Rhetoric and reticence: EU external commercial policy in a multilateral context

Common Market Law Review

Volumn 38, Issue 2, 2001, Pages 359-396

  Cremona, Marise ^a,b  

^a Department of European Commercial Law ^*

^b QUEEN MARY UNIVERSITY OF LONDON   (United Kingdom)

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EID: 26444562496     PISSN: 01650750     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (118)

1. Commission Communication "WTO Aspects of the EU's Preferential Trade agreements With Third Countries", 16 Jan. 1997, SEC(96)2168 final, at p. 11.
2. This is not intended to imply that RTAs are a phenomenon only or even primarily centred around the EU; one has only to think of NAFTA, MEROSUR, APEC, ASEAN, SADC and the proposals for a FTAA.
3. Jackson, The World Trade Organization: Constitution and Jurisprudence (Pinter, 1998), at p. 56.
4. See e.g. the Council Conclusions on the EU's position for Seattle, Conclusions of GAC, 26 Oct. 1999; see further discussion in text at note 44 infra.
5. Commission Communication to Council, Free Trade Areas: An Appraisal, SEC(95)322, Annex 1.
6. Ibid.
7. Turkey - Restrictions on Imports of Textile and Clothing Products, Appellate Body Report WT/DS34/AB/R, 22 Oct. 1999.
8. Case C-352/96, Italy v. Council, [1998] I-6937.
9. Case C-149/96, Portugal v. Council, judgment of 23 Nov. 1999, nyr.
10. Jackson, op. cit. supra note 3, at p. 54. The MFN (most favoured nation) obligation of Art. I GATT 1994 requires that every advantage or privilege granted by one contracting party to any product originating in any other country shall be accorded "immediately and unconditionally" to like products originating in all other contracting parties. Thus, while the beneficiaries of MFN are the GATT contracting parties, the advantages and preferences included extend to those offered to "any other country".
11. Definitions of free trade area and customs union for the purposes of Art. XXIV GATT 1994 are given in Art. XXIV:8(a) and (b).
12. Jackson, op. cit. supra note 3, at p. 55.
13. Turkey - Restrictions on Imports of Textile and Clothing Products, Appellate Body Report WT/DS34/AB/R, 22 Oct. 1999. The following discussion of this case draws on material in Cremona, "Neutrality of Discrimination? The WTO, the EU and External Trade" in de Burca and Scott (Eds.), The Constitutional Relationship Between the EU and the WTO (Hart Publishing, Oxford, forthcoming).
14. Ibid. at para 9.52-9.53.
15. Ibid. at para 9.50.
16. Ibid. at paras 58-60, referring to India - Quantitative Restrictions on Imports of agricultural, Textile and Industrial Products WT/DS90/AB/R, adopted 22 Sept. 1999, at paras. 80-109.
17. Ibid. at para 60.
18. Ibid. at para 57.
19. Under Art. XXIV(8) restrictions must be eliminated in "substantially all the trade" between the constituent parties to the customs union or free trade area.
20. The Appellate Body alludes to the fact that this would be a temporary measure, in that the Community will have to remove its quantitative restrictions in time under the WTO Agreement on Textiles and Clothing.
21. Turkey: textile Imports, AB Report, cited supra note 13, at para 65.
22. Italy v. Council, cited supra note 8. Agreements with Australia and Thailand approved by Council Decision 95/592/EC of 22 Dec. 1995 O.J. 1995, L 334/38, implemented by Council Regulation 1522/96/EC of 24 July 1996 opening and providing for the administration of certain tariff quotas for imports of rice and broken rice O.J. 1996, L 190/1.
23. Italy v. Council, cited supra note 8, at paras. 19-21. In Case C-69/89, Nakajima, [1991] ECR1-2069, confirmed by Case C-280/93, Germany v. Council, [1994] ECR I-4973, at paras. 106-109, the Court held that it would review the lawfulness of the Community act from the point of view of GATT rules if the Community intended to implement a particular obligation entered into within the framework of GATT.
24. Italy v. Council, cited supra note 8, at para 23.
25. Ibid. at para 11.
26. Case C-150/94, UK v. Council (import quotas for toys from China), [1998] ECR I-7235, at paras. 53-54. For further discussion of this point, see Cremona, "EC External Commercial Policy after Amsterdam: Authority and Interpretation within Interconnected Legal Orders" in Weiler (Ed.), Towards a Common Law of International Trade?: The EU, the WTO and the NAFTA, Collected Courses of the Academy of European Law 1999 (Oxford University Press, 2000).
27. Turkey: textile imports, AB Report, supra note 13, at para 57. Art. XXIV:4 requires, according to the AB, that the balance of a customs union agreement should be in favour of trade facilitation rather than the creation of barriers to trade with third countries.
28. Portugal v. Council, cited supra note 9. See annotation by Rosas, 37 CML Rev. (2000), 797-816.
29. The two cases also intersect in their timing. Case C-149/96 was initiated by Portugal in May 1996, the Opinion of A.G. Saggio was delivered in Feb. 1999 and the Judgment is dated 23 Nov. 1999. In the Case of Turkey: textile imports from India, India requested a Panel in Feb. 1998, the Panel reported on 31 May 1999 and the Appellate Body Report was issued on 22 Oct. 1999, just a month before the Court's ruling in Case C-149/96.
30. Portugal v. Council, cited supra note 9, at para 47. The Court maintained its two exceptions to this rule: where the Community intended to implement a specific obligation assumed in the context of the WTO, and where the Community measure refers expressly to the precise provisions of the WTO agreements; see Nakajima, cited supra note 23 and Germany v. Council, cited supra note 23.
31. Portugal v. Council, cited supra note 9, at para 40.
32. Ibid. at para 41.
33. Ibid. at para 46.
34. Case 104/81, Hauptzollamt Mainz v. Kupferberg, [1982] ECR 3641.
35. Opinion of A.C. Cosmos in Case C-183/95, Affish BV v. Rijksdienst voor de keuring van vee en vlees, [1997] ECR1-4315, at para 120, note 97.
36. Portugal v. Council, cited supra note 9, at para 48. The Preamble to Council Decision 94/800 O.J. 1994, L 336/1, states that "by its nature, the Agreement establishing the World Trade Organization, including the Annexes thereto, is not susceptible to being directly invoked in Community or Member State courts". See Cremona, op. cit. supra note 26 for a discussion of the significance of this statement.
37. Opinion in Portugal v. Council, cited supra note 9, para 23. The A.G. has earlier (at para 18) distinguished two questions: whether a provision of an international agreement can be used as a basis for a challenge to the legality of Community acts; and whether such a provision is directly effective in the sense of creating individual rights. He argues for the former rather than the latter. The Court does not allude to this distinction, but its judgment is couched in terms of the former question (the rights of individuals were not of course directly at issue in Portugal v. Council but it seems inconceivable that the Court would now, in a case originating in a national court, give an affirmative answer to the second question in relation to the WTO Agreements).
38. Under Art. IX:2 of the WTO Agreement, the Ministerial Conference and General Council have exclusive authority to interpret the provisions of the WTO Agreements. Under Art. 3(9) of the DSU (Annex 2 to the WTO Agreement), the provisions of the DSU are "without prejudice to the rights of Members to seek authoritative interpretation of provisions of a covered agreement through decision-making under the WTO Agreement . . .". Reports of Panels and of the Appellate Body are adopted by the Dispute Settlement Body (a political organ: the General Council of the WTO, consisting of representatives of all Members, convenes as the DSB under Art. IV:3 of the WTO Agreement).
39. On this point, see Peers, "Banana Split: WTO Law and Preferential agreements in the EC Legal Order", 4 European Foreign Affairs Review (1999), 195.
40. Opinion in Portugal v. Council, cited supra note 9, para 29, citing Art. 41(1)(b) of the Vienna Convention on the Law of Treaties.
41. Opinion 1/94, (re WTO Agreement), [1994] ECR1-5267.
42. Italy v. Council, cited supra note 8.
43. Opinion in Portugal v. Council, cited supra note 9, para 29 (author's own translation).
44. Conclusions of GAC, 26 Oct. 1999; these were of course adopted prior to Seattle but were subsequently confirmed by the Informal Trade Council in March 2000.
45. Trade Policy Review Mechanism, EU Policy Statement, European Commission Brus-sels, 19 July 2000, D (2000) at p. 16.
46. Ibid. at pp. 6 and 17. As van Calster points out, however, "the EC is far from a stranger to unilateral foreign trade policy"; van Calster, "The EU, Trade, Environment and Unilateralism: Passing the Buck", 5 European Foreign Affairs Review (2000), 9.
47. Trade Policy Review Mechanism, EU Policy Statement, European Commission Brussels, 19 July 2000, D (2000), at p. 8.
48. Trade Policy Review Body: The European Union, Report by the Secretariat - Summary Observations, 4 July 2000.
49. Trade Policy Review Mechanism, op. cit. supra note 47, Highlights from the Debate, at p. 25-26. These 17 countries are largely European, although the balance will alter as the agreements with South Africa and Mexico (and eventually Mercosur) enter into force. The EU has negotiated MFN treatment for its exports with a number of countries that are not yet WTO members, such as Russia and Ukraine.
50. Smith and Woolcock, "European Commercial Policy: A Leadership Role in the New Millennium?", 4 European Foreign Affairs Review (1999), 439 at 458.
51. For further discussion of this process, see in particular Cremona, "Flexible Models: External Policy and the European Economic Constitution" in de Búrca and Scott (Eds.), Constitutional Change in the EU: From Uniformity to Flexibility? (Hart Publishing, 2000);
52. Cremona, "Multilateral and Bilateral Approaches to the Internationalization of Competition Law: An EU Perspective" in Cremona, Fletcher and Mistelis (Eds.), Foundations and Perspectives of International Trade Law (Sweet and Maxwell, 2001, forthcoming).
53. Communication from the Commission to the Council and the European Parliament on Community Assistance for the Stabilization and Association Process for certain countries of South-East Europe: CARA Programme (Community Association and Reconstruction Assistance) 2000-2006, COM(1999)661, 8 Dec. 1999.
54. Commission Communication to Council, Free Trade Areas: An Appraisal, SEC(95)322, 8 March 1995; the Communication was discussed in the General Affairs Council on 12 June 1995.
55. Ibid. at p. 12.
56. The Interregional Framework Cooperation Agreement between the European Community and its Member States and the Southern Common Market and its Party States, O.J. 1996, L 69/4; O.J. 1999, L 112/66, entered into force 1 July 1999.
57. Cooperation Agreement of 7 March 1980 between the EC and ASEAN (Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam) 1980 O.J. 1980, L 144; a proposal has been made for the accession of Laos and Cambodia to the Cooperation Agreement following their accession to ASEAN: IP/00/732.
58. See "The European Union and South Africa: An overview of the relationship in the light of the conclusion of the Trade, Development and Cooperation Agreement", European Commission, April 1999.
59. The example given by the Commission relates to the FTAs (Europe Agreements) with the central and eastern European States: "The more FTAs the Union concludes in the next few years, the more rapidly the CEEC economies will have to adjust if they are to meet the challenge." SEC (95)322 at p. 8.
60. Ibid. at p. 7.
61. Commission Communication, "The Global Challenge of International Trade: A Market Access Strategy for the European Union", 14 Feb. 1996, COM(96) 53, at para 12.
62. Ibid. at para 23.
63. Thanks to Faber for discussion on this point. See also Cremona, "The European Union as an International Actor: Issues of Flexibility and Linkage", 3 European Foreign Affairs Review (1998), 67.
64. Regulation 3286/94 on the enforcement of Community rights under international trade rules O.J. 1994, L 349/71.
65. Council Regulation 2820/98 O.J. 1998, L 357/1, Arts. 22-26.
66. The WTO's Trade Policy Review Body's Report on EU Trade Policy in July 2000 also mentions textiles and clothing as a sector where the EU's progress in liberalizing its own markets has been disappointing: although quotas on textile and clothing products have been liberalized under the WTO Agreement on Textiles and Clothing, the lifting of quotas on 12 of the 52 product categories restricted in 1990 represented only 5.4% of restricted imports and only benefited a handful of developing countries: PRESS/TPRB/137, 4 July 2000.
67. Cited supra note 1.
68. For a discussion of these proposals, see Cremona, "External Economic Relations and the Amsterdam Treaty" in O'Keeffe and Twomey (Eds.), Legal Issues of the Amsterdam Treaty (Hart Publishing, 1999).
69. See note 1 supra.
70. In Sept. 1999, the EU and its Member States submitted a paper on systemic issues in relation to Article V GATS to the CRTA: Communication from the European Communities and their Member States on "Article V of the GATS: Systemic Issues", 21 Sept. 1999, WT/REGAV/35. The paper addressed, in particular, Art. V:1(a) and V:1(b).
71. See e.g. CRTA Report for 1999, WT/REG/8.
72. EU Association Agreements have been concluded with Hungary, Poland, Romania, Bulgaria, Slovakia, Czech Republic, Estonia, Latvia, Lithuania, Slovenia; they are free-trade agreements.
73. EU Association Agreements have been concluded within the Euro-Mediterranean Partnership, with Morocco, Tunisia, Israel, the Palestine Authority and Jordan; negotiations with Egypt concluded in June 1999; agreements under negotiation with Syria, Lebanon and Algeria. Barcelona Conference Declaration and Work Programme 27-28 Nov. 1995, Bull. EU 11-1995.
74. Commission Communication cited supra note 1, at p. 3.
75. Agreement on Trade, Development and Cooperation between the European Community and its Member States and the Republic of South Africa O.J. 1999, L 311/3.
76. The "Global Agreement", O.J. 1997, C 350/6, COM(97)527.
77. See note 55 supra. MERCOSUR consists of Argentina, Brazil, Paraguay and Uruguay with Chile and Bolivia as associate members.
78. The Global Agreement itself is not yet in force; however, the Interim Agreement on Trade came into force in July 1998, and Decision 2/2000 of the Joint Council of the Interim Agreement on Trade and Trade-Related Matters brought into effect the free-trade provisions of the Agreement and came into force on 1 July 2000, O.J. 2000, L 157/10. See also Communication from the Commission to the Council and the European Parliament accompanying the Final Text of the Draft Decisions by the EC-Mexico Joint Council, 18 Jan. 2000, COM(2000)9.
79. See text above following note 68.
80. Agreement on Trade, Development and Cooperation between the European Community and its Member States and the Republic of South Africa O.J. 1999, L 311/3, Art. 22.
81. The BNLS countries are also fellow members of the Southern Africa Development Community (SADC) which in August 1996 adopted a Trade and Development Protocol, designed to lead, within 8 years, to the establishment of a free trade area.
82. According to the Commission, the EU will liberalize 95% of its South African imports within 10 years, whereas South Africa will liberalize 86% of its EU imports within 12 years. Agricultural products will be included although the Community proposes exceptions for products totalling about 39% of the EU's current agricultural imports from South Africa.
83. Commission Communication, "The European Union and South Africa: An overview of the relationship in the light of the conclusion of the Trade, Development and Cooperation Agreement", April 1999, p. 18.
84. Agreement on Trade, Development and Cooperation between the European Community and its Member States and the Republic of South Africa O.J. 1999, L 311/3, Art 1(c).
85. Protocol 1, Art. 3(3) and (4); under Art. 3(3) cumulation of origin applies to materials of ACP origin incorporated into a product obtained in South Africa.
86. Cotonou Convention, Annex VI.
87. Beef and sugar are excluded from the free-trade agreement; safeguard measures and infant industry protection are provided for in Arts. 24 and 25.
88. Commission Communication, "The European Union and South Africa: An overview of the relationship in the light of the conclusion of the Trade, Development and Cooperation Agreement", April 1999, p. 18.
89. See note 72 supra.
90. This objective is also stressed in the EU's Common Strategy on Russia, adopted under Art. 13 TEU on 4 June 1999.
91. PCA with Russia O.J. 1997, L 327/1, Art. 10(2). There is an explicit reference to GATT Art. XXIV which is typical of the way in which the PCAs "shadow" GATT disciplines. The exception to MFN treatment covers free trade and customs union agreements and also "advantages granted to particular countries in accordance with the GATT and with other international arrangements in favour of developing countries".
92. Council Regulation 2820/98/EC of 21 Dec. 1998 applying a multiannual scheme of generalized tariff preferences for the period 1 July 1999 to 31 Dec. 2001, O.J. 1998, L 357/1.
93. Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries, Decision of the Contracting Parties of 28 Nov. 1979, L/4903, Art. 1: "Notwithstanding the provisions of Article I of the General Agreement, contracting parties may accord differential and more favourable treatment to developing countries, without according such treatment to other contracting parties." This exception, known as the "Enabling Clause", expressly included the GSP, under which non-reciprocal preferential tariff treatment is accorded on an autonomous basis by developed contracting parties to products originating in developing countries. The Decision also covered differential and more favourable treatment with respect to non-tariff measures, and special treatment for the least developed countries in the context of any general or specific measures in favour of developing countries.
94. The Fourth Lomé Convention was signed at Lomé, Togo 15 Dec. 1989, O.J. 1991, L 229/3; a revised text of Lomé IV following mid-term review was signed in Mauritius 4 Nov. 1995, Council & Commission Decision of 27 April 1998 O.J. 1998, L 156/1; the Convention expired on 29 Feb. 2000. The "Lomé waiver", agreed under Art. XXV:5 GATT, allowed an exception to the MFN obligation in Art. I of GATT 1994: "Subject to the terms and conditions set out hereunder, the provisions of paragraph 1 of Article I of the General Agreement shall be waived, until 29 February 2000, to the extent necessary to permit the European Communities to provide preferential treatment for products originating in ACP States as required by the relevant provisions of the Fourth Lomé Convention, without being required to extend the same preferential treatment to like products of any other contracting party." (The Fourth ACP-EEC Convention of Lomé, Decision of the Contracting Parties of 9 Dec. 1994, L/7604).
95. The new Agreement was signed in June 2000, in Cotonou, Benin; the trade provisions of the new Agreement are to be applied provisionally from 1 March 2000 following a Decision of the ACP-EC Committee of Ambassadors on 29 Feb. 2000. The EC and the ACP have made an application under Art. IX(3) of the WTO Agreement for a waiver for the new Agreement to cover the 8 year preparatory period.
96. For a discussion of the move towards reciprocity in the EU's contractual relations, see Cremona (2000), op. cit. supra note 51, at 74-83.
97. The Transatlantic Economic Partnership (TEP) was launched in May 1998 and the Action Plan adopted in Nov. 1998; see Commission Communication on new transatlantic marketplace, 18 March 1998, COM(98)125 final.
98. EC-USA Agreement on competition, O.J. 1995, L 95/45; EC-USA Agreement on the application of positive comity principles in the enforcement of competition laws, O.J. 1998, L 173/26; Agreement on Customs Cooperation and Mutual Assistance in Customs Matters, O.J. 1997, L 222/17; Agreement on mutual recognition between the EC and the USA, O.J. 1999, L 31/3 (the Agreement contains Sectoral Annexes on Telecommunication Equipment, Electromagnetic Compatibility, Electrical Safety, Recreational Craft, Pharmaceutical Good Manufacturing Practices (GMPs) and Medical Devices); Agreement for scientific and technological cooperation between the European Community and the Government of the United States of America, O.J. 1998, L 284/37; COM/99/0328 final.
99. Agreement for Scientific and Technological Cooperation between the EC and Canada, O.J. 1996, L 74/26, as amended by agreement in 1999, O.J. 1999, L 156/24; Agreement on customs cooperation between EC and Canada O.J. 1998, L 7/37; Agreement on mutual recognition between the EC and Canada, O.J. 1998, L 280/1; Agreement between EC and Canada regarding the application of their competition laws O.J. 1999, L 175/50.
100. The Framework Agreement for Trade and Cooperation between the EC and the Republic of Korea COM(96)141 final, O.J. 1996.C 188/11, is not yet inforce. There are also 1997 agreements on customs cooperation O.J. 1997, L 121/13 and on telecommunications procurement O.J. 1997, L 321.
101. Proposal for a Council Regulation concerning the implementation of projects promoting cooperation and commercial relations between the EU and the industrialized countries of North America, the Far East and Australasia, 23 June 2000, COM(2000)381 final; the Regulation would cover the US, Canada, Japan, the Republic of Korea, Australia and New Zealand.
102. Draft Treaty of Nice, provisional text of 12 Dec. 2000, SN 533/00, Art. 181a.
103. "The New Transatlantic Marketplace", Communication of Sir Leon Brittan, Mr Bangemann and Mr Monti, 11 March 1998. The second area of cooperation identified is that of harmonization of standards.
104. Agreement on Technical Barriers to Trade (one of the WTO Annex IA Agreements), Arts. 2.7 and 6.3. Mutual recognition is also possible under the SPS, Art. 4 and the GATS, Art. VII. Under the GATS, parties to a MRA must afford adequate opportunity for other interested Member to negotiate accession, and where recognition is the result of an autonomous decision, Members must allow other Members to demonstrate equivalence. There is a similar requirement in the Annex on Financial Services, Art. 3.
105. Nicolaïdis, "Mutual Recognition of Regulatory Regimes: Some Lessons and Prospects", Jean Monnet Working Paper No.7/97, http://www.law.harvard.edu/programs/JeanMon net/papers/97/97-07.html, at para 68.
106. "The New Transatlantic Marketplace", cited supra note 102.
107. See further, Cremona (2001), op. cit. supra note 51.
108. Nicolaïdis, op. cit. supra note 104, at para 66.
109. Sapir, "Trade Regionalism in Europe: Towards an Integrated Approach", 38 JCMS (2000), 151 at 158. Looking only at agreements between Council of Europe members, Sapir estimates 90 RTAs of which 86 are bilateral agreements.
110. Jackson, op. cit. supra note 3, at p. 57.
111. Van Dijck and Faber, "After the failure of Seattle: New challenges for the EU", 5 European Foreign Affairs Review (2000), 317.
112. Speech by Lamy, "Strengthening the Multilateral System", 18 July 2000, at Foreign Correspondents' Club, Tokyo during the EU-Japan summit meeting just before the G8 meeting in Okinawa.
113. See European Council, "Statement on the International Role of the European Community", Rhodes, 3 Dec. 1988;
114. Commission, "Europe 1992: Europe World Partner" Bulletin of the EC 10-1988, p. 10;
115. Smith and Woolcock, "European Commercial Policy: A Leadership Role in the New Millennium?", 4 European Foreign Affairs Review (1999), 439.
116. The Preamble to Council Regulation 3285/94/EC on the common rules for imports, O.J. 1994, L 349/53, states that "the starting point for the common rules for imports is liberalization of imports".
117. UK v. Council (import quotas for toys from China), cited supra note 26, at paras. 45 and 47.
118. Ibid., at para 67.