Lord Bruce of Donington
asked Her Majesty's Government:
What was the outcome of the consideration by the Council of Ministers at their meeting on 1st April 1995 on the European Commission's proposal (Com (95) 42 final) concerning "a level playing field for direct investment"; what relevance, if any, the proposal has to the Single Market; and why they gave the proposal their "broad support" in their Explanatory Memorandum on 31st March 1995.
The Council of Ministers broadly endorsed the Commission Communication at their meeting on 10 April 1995. A copy of the Council's conclusions is enclosed for the noble Lord and another has been placed in the Library of the House.
The negotiation of multilateral investment rules will have no direct relevance to the Single Market, but 106WA investors within the Community will benefit from the economic liberalisation of the Single Market.
The Commission Communication is generally in line with long-standing United Kingdom objectives on international investment policy, which are to achieve liberalisation of restrictions on investment and effective protection of United Kingdom investments overseas. The Commission envisages an early start to negotiations in the World Trade Organisation, whereas the Government are anxious that any early preparatory work there should not divert resources from work already under way in the Organisation for Economic Co-operation and Development.
Following is the note referred to:
"A" ITEM NOTE
from: Permanent Representatives Committee
on: 5 April 1995
Subject: Trade questions
— Start-up of the WTO and multilateral trade negotiations, with particular reference to trade and investment.
At its meeting on 5 April 1995 the Permanent Representatives Committee agreed to suggest that the Council, as an "A" item at its meeting on 10 April 1995, approve the draft Council conclusions annexed hereto.
II. Trade and Investment
- 1. The Council takes note of the current Commission communication and gives its political agreement to the following guidelines:
- —it recognises the value to the Community and its Member States of striving actively for the establishment of multilateral rules involving high standards of liberalisation and protection for direct foreign investment;
- —it hopes that negotiations will start at the OECD forthwith, with the participation of the Community and its Member States, in order to draw up of a multilateral agreement on investment, with which non-member countries will be associated;
- —it proposes that work should also commence within the WTO for the subsequent establishment of a multilateral framework.
2. Given that this agreement will include provisions covered by joint (Community and national) competence in relation to the Treaty, the Council requests the Commission to submit a formal recommendation for a directive authorising the latter to participate in negotiations opened at the OECD in respect of matters covered by Community competence. 3. These conclusions are without prejudice to the arrangements to be adopted for such participation and for the conduct of the negotiations. The arrangements will have to guarantee close co-operation between the Community and the Member States.