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2017 | OriginalPaper | Chapter

Distinguished Essay: A Quiet Revolution—The Changing Nature of the EU’s Common Commercial Policy

Author : Marise Cremona

Published in: European Yearbook of International Economic Law 2017

Publisher: Springer International Publishing

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Abstract

This paper assesses the development of the EU’s Common Commercial Policy (CCP) since the coming into force of the Lisbon Treaty. It argues that we have witnessed a “quiet revolution” in EU trade policy. Three major changes are identified. First, the extension of the CCP to include trade in services, the commercial aspects of intellectual property and foreign direct investment. Second is the embedding of EU trade policy into the Union’s overall principles and objectives, providing a framework for the broad discretion left by the Treaty to trade policy-makers. Third is the change to the decision-making structures of trade policy. The Commission still plays a key strategic role, but the Commission’s key interlocutors now include the European Parliament as well as the Council. The European Parliament has the power to consent to—or to withhold consent from—trade agreements and has proved willing to use its power.

Working together with a renewed political and public interest in trade policy, in the wake of several contentious agreements, this new dynamic has led to calls for, and significant progress towards, greater transparency in the negotiation of trade agreements.

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next chapter Front-Loading Trade Policy-Making in the European Union: Towards a Trade Act

Meunier and Nicolaidis (1999).

Although the relevant chapter of the original Treaty of Rome was headed simply “Commercial Policy”, Article 113 EEC referred from the start to the establishment of a “common commercial policy”. Among the EU’s external policies, only the common commercial policy, the common foreign and security policy and (since the Lisbon Treaty) the common security and defence policy are referred to as common policies: Koutrakos (2015).

A high watermark of this fragmentation might be the Decision concluding the WTO agreements in 1994 which was based on 11 substantive legal bases, including the CCP (Articles 43, 54, 57, 66, 75, 84(2), 99, 100, 100a, 113, and 235 EC): Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986–1994), OJ 1994 L 336/1.

European Commission, Trade for All—Towards a more responsible trade and investment policy, 14 October 2015 (“Trade for All”).

European Commission, Trade for All, p. 20.

Council Directives for the negotiation on the Transatlantic Trade and Investment Partnership between the European Union and the United States of America, 17 June 2013, Council doc. 11103/13, declassified 9 October 2014.

Cecilia Malmström, Signing our trade agreement with Canada, blog post 30 October 2016, http://ec.europa.eu/commission/2014-2019/malmstrom/blog/signing-our-trade-agreement-canada_en (last accessed 1 March 2017).

On milieu goals, see Tocci (2007), p. 5.

Article 21(3) TFEU.

CJEU, opinion 1/75, Local Costs, ECLI:EU:C:1975:145.

CJEU, joined cases 21 to 24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, ECLI:EU:C:1972:115, paras. 10–13.

The preambles of the early regulations establishing common rules for imports claimed that “the liberalization of imports […] is the starting point for common rules in this field”. See e.g. Council Regulation 288/82/EEC on common rules for imports, OJ 1982 L 35/1.

CJEU, case C-150/94, UK v Council, ECLI:EU:C:1998:547, para. 67.

See e.g. Agreement between the Government of the United States of America and the European Community on the coordination of energy-efficient labelling programs for office equipment, OJ 2001 L 172/1; CJEU, case C-281/01, Commission v Council, ECLI:EU:C:2002:761.

See e.g. Council Decision 2004/513/EC concerning the conclusion of the WHO Framework Convention on Tobacco Control, OJ 2004 L 213/8.

Before the introduction of a specific legal basis for economic sanctions, CCP powers were used for this purpose; see e.g. CJEU, case C-124/95, The Queen, ex parte Centro-Com Srl v HM Treasury and Bank of England, ECLI:EU:C:1997:8.

Dimopoulos (2010), p. 161 argues that the strengthened obligation carries at least the obligation not to move backwards in terms of liberalisation.

European Commission, Trade, Growth and World Affairs: Trade Policy as a Core Component of the EU’s 2020 Strategy, COM (2010) 612; Cremona (2010a).

European Commission, Trade for All, p. 8.

European Commission, Trade for All, p. 7.

European Commission, Trade for All, p. 21.

Articles 3(5) and 21 TEU.

In CJEU, opinion 1/78, ECLI:EU:C:1979:224, para. 41 et seq., for example, the Court accepted that trade instruments could be used to advance development objectives. Trade powers may also be used to further environmental objectives (see e.g. CJEU, case C-281/01, Commission v Council, ECLI:EU:C:2002:761) and broader foreign policy objectives via the imposition of economic sanctions (see e.g. CJEU, case C-124/95, R v HM Treasury and Bank of England ex parte Centro-Com, ECLI:EU:C:1997:8). Such cases may prompt disputes over the appropriate legal basis for the measure; see further Koutrakos (2008), Cremona (2012).

See for example the free trade agreements with Korea, Colombia and Peru, Singapore and Canada.

European Council Conclusions, 16 September 2010, Council doc. EUCO 21/1/10 REV 1; CO EUR 16 CONCL 3, Annex II.

Regulation 1029/2012/EU introducing emergency autonomous trade preferences for Pakistan, OJ 2012 L 316/43, recital 5. It may be noted that despite the emergency it took 2 years for this Regulation to be adopted, witness to the debate engendered in the European Parliament, as well as the need for a WTO waiver.

European Commission, Trade for All, p. 22.

EU Strategic Framework and Action Plan on Human Rights and Democracy, 25 June 2012, Council doc. 11855/12.

EU Strategic Framework and Action Plan on Human Rights and Democracy, 25 June 2012, Council doc. 11855/12, Action Plan point 1.

Council conclusions on a rights-based approach to development cooperation, Foreign Affairs (Development) Council, 19 May 2014, Council doc. 10020/14, para. 8. See further DG Trade Guidelines on the analysis of human rights impacts in impact assessments for trade-related policy initiatives, 2 July 2015, tradoc 153591. On Impact Assessment generally see Commission Staff Working Document, Better Regulation Guidelines, 19 May 2015, SWD (2015)111, pp. 16–32.

Draft recommendation of the European Ombudsman in the inquiry into complaint 1409/2014/JN against the European Commission, para. 21 et seq. The complainants were the International Federation for Human Rights (FIDH) and the Vietnam Committee on Human Rights (VCHR).

Draft recommendation of the European Ombudsman in the inquiry into complaint 1409/2014/JN against the European Commission, para. 24 et seq.

See the joint FIDH-VCHR observations on the opinion of the Commission on the European Ombudsman’s draft recommendation ref. 1409/2014/JN, 30 September 2015.

Decision in case 1409/2014/MHZ on the European Commission’s failure to carry out a prior human rights impact assessment of the EU-Vietnam free trade agreement, para. 28.

See further Vianello (2016).

GC, case T-512/12, Polisario Front, ECLI:EU:T:2015:953.

GC, case T-512/12, Polisario Front, ECLI:EU:T:2015:953, para. 225.

Opinion of AG Wathelet to CJEU, case C-104/16 P, Polisario Front, ECLI:EU:C:2016:677, para. 274.

Opinion of AG Wathelet to CJEU, case C-104/16 P, Polisario Front, ECLI:EU:C:2016:677, paras. 270–274. The General Court referred to a number of rights contained in the EU’s Charter of Fundamental Rights, including Article 1 (human dignity), Article 5 (prohibition of slavery and forced labour), Articles 31 and 32 (fair working conditions and prohibition of child labour).

CJEU, case C-104/16 P, Council v Front Polisario, ECLI:EU:C:2016:973.

Although not directly relevant to our discussion here, the Court’s ruling is of legal and practical significance in holding that the EU’s Association Agreement with Morocco does not apply to the Western Sahara, and therefore that the practice of accepting products from the region as of Moroccan origin will have to be altered.

Nevertheless we see a move in this direction in the Court of Justice’s judgment in Polisario Front: in its interpretation of the territorial application of the agreement with Morocco, and the effect of practice in implementing the agreement, the Court took account of principles of international law, including the principle of self-determination.

According the Article 15(1) TEU the European Council is to “define the general political directions and priorities” of the EU in general terms; in the external context, Article 22(1) TEU provides that the European Council “shall identify the strategic interests and objectives of the Union in matters of foreign and security policy and other areas of the external action of the Union”. The Foreign Affairs Council, according to Article 16(6) TEU, “shall elaborate the Union’s external action on the basis of strategic guidelines laid down by the European Council and ensure that the Union’s action is consistent”.

Article 27(3) TEU; the EEAS was established by Council Decision 2010/427/EU.

European Commission, Trade, Growth and World Affairs: Trade Policy as a Core Component of the EU’s 2020 Strategy, COM (2010) 612, p. 15.

European Commission, Trade for All, p. 22.

Shared Vision, Common Action: A Stronger Europe A Global Strategy for the European Union’s Foreign And Security Policy, 28 June 2016.

Recent examples include own-initiative reports on the Trade in Services agreement (TiSA) under negotiation (2015/2233 (INI)), and on future trade and investment strategy (2015/2015 (INI)).

European Commission, Trade, Growth and World Affairs: Trade Policy as a Core Component of the EU’s 2020 Strategy, COM (2010) 612; Bendini R, The future of the EU trade policy, European Parliament In-Depth Analysis, DG EXPO/B/PolDep/Note/2015_227 EN, July 2015-PE 549.054, p. 7.

European Commission, Trade for All, p. 8.

European Commission, Trade for All, p. 7.

Council Decision 94/800/EC, OJ 1994 L 336/1.

Council Decision 2011/265/EU of 16 September 2010 on the signing, on behalf of the European Union, and provisional application of the Free Trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part OJ 2011 L 127/1. Article 8 of the decision provides: “The Agreement shall not be construed as conferring rights or imposing obligations which can be directly invoked before Union or Member State courts and tribunals.” Decision 2015/2169/EU of 1 October 2015 on the conclusion of the FTA (OJ 2015 L 307/2) contains an identical provision.

See further Semertzi (2014), p. 1125.

Trade Agreement between the European Union and its Member States, of the one part, and Colombia and Peru, of the other part, OJ 2012 L 354/3. See also the agreement with Central America, Article 356; the agreement with Singapore, Article 17.5. In the Association Agreement with Ukraine, a footnote to chapter 14 of Title IV (the DCFTA) provides: “For the avoidance of doubt, this Title shall not be construed as conferring rights or imposing obligations which can be directly invoked before the domestic courts of the Parties.” The Council decision 2014/668/EU, OJ 2014 L 278/1, Article 7 on the signature and provisional application of this agreement includes a similar statement as regards the agreement as a whole, not merely its trade provisions.

CJEU, case 104/81, Hauptzollamt Mainz v Kupferberg, ECLI:EU:C:1982:362.

Evenett S (2016) Paper tiger? EU trade enforcement as if binding pacts mattered. New Direction – The Foundation for European Reform, http://europeanreform.org/index.php/site/publications-article/paper-tiger-eu-trade-enforcement-as-if-binding-pacts-mattered (last accessed on 1 March 2017).

Mavroidis and Sapir (2015), p. 357: “our data supports the view that the EU and the US become ‘doves’ after the signature of an FTA. […] We are not suggesting that the EU and the US become ‘doves’ because of the signing of the FTA. We are simply stating that they become ‘doves’ after this event.”

Kuijper et al. (2013), p. 373.

See now Article 28 TFEU.

CJEU, case 41/76, Suzanne Criel, née Donckerwolcke and Henri Schou v Procureur de la République, ECLI:EU:C:1976:182. Despite the establishment of the common external tariff in 1961 it was not until the completion of the internal market in the 1990s with its removal of internal border controls that all national-based quotas on goods imported from outside the Community were abolished.

Although the CCP provides the basis for entering into international commitments, their implementation may be adopted under the EU’s agricultural policy competence.

CJEU, opinion 1/94, WTO, ECLI:EU:C:1994:384, paras. 24–27. Agreements that specifically concerned coal or steel products were, until the end of that Treaty’s life, concluded under the ECSC Treaty.

For an account, see Maresceau (1993), Eeckhout (1994).

CJEU, opinion 1/94, WTO, ECLI:EU:C:1994:384, paras. 38–47. The other modes of supply are: consumption abroad, where the consumer moves to the country in which the services are supplied; commercial presence, i.e. the presence of a subsidiary or branch; and the supply of services through the presence of natural persons. The reasons for defining the CCP to include this mode of cross-border supply of services were not very clear, the Court saying simply that it was “not unlike” trade in goods and that there was “no particular reason” why such a supply should not fall within the CCP.

Krajewski (2008).

See further Krenzler and Pitschas (2001), Herrmann (2002), Cremona (2002).

For general comment, see Krajewski (2005), Dimopoulos (2008), Bungenberg (2010), Krajewski (2011).

CJEU, opinion 1/75, Local Costs, ECLI:EU:C:1975:145.

Some specific sectoral rules still persist, however, in the manner of decision-making, with unanimity required in the Council for agreements “in the field of” certain services sectors: Article 207(4) TFEU, see further below.

CJEU, case C-414/11, Daiichi Sankyo Co. Ltd., ECLI:EU:C:2013:520.

CJEU, joined cases C-300/98 and C-392/98, Dior and others, ECLI:EU:C:2000:688; CJEU, case C-431/05, Merck Genéricos – Produtos Farmacêuticos, ECLI:EU:C:2007:496.

A formulation hitherto used primarily in the context of discussion of the purposes for which trade instruments may be used; see e.g. CJEU, case C-411/06, Commission v Parliament and Council, ECLI:EU:C:2009:518.

CJEU, case C-414/11, Daiichi Sankyo Co. Ltd., ECLI:EU:C:2013:520, para. 51.

CJEU, case C-414/11, Daiichi Sankyo Co. Ltd., ECLI:EU:C:2013:520, para. 52.

CJEU, opinion 3/15, Marrakesh Treaty, ECLI:EU:C:2017:114.

CJEU, opinion 3/15, Marrakesh Treaty, ECLI:EU:C:2017:114, para. 82.

CJEU, opinion 3/15, Marrakesh Treaty, ECLI:EU:C:2017:114, para. 91. The Court then went on to consider competence to conclude the Treaty under implied powers based on the existence of secondary legislation dealing with copyright, finding that on this basis EU competence was indeed exclusive.

It thus reflects Article 207(6) TFEU, which although not referred to by the Court can be sensed in the background to this judgment (see further below). It is an approach which follows the same logic as that applied by the Court in relation to the SPS and TBT agreements in CJEU, opinion 1/94, WTO, ECLI:EU:C:1994:384, paras. 30–33.

CJEU, case C-137/12, Commission v Council, ECLI:EU:C:2013:675.

The Commission challenged the validity of Council Decision 2011/853/EU on the signature of the Convention, which was based on Article 114 TFEU.

The legal basis of an international agreement will represent its main or predominant purpose; incidental elements need not be reflected in a separate legal basis; see e.g. CJEU, case C-377/12, Commission v Council, ECLI:EU:C:2014:1903.

Bungenberg (2010), p. 132; Devuyst (2011), p. 654.

A request for an opinion concerning the EU’s competence to conclude the proposed Free Trade Agreement with Singapore, which should throw light on this question, has been submitted by the Commission under Article 218(11) TFEU: CJEU, opinion 2/15, Singapore Agreement, pending. The opinion of AG Sharpston was delivered on 21 December 2016, ECLI:EU:C:2016:992.

See, inter alia, Karl (2004), Ceyssens (2005), Dimopoulos (2008), Bungenberg (2010), Ortino and Eeckhout (2011), Bischoff (2011).

The concept of direct investment, as contrasted with portfolio investment, has been interpreted by the Court in the context of the Treaty rules on free movement of capital; see e.g. CJEU, case C-446/04, Test Claimants in the FII Group Litigation v Commissioners of Inland Revenue, ECLI:EU:C:2006:774, paras. 180–182.

CJEU, case C-137/12, Commission v Council, ECLI:EU:C:2013:675, para. 57.

A position also adopted by AG Sharpston to CJEU, opinion 2/15, Singapore Agreement, ECLI:EU:C:2016:992, paras. 330–336.

CJEU, case C-205/06, Commission v Austria, ECLI:EU:C:2009:118; CJEU, case C-249/06, Commission v Sweden, ECLI:EU:C:2009:119; CJEU, case C-118/07, Commission v Finland, ECLI:EU:C:2009:715.

European Commission, Towards a comprehensive European international investment policy, COM (2010) 343, p. 8. The Commission has relied on this argument in its submissions in opinion 2/15, seeking to establish that if competence is not exclusive on the basis of Article 207 TFEU, then it should nevertheless be exclusive on the basis of Articles 63 and 3(2) TFEU. Exclusivity of the type described in the last phrase of Article 3(2) TFEU (effect on common rules) has not so far been founded directly on a Treaty provision rather than secondary legislation.

See e.g. Ortino and Eeckhout (2011), pp. 315–318.

Opinion of AG Sharpston to CJEU, opinion 2/15, Singapore Agreement, ECLI:EU:C:2016:992, paras. 350–359.

CJEU, opinion 1/08, GATS, ECLI:EU:C:2009:739, paras. 152–173. This is a departure from the Court’s standard “predominant purpose” approach to the legal basis of international agreements; see further Cremona (2010b).

Opinion of AG Sharpston to CJEU, opinion 2/15, Singapore Agreement, ECLI:EU:C:2016:992, para. 114 et seq.

Thus, international agreements in the field of competition are based upon Article 103 TFEU; for a recent example see Council Decision 2014/866/EU on the conclusion of an Agreement between the European Union and the Swiss Confederation concerning cooperation on the application of their competition laws OJ 2014 L 347/1.

CJEU, case C-377/12, Commission v Council, ECLI:EU:C:2014:1903, para. 48.

See e.g. European Parliament, resolution of 5 July 2016 on a new forward-looking and innovative future strategy for trade and investment, P8_TA(2016)0299, A8-0220/2016 (2015/2105(INI)).

See e.g. European Commission, Investment in TTIP and beyond – the path for reform, 12 May 2015.

See further Cremona (2014).

100

Framework Agreement on relations between the European Parliament and the Commission, 20 October 2010, P7_TA(2010)0366, paras. 23–27 and Annex 3 deal with international negotiations; Annex 2 deals with Parliamentary access to classified information.

101

Framework Agreement on relations between the European Parliament and the Commission, 20 October 2010, P7_TA(2010)0366, Annex 3, para. 5.

102

European Parliament, resolution of 10 March 2010 on the transparency and state of play of the ACTA negotiations, P7_TA(2010)0058. See also European Parliament, declaration of 9 September 2010 on the lack of a transparent process for the Anti-Counterfeiting Trade Agreement (ACTA) and potentially objectionable content, P7_TA(2010)0317.

103

Reply by Commissioner De Gucht on behalf of the Commission to Written question E-0147/10 by Alexander Alvaro (ALDE); see also Transparency of ACTA Negotiations, MEMO 12/99, 13 February 2012.

104

European Parliament, resolution of 24 November 2010 on the Anti-Counterfeiting Trade Agreement (ACTA), P7_TA(2010)0432.

105

Article 15(3) TFEU; Regulation 1049/2001 regarding public access to European Parliament, Council and Commission documents, OJ 2001 L 145/43.

106

GC, case T-529/09, In’t Veld v Council, ECLI:EU:T:2012:215; CJEU, case C-350/12 P, Council v In’t Veld, ECLI:EU:C:2014:2039. The General Court, upheld by the Court of Justice partially annulled the Council’s refusal to allow access to the opinion of the Council’s Legal Service concerning the Commission’s recommendation to the Council to authorise the opening of the SWIFT negotiations. The declassified document was made available on 16 February 2015 as Council doc. 11897/09 DCL 1.

107

GC, case T-301/10, In’t Veld v Commission, ECLI:EU:T:2013:135.

108

GC, case T-301/10, In’t Veld v Commission, ECLI:EU:T:2013:135, para. 181.

109

Monar (2010), p. 148.

110

111

These have been made available on the DG Trade web pages, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1230 (last accessed 1 March 2017).

112

European Ombudsman, case 119/2015/PHP, opened 18 February 2015, decision 4 November 2015. The Ombudsman has also undertaken an own-initiative inquiry into the transparency of the TTIP negotiations, see European Ombudsman, case OI/10/2014/RA, opened 29 July 2014, decision 6 January 2015.

113

European Commission, Trade for All, p. 18 et seq.

114

On their interpretation, see CJEU, opinion 1/08, GATS, ECLI:EU:C:2009:739.

115

Article 207(4) para. 2 TFEU.

116

Article 207(4) para. 3 TFEU.

117

CJEU, opinion 1/08, GATS, ECLI:EU:C:2009:739.

118

Regulation 1219/2012/EU establishing transitional arrangements for bilateral investment agreements between Member States and third countries, OJ 2012 L 351/40.

119

AG Sharpston’s opinion in the case concludes that although substantial parts of the FTA are within exclusive competence, either via Article 207(1) TFEU or via Article 3(2) TFEU, some aspects fall within shared competence. See opinion of AG Sharpston to CJEU, opinion 2/15, Singapore Agreement, ECLI:EU:C:2016:992.

120

CETA is a recent example. See European Commission, Press release, 30 October 2016, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1569 (last accessed 1 March 2017). In the case of the FTA with Korea, the Council agreed that the agreement should not be given provisional application before the adoption of internal legislation of safeguard measures: Council Decision 2011/265/EU, OJ 2011 L 127/1. Article 3(2) provides: “The Council shall coordinate the effective date of provisional application with the date of the entry into force of the proposed Regulation of the European Parliament and of the Council implementing the bilateral safeguard clause of the EU-Korea Free Trade Agreement.”

121

The Association Agreement with Ukraine is a case in point; a mixed agreement, it is currently being provisionally applied. Following a negative referendum, ratification by the Netherlands has been delayed, raising questions as to the future of the agreement.

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Title: Distinguished Essay: A Quiet Revolution—The Changing Nature of the EU’s Common Commercial Policy
Author: Marise Cremona
Publisher: Springer International Publishing
Book: European Yearbook of International Economic Law 2017
Print ISBN: 978-3-319-58831-5

Electronic ISBN: 978-3-319-58832-2

Copyright Year: 2017
DOI: https://doi.org/10.1007/978-3-319-58832-2_1