The European Union’s law on Common Commercial
Policy
For BBA, 2019 semester Łukasz Stępkowski
• As regards international trade, the Union has express and exclusive competence
• Reminder: „exclusive competence” means that only the Union is empowered to act within a given area, and the Member States are precluded from doing so;
when the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the
implementation of Union acts.
• Those powers of the Union are framed directly in the Treaties, so this is not an
„implied” power
• Article 3(1)(e) of the Treaty on the Functioning of the European Union provides that „The Union shall have exclusive competence in the following areas (…) e) common commercial policy”
• Those general provisions should be read together with the specific Treaty provisions on the EU’s Common Commercial Policy (CCP)
• The general idea for the CCP is found under the preamble to the FEU Treaty
• „DESIRING to contribute, by means of a common commercial policy, to the progressive abolition of restrictions on international trade”
• In addition, the CCP is considered to be a part of the EU’s „external action”
powers, in that it is not geared towards the Member States, but rather non- member state third countries
• As it is a subset of the EU’s external action, the CCP is subject to general rules on EU external action (ie Title V, Chapter I TEU : Articles 21-22).
• https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:12016M/TXT
• There are specific rules on the CCP in the FEU Treaty (Part Five, Title II of the FEU Treaty
• https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:12016E/TXT
• Specific provisions on the CCP are found under Articles 206-207 of the FEU Treaty
• Article 206 TFEU provides the aim of the CCP:
• „By establishing a customs union in accordance with Articles 28 to 32, the Union shall contribute, in the common interest, to the harmonious development of
world trade, the progressive abolition of restrictions on international trade and on foreign direct investment, and the lowering of customs and other barriers”.
• However, this provision is not meant to introduce a rule that third countries may invoke against the Union
• it is also general enough not to create any rights for individuals (esp. individuals from third countries; see Geiger/Khan/Kotzur, EU Treaties – Commentary, Munich 2015, p. 755)
• It does, however, illustratively refer to the areas subject to CCP : international trade (as far as public law is concerned), customs and other barriers, and
restrictions on trade and foreign direct investment
• The FDI part is newer and in place since the Treaty of Lisbon’s amendments
• Further, the CCP is governed by Article 207 TFEU
• Article 207(1) TFEU reads: „The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the
conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union's external action”.
• There is secondary law on the CCP, including secondary law adopted under the ordinary legislative procedure (207(2) TFEU)
• In addition, Article 207(1) TFEU is open-ended; the list of areas is illustrative
• Geiger/Khan/Kotzur et al add that while the list is illustrative, there may be exceptions that would otherwise fall within Article 207 TFEU (eg. Transport, p.759)
• The CCP includes entering into international agreements with third countries
• To that end, there are specific rules under Article 207(3) TFEU that supplement Article 218 TFEU (the latter is the general provision on EU’s conclusion of
international agreements)
• In particular, there is no room for the High Representative at all
• There is a special comittee which monitors the Commission’s conduct, in addition to the Council
• Outside Article 207 TFEU, Article 218 TFEU applies (and e.g. it is the Council which generally concludes international agreements on part of the Union, unless there is a delegation)
• There are special rules on voting in the Council as regards the CCP
• Generally, the Council votes by way of a qualified majority
• However, Article 207(4) TFEU reads:
• For the negotiation and conclusion of agreements in the fields of trade in services and the commercial aspects of intellectual property, as well as foreign direct
investment, the Council shall act unanimously where such agreements include provisions for which unanimity is required for the adoption of internal rules.
• The Council shall also act unanimously for the negotiation and conclusion of agreements:
• (a) in the field of trade in cultural and audiovisual services, where these agreements risk prejudicing the Union's cultural and linguistic diversity;
• (b) in the field of trade in social, education and health services, where these agreements risk seriously disturbing the national organisation of such services and prejudicing the responsibility of Member States to deliver them.
• Articles 206-207 TFEU do not refer to an individual and lack direct effect; this is left to secondary law
• As an example, there is the Regulation (EU) 2015/1843 of the European
Parliament and of the Council of 6 October 2015 laying down Union procedures in the field of the common commercial policy in order to ensure the exercise of the Union’s rights under international trade rules, in particular those established
under the auspices of the World Trade Organization („Regulation 2015/1843”) which has direct effect
• This Regulation sets up a procedure within which an individual may petition the Commission to engage in international trade disputes
• https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1552308264369&uri=CEL EX:32015R1843
• There is neither a closed definition nor an exhaustive list of trade measures which may be undertaken by the Union in response to the developments in
international trade
• However, the illustrative examples are:
• General changes in tariff rates
• Non-tariff trade restrictions
• Quotas
• Prohibitions of trade
• Licences
• Import and export surveillance
• Special import/export regimes (eg cultural goods)
• Anti-dumping duties
• Countervailing duties
• Dumping and what to do with it
• The practice of dumping amounts to exporting a product into the Union, where export price to the Union is less than a comparable price for a like product, in the ordinary course of trade, as established for the exporting country
• Obviously, this leads to injury on part of the Union’s undertakings, who then may not sell a comparable product for profit
• As such, the Commission is authorized to conduct anti-dumping proceedings within the Union and impose anti-dumping measures
• https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1552311978270&uri=CEL EX:02016R1036-20180608
• Countervailing duties
• These measures are used where there are subsidised imports into the Union
• As it is the case with anti-dumping, there is a procedure for the Commission to employ, modelled after the WTO’s Agreement on Subsidies and Countervailing Duties
• https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1552311979196&uri=CEL EX:02016R1037-20180608
• However, while modelled after the Agreement, the Commission may order provisional countervailing duties and there is, to an extent, retroactivity
• The CCP is subject to – as are great many things, both big and small – to the case law of the Court of Justice of the EU
• In particular, given that this is a field of EU external action, the Court is relatively often asked to give opinions on proposed international agreements, pursuant to Article 218(11) TFEU
• Opinion no 2/2015 :
https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1552313054671&uri=CELE X:62015CV0002(01)
EU/Singapore FTA
• Thank you for your attention
