In this respect, the General Court referred to the ECJ ruling of the 16th of December 2016. The ruling of the General Court furthermore sets out that the Polisario Front is the legitimate representative of the Western Sahara people not only with respect to the UN peace process but also more generally for any aspect or act concerning the Western Sahara people. Since the Polisario Front did not express its consent for the agreements in question, the General Court concluded that the condition as established in the ECJ Judgment of 2016 for the extension of the agreement to Western Sahara was not fulfilled. In conclusion, the General Court annulled the Decision, as well as the fisheries Decision relating to fisheries, but maintained the application for the period during which an appeal can be lodged or until the judgment of the Court of Justice upon appeal. The deadline for the introduction of an appeal expires the 16th of December. Should an appeal not be lodged, the immediate consequence would be that imports of products from Western Sahara would cease to benefit of the preferential benefit provided by the agreement. Thus all imports from Western Sahara would be subject to significant tariffs. As Western Sahara is not a member of the WTO, import from Western Sahara would not even be entitled to benefit from the Most-Favoured-Nation treatment under the WTO rules.
Let me now turn to the Commission’s position. Since the ruling of the General Court, the Commission has been carefully assessing the decision and is considering the options to move forward. I should stress however that at this stage no decision has been taken and there is still quite some time. In this respect it is also important to note and to stress that Polisario’s court case was directed against the Council’s Decisions. This means that it is primarily up to the Council to decide whether to lodge an appeal or not.
As stated in the joint declaration of the High Representative Borell and Morocco’s Foreign Affairs Minister Bourita of 29 September, both sides agree that they will take the necessary measures to ensure a legal framework that guarantees the maintenance and stability of trade relations between the EU and the kingdom of Morocco. The Commission will continue its efforts to ensure a correct implementation of the agreement as long as it is applicable. The Commission will also present its report on the impact of the agreement before the end of the year. This report will be based on information received from several sources, including the information system set up by Morocco. It will also draw on the technical visit of the Commission services to Western Sahara at the end of September. This visit, that included numerous visits to facilities and meetings with economic and social actors, showed that a considerable part of the productive activity in the Western Sahara depends on exports to the EU, and that a preferential tariff treatment accorded to the Western Sahara exports plays an important role, even a decisive role in the development of certain agricultural and fish processing activities in Western Sahara, and thus for the employment of the region.
This concludes my introductory statements; I am obviously very happy to respond to your questions. Thank you very much.”
In response to questions from MEPs
DG TAXUD, Director for Customs Policy in DG TAXUD and the acting Director for International Customs Relations, Mr Dominic Schnichels:
“Thank you very much, the pleasure will be mine, and if it is OK with you I would pass part of the questions also to my colleague Fernando. If I listened carefully and I am sure I might have missed something but I would group the questions essentially under three or four main headers.
I think the first question that came from Ms Van Brempt was what are the scenarios, what is going to happen. I think at this stage there are 2 scenarios. Scenario number 1 is that we will have an appeal and then the agreement will continue to apply until the Court of Justice has rendered its judgment. If there is an appeal, the EU institutions that lodge the appeal will do so with the aim to get the agreement confirmed. The second scenario is that there is no appeal and then the agreement will expire with the consequences that I’ve outlined.
And that brings me to the second point, that was raised for the first time, I think, by Mr Kovatchev, I think it was also mentioned by many others – on the one hand questioning, Ms Bricmont – but there were also some who stressed that there are significant benefits for the people in the West Sahara, and also – particularly Mr Alvárez – stressed there are significant benefits for EU companies like the fishermen in Spain that benefit from the fisheries agreement. So, I think this is really what we see: the agreement that has been reached has brought advantages to all sides, and that is I think also confirmed by our reports and by our visits in Western Sahara – that it brings benefits for the people of Western Sahara and of course also EU businesses.
The third point, again originally raised by Ms Van Brempt, is full traceability: the origin of the products, how can we make sure that only the right products benefit. That is a question that I would like my colleague Fernando to explain.
And then I think the last point, the fourth point, is how do reach consensus or consent by the people in West Sahara. This has been raised by many, again by Ms Van Brempt, by Mr Maurel, MS Bricmont, Mr Schüster, Ms Beghin and Mr Campomenosi. Let me in this respect really clarify that a lot of consultations took place, and I think you know that at the time when the agreement was negotiated and concluded, indeed in order to ensure that the appropriate involvement of the people concerned – that they are involved. All main Western Sahara civil society and other organisations, and also the representative bodies were invited to these consultations, and that also included the Polisario Front. But unfortunately, the Polisario Front refused to engage with the process and did not engage with the EU. That is at least – and I think you know that – many of you also mentioned that it is really a complicated political matter, and I think that that is just true. But at the end, of course, only when we talk will we be able to find a solution but we really did make the effort, we really did try to make the effort and reach out but it was unfortunately not responded positively. Fernando, if you could say on the fourth block, everything related to traceability and how do we ensure origin of the products. Thank you.”
Mr Fernando Perreau de Pinninck of DG TAXUD:
“Thank you, Mr Chairman, I will address the questions of traceability as well as the question regarding how to respect the conditions of the agreement.
With respect to traceability, the products originating from Western Sahara are accompanied by a certificate of origin issued by the Moroccan customs authorities. This is the procedure that was provided for under the agreement and is respected. The certificates do not specify wherefrom the products come actually, but should there be any question regarding the true origin of the products – whether or not they are entitled to the preferences – in those cases Member States customs authorities can make a request for the verification of origin to the Moroccan customs authorities to check where the product is originating, whether the product has been imported in accordance with the conditions established in the agreement, and whether or not the product is entitled to preferences. We are in regular contact with the Member States customs authorities, and we are compiling the information as to how many requests they have made, and apparently, the initial information we have is that there are not many, not a great amount of requests for verification - meaning that the Member States customs authorities do not appear to have serious concerns on imports from Western Sahara.
Here, there is an element that maybe I mention in passing, with regard to the so-called labelling, or marking of origin, which is a different issue which is not addressed by the agreement because this relates to the marketing of products, once the product is within the EU. So I leave this question now outside.
With respect to the conditions for import, actually, products from Western Sahara use the same quota as provided to Morocco. In other words, the fact that the agreement extends the preferences to Western Sahara doesn’t imply that there is going to be an increase in exports from Morocco, especially for tomatoes which as you know is subject to quantitative limits. So in that respect we can say that the impact that this will have for European tomato producers is actually very limited because in any case the quota will not be exceeded, and this is very strictly controlled by the customs under a system which makes sure that these quantities will always be respected.
DG TRADE's Head of Unit for the Southern Neighbourhood, Ms Nele Eichhorn:
“Perhaps just to address the question of how to preserve the trading relationship: as I said there is no doubt that it is an important trading relationship between the EU and Morocco. The joint statement of the High Representative, Vice President and the Foreign Minister of Morocco at the end of September also said that measures would be taken to ensure the legal framework, which guarantees the continuity and stability of trade relations. In the meantime we continue implementing the Association Agreement, obviously, and the trade therein. And as I said as well, and Dominic – my colleague from DG TAXUD – for now the effects of these agreements remain in force, so we will do our best to work internally, work also with Morocco, identify common interests, and I expect that we would probably be invited back the Committee in order to then explain how things go about in the meantime. But for now, I think we just have to take note that the effect on trade has not been altered, as we speak today. Thank you.
Mr Colin Steinbach, Deputy Head of the Maghreb Division at the European External Action Service:
“Thank you very much, and thank you Mr Chairman, for giving me floor as well, and to all honourable Members for their questions and interventions. I think most questions have already been addressed by my colleagues from the European Commission. There was one which I wanted to perhaps compliment on a little bit, which was about contacts with the Polisario Front. While my colleague has already mentioned that there were indeed contacts with many known, or all known, Western Sahara civil society and other organisations, and any other bodies that are interested in the economic, social and political issues concerning Western Sahara, this happened in the run-up to the agreements, in the preparation in order to consult everybody who is of relevance. As mentioned by my colleague, the Polisario Front did not engage formally in this consultation process, although they were invited. But I just wanted to add that we do regularly have meetings at technical level with the Polisario Front and that these meetings also took place, informally and at technical level, during these consultations. And the EEAS remains open, obviously, to further discussions and continues these meetings also now and going forward. Thank you.”
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