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“Introduction to EU Trade Policy” – July 2008
How We Make Trade Policy
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Contents
Part I: EU Trade Powers
Part II: The evolving scope of Trade Policy
Part III: Institutional set up
Part IV: Conclusions
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I.1. Trade Policy – The External Side of the Customs
Union
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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”
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I.2. A Transfer of Sovereignty
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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
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I.3. An exclusive EC competence
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“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
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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.
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.
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II.1. From tariffs to non-tariff barriers
Historic development
From tariffs and
quotas...
… to “behind the
border” issues
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Technical Barriers to Trade
Sanitary
and Phytosanitary Measures
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II.2. From trade in goods to services and intellectual
property
Historic development
1947 – General Agreement on Tariffs and Trade (GATT)
Customs duties, quotas, anti-dumping, safeguards, internal regulations affecting
the marketing of goods, etc.
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
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II.3. EC competence: adjusting to reality
ECJ Opinion 1/94 – Article 133 of the Treaty covers more than trade in
goods …
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
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III.1. The institutional set up: Main Actors
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The Council
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The Commission
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The European Parliament
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The Member States
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III.2. The adoption of autonomous acts
Adoption/execution
•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
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III.3. The negotiation of international agreements
(pure
Community agreements)
The negotiating process
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)
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III.4. The 133 Committee
Role of the Article 133 Committee:
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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
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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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