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“Introduction to EU Trade Policy” – July 2008 How We Make Trade Policy

“Introduction to EU Trade Policy” – July 2008 How We Make Trade Policy. Contents Part I: EU Trade Powers Part II: The evolving scope of Trade Policy Part III: Institutional set up Part IV: Conclusions. I.1. Trade Policy – The External Side of the Customs Union.

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“Introduction to EU Trade Policy” – July 2008 How We Make Trade Policy

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  1. “Introduction to EU Trade Policy” – July 2008How We Make Trade Policy • Contents • Part I: EU Trade Powers • Part II: The evolving scope of Trade Policy • Part III: Institutional set up • Part IV: Conclusions

  2. I.1. Trade Policy – The External Side of the Customs Union • 1957: Treaty of Rome. The European Economic Community as a Customs Union • A Customs Union implies the establishment of a Common Commercial Policy - Article XXIV:8(a) GATT: • “A customs union shall be understood to mean the substitution of a single customs territory for two or more customs territories, so that • … • (ii)        subject to the provisions of paragraph 9, substantially the same duties and other regulations of commerce are applied by each of the members of the union to the trade of territories not included in the union”

  3. I.2. A Transfer of Sovereignty • Under the principle of conferral, the Union shall act within the limits of the competences conferred upon it by the Member States to attain the objectives set out in the Treaties. • “Full responsibility in the matter of commercial policy was transferred to the Community by means of Article 113(1)” - Case 41/76, Donckerwolcke, ECR (1976) p.1921

  4. I.3. An exclusive EC competence • “It cannot therefore be accepted that in a field… which is covered by export policy and more generally by the Common Commercial Policy, the Member States should exercise a power concurrent to that of the Community, in the Community sphere and in the international sphere. The provisions of Articles 113 and 114 concerning the conditions under which, according to the Treaty, agreements on commercial policy must be concluded show clearly that the exercise of concurrent powers by the Member States and the Community in this matter is impossible” - Opinion 1/75, ECR (1975) p.1355 • “Measures of commercial policy of a national character are only permissible after the end of the transitional period [31/12/1969] by virtue of specific authorisation by the Community” - Case 41/76, Donckerwolcke, ECR (1976) p.1921 • “The Union shall have exclusive competence in the following areas: … (e) common commercial policy” – Article I-13 of the draft Constitutional Treaty • ERTA jurisprudence: the Community has competence over areas that it has previously regulated at the internal level

  5. Articles 131 lays down the specific aims of the common commercial policy – “to contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and the lowering of customs barriers” Other relevant rules include: Art. 151 (“The Community shall take cultural aspects into account in its action under other provisions of this Treaty, in particular in order to respect and to promote the diversity of its cultures”), Art. 152 (“A high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities”), Art.153 (“Consumer protection requirements shall be taken into account in defining and implementing other Community policies and activities”), etc. I.4. The aims of Trade Policy Article 2 sets the general aims – including to promote the sustainable development of economic activities, high employment and competitiveness, the raising of the standard of living and quality of life, and environmental protection.

  6. Historic development … to “behind the border” issues II.1. From tariffs to non-tariff barriers From tariffs and quotas... Technical Barriers to Trade Sanitary and Phytosanitary Measures

  7. Historic development 1994 – General Agreement on Trade in Services (GATS) Based on the GATT model, GATS deals with international trade in services (financial, telecoms, professional services etc.). 4 Modes of Provision: (1) cross-border; (2) customer moves; (3) commercial presence; (4) provider (natural person) moves 1994 – Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) Minimum standards of intellectual property protection II.2. From trade in goods to services and intellectual property 1947 – General Agreement on Tariffs and Trade (GATT) Customs duties, quotas, anti-dumping, safeguards, internal regulations affecting the marketing of goods, etc.

  8. Treaty of Amsterdam – Possibility to extend the scope of the CCP to international negotiations on trade in services and intellectual property: unanimity required Treaty of Nice – Trade in Services and Commercial Aspects of Intellectual Property fall within the scope of the CCP… with some exceptions and specific rules: • Unanimity in some sectors • Cultural, audiovisual, social, educational, health services II.3. EC competence: adjusting to reality ECJ Opinion 1/94 – Article 133 of the Treaty covers more than trade in goods …

  9. III.1. The institutional set up: Main Actors • The Council • The Commission • The European Parliament • The Member States

  10. The Commission has the power of initiative = proposals • The Commission enjoys executive powers = implementation The Council is the decision maker • Adopts by Qualified Majority Trade Regulations • In some limited cases, it may exercise executive powers The European Parliament • is informed by the Commission of trade policy developments III.2. The adoption of autonomous acts Adoption/execution

  11. The Commission is the negotiator • On behalf of the Community (and the 25 Member States) The Council is the decision maker • Authorises the opening of negotiations • Issues negotiating guidelines (usually on the basis of a Commission proposal) • Approves the result of the negotiation (generally by qualified majority) The European Parliament • is informed by the Commission of trade policy developments • gives “assent” on major treaty ratifications (e.g. association agreements) III.3. The negotiation of international agreements (pure Community agreements) The negotiating process

  12. III.4. The 133 Committee Role of the Article 133 Committee: Council Working group operating on the basis of Article 133 Covers all matters falling under Common Commercial Policy Consists of the MS, Council Secretariat, Commission. Chaired by the Presidency. Consultative body, does not take formal decisions. Issues where a formal Council decision is needed will be “cleared” in the 133 Committee before submitting the proposal to the Council

  13. III.5 Example of running the process in the Trade policy Area Decision to launch negotiations of a Trade Agreement COMMISSION prepares the issue (Responsible service + Internal Consultation Comments/Modifications 133 Committee EP Informed COUNCIL

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