Institutionalisation beyond the Nation State

The European Parliament plays a crucial role in transatlantic relations in a number of ways: as an institution directly engaging in political dialogue, in the negotiation of international agreements and in scrutinising key dossiers at committee level. The LIBE committee has relevant competence in the areas of law enforcement, data protection and migration and carries out these responsibilities via annual missions, own-initiative reports, hearings and scrutinising ongoing dossiers such as the Umbrella Agreement, data protection issues affecting transatlantic relations and US visa waiver programme reform. The chapter provides an update on these issues, in addition to other key transatlantic agreements such as the EU–USA PNR agreement, the new data protection reform package, the Privacy Shield, the Umbrella Agreement and the TFTP.

This chapter analyses transparency in the context of the institutionalisation of transatlantic relations more specifically in the fields of security and trade. In both of these fields, the EU’s rules on transparency clash with (soft) norms and arrangements of official secrets mostly agreed solely between EU and US executives without parliamentary involvement or external oversight. The paper analyses the TFTP and TTIP as two relevant cases in unveiling the dynamics between access to information and official secrets in transatlantic relations. The chapter posits that despite the many limitations to access to information, transatlantic relations have contributed to better-defined legal limits to secrecy in the EU. Yet the chapter concludes that the EU regime of official secrets, largely resulting from security-driven cooperation, grants a wide discretion to US institutions on disclosure of information and would remain a concern for parliamentary access to information in the EU.

This chapter explores the forms of governance that the EU–US PNR, TFTP, Privacy Shield and Umbrella Agreement have established in the transatlantic data space by looking at the relevant rules, procedures and institutions. It concludes that transatlantic institutionalisation in the sphere of data protection is weak and has not achieved a locus of legitimation as these agreements have been mainly negotiated by the executive serving national security interests and contain a complex set of fragmented, uncertain rules that in their substance have weakened fundamental rights’ protection. This chapter advocates that potential solutions for the current inadequate transatlantic data privacy framework could be searched at the domestic level through the emergence of new actors, such as private individuals and independent authorities that can act as watchdogs for the protection of data privacy rights beyond the EU borders.

This chapter is a transcribed account of Schrems’ experience from a lecture he delivered at City University of London in the Globallaw@City research dialogue series in 2016 in the midst of his ongoing litigation in Austria, Ireland and before the European Court of Justice on his personal litigation and its broader context. The talk is a closely transcribed version of his lecture with minor editing for sense, style and tone. The chapter outlines the evolution of Privacy Shield from the complaint lodged against Facebook and focusses on the enforcement of data protection and privacy laws in Europe.

Stronger institutionalisation of transatlantic privacy politics seems to be the next logical step in view of the growing social and economic importance of transatlantic data flow. The U.S. and the EU have set up multiple transatlantic institutions in the past. These specialised institutions are not based on a prior consensus on the value of privacy; rather, they are meant to contribute to the creation of such a consensus over time. In practice, however, the success of the specialised transatlantic institutions has been rather modest. Robust institutions will be indispensable for the success of data transfer regulation in the future. However, in view of the complex interests at stake, we need to be careful in choosing the right institutions to which we wish to entrust the matter.

This chapter analyses the regulation of financial services in transatlantic relations as a case study of the institutional approximation of the EU and US legal orders in the aftermath of the global financial crisis. The vastly interdependent EU and US financial regimes have produced significant cross-border effects, caused disputes and impeded transatlantic business. In this chapter, TTIP negotiations, regardless of their outcome, are observed as a benchmark for the institutionalisation of transatlantic regulatory cooperation in financial services. In particular, the chapter analyses the institutional implications of the newly established Joint EU–US Financial Regulatory Forum, which has replaced the EU–US Financial Markets Regulatory Dialogue. This is complemented by an insight into the position and actorness of business and civil society stakeholders. The chapter studies the contribution of these ‘soft’ institutional platforms to a greater convergence between the European and American rule-making processes and their respective approaches to financial services regulation.

The key component of the European Union’s ambitious foreign investment policy is the shift away from traditional investor-state arbitration to a permanent investment court system. This bilateral investment court features, amongst other things, an appeals mechanism and thereby responds to widespread criticism over the inconsistency, and consequent lack of legitimacy, of investor-state arbitration. Rather than addressing all aspects of investor-state dispute settlement, however, the investment court system is merely an institutional reform, which depends for all other relevant purposes on established arbitration rules. A TTIP investment court would therefore fall prey to the legal and institutional constraints for which ICSID and UNCITRAL have initially been designed. Taken together with the current US administration’s division on trade and investment policy, the prospects of a TTIP investment court remain all but certain. If successful, on the other hand, it would represent above all an important step towards transatlantic adjudicative institutionalisation.

Recent decades have witnessed the growing malaise of multilateralism within international economic governance and an inclination for bilateralism and tailor-made solutions. And yet procedural multilateralism does exist in international investment law. The chapter assesses the Mauritius Convention and a similar initiative, the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS), in order to draw inspiration for the EU’s multilateral investment court. The emphasis is on recent developments, in light of the EU’s 2017 public consultation on a multilateral reform of investment dispute resolution. It argues that while the UNCITRAL and OECD examples of ‘retroactively’ reforming thousands of existing treaties offer useful guidance, the establishment of a multilateral investment court would require two instruments —a convention regulating the relationship between IIAs and the court and a stand-alone convention (the statute) on the multilateral investment court —and only the first of these instruments can draw on the UNCITRAL and OECD precedents.

This chapter examines the evolution of the law and practice governing the signature and conclusion of trade and investment agreements in the EU. It argues that the 2001 Laeken Council objective to enhance the legitimacy of the European Union (EU) through “more democracy, transparency, and efficiency” can only be achieved by changing the modus operandi for EU economic treaty making from “mixed” to “EU-only” governance. The formal reform of EU exclusive competence for common commercial policy (CCP) through the 2009 Lisbon Treaty and the recent clarification of the material scope of the CCP by the Court of Justice of the European Union (CJEU) in Opinion 2/15 only make for one of the necessary conditions to this end. Abandoning the traditional Council practice of unanimous decision-making and member states” ratification in their own right in favor of qualified majority voting (QMV) in the Council is incentivized by the coincidence of a powerful commercial and political demand for the success of the Union’s external economic agenda, on the one hand, and the existence of a credible threat thereto, on the other hand. The threat to progress in the agenda for EU economic treaty making is epitomized by member states’ frequent exercise of “vetocracy” in the Lisbon era. The subordination of member states’ legislatures to EU exclusive governance of economic treaty making is, finally, rendered possible through democratic input legitimation at the EU level, which is now provided by the European Parliament in an increasingly effective manner. The chapter advances a normative claim for the accomplishment—and gives empirical evidence for the existence—of a new “legal-political equilibrium” in EU external economic governance, which develops as a result of the coincidence of the before-mentioned factors. In this new legal-political equilibrium, political transactions are shifted to a treaty-making modus operandi, which minimizes transaction costs of CCP governance, alters the configuration of institutionalized sources of democratic legitimacy, and enhances democratic representation at the same time.

This chapter assesses prospects for EU–US trade governance under the Trump administration, considering the dominance of political debate by plutocratic and populist extremes. It will explore how right populist resurgence is a backlash against global governance systems that have been indifferent to the impact of transnational integration on marginalised workers in post-industrial states. Transatlantic trade institutionalisation is undermined by a global system that enhances inequality, undermines job security and causes precarious living standards for many—a constituency ripe for protectionist, nationalist policies. However, Donald Trump’s use of populist rhetoric conceals his plutocratic motivations. The US’s move towards trade bilateralism—should it survive the chaotic beginnings of the administration—may undermine institutionalised mega-deals with Europe and elsewhere. But it will be motivated by plutocratic ambitions to escape constraining multilateral deals to impose US interests via bilateral trading arrangements where the US is the stronger partner.

Preferential trade agreements have become a tool for the external institutionalisation of a state’s preferred economic governance model, with the US and EU at the forefront of exchanging market access for acquiescence of their preferred rules. The institutionalisation and codification of the relationship with the TTIP was intended to create the world’s largest market and largest regulatory institutional arrangement, whose structural power and gravitational pull would bring other states towards it and its rules and norms. It should have been the Treaty that would bring an end to bilateral treaties. However, the underlying differences in EU and US preferences on this, as revealed in the comparison on recent agreements in this chapter, the potential for politicisation and contestation, and the importance of power asymmetries in negotiations have derailed negotiations. Yet these challenges were severely underestimated at the highest political levels, when the original ambitions for TTIP were set out.

Both in the EU and in the US, foreign affairs are complicated by the fact that power is divided vertically between the Union and the States. In the US, these complications arise from the fact that the States’ cooperation is often required to ensure the United States’ compliance with its international commitments, yet under US constitutional law the States are not required to cooperate. Moreover, Congress in principle cannot create private remedies against the States, either in federal or in State court. This stands in stark contrast to the situation under EU law. Despite the impact on the effectiveness of the treaties into which it enters, the US has nonetheless sought to safeguard the traditional federal balance even though it arguably has the power to ignore federalism when acting internationally.