No PLACE FOR WTO INSIDE THE EC LEGAL ORDER ?

1. No PLACE FOR WTO INSIDE THE EC LEGAL ORDER ? Dr. Mattia MELLONI, legal secretary Cabinet of Judge Tchipev, Court of First Instance of the EC

2. Outlines • The Court and the effects of international (int’l) agreements concluded by the Community in the EC legal order • The Court and GATT 1947 • The Court and WTO • Conclusions

3. The Court and the effects of international agreements concluded by the Community in the EC’s legal order • The general rule governing the implementation of int’l agreements in the EC legal order : Article 300 of the EC Treaty • Paragraph 7: The int’l agreements concluded by the Community according to the procedure provided for by the same article are binding for both the EC institutions and the Member States. • As a general rule, int’l agreements properly concluded by the Community prevail over EC secondary law and national provisions; • Once included in the EC legal order, int’l agreements are subject to the judicial control of the Court (art. 220 of the EC Treaty); • The “monist” approach for evaluating the legal effects of int’l agreements: an int’l agreement concluded in conformity with art.300 has legal effect in the EC’s legal order and does not require further acts of implementation, as a regulation or directive (Case 181/73,Haegeman/ État Belge)

4. The Court and the effects of international agreements concluded by the Community in the EC’s legal order • The weaknesses of the monist approach: it cannot help the Court solving the issue of individuals that rely on obligations contained in int’l agreements in order to challenge before national courts the conformity of national laws with EC law (► The Court faced this issued under article 234 of the EC Treaty) • Making use of the concept of « direct effect » (D.E.) by the Court • Meaning of D.E. first with respect to EC Treaty and EC acts: • An EC provision can be invoked before a national court by an individual only if it has a clear, precise, and unconditional meaning. In other words for an EC provision, be it primary or secondary EC law, to have D.E in the EC legal order it must contain a clear, precise, and unconditionalobligation towards individuals or Member States, its content must be enforceable as such by the domestic court, and no further acts of implementation are required. (C-26/92, Van Gend en Loos with respect to a regulation; C-6 and 9/90, Francovich and C- 46 and 48/93, Brasserie du Pêcheur with respect to a directive)

5. The Court and the effects of international agreements concluded by the Community in the EC legal order • Meaning of D.E with respect to int’l agreements: • Clauses provided for by int’l agreements concluded by the Community with their parties can have a D.E. in the EC legal order when they introduce clear, unconditional and not subject to subsequent implementing measures by the Member States (C-104/81, Kupferberg); • « A provision in an agreement concluded by the Community with non-members countries must be regarded as being directly applicable when, regard being had to its wording and the purpose and the nature of the agreement itself, the provision contains a clear and precise obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measure. » (Case 12/86, Demirel). • 2 observations: • The stricter meaning of D.E. in Demirel with respect to int’l agreement vis à vis that adopted in Kupferberg; • Resemblances with article 31 of the Vienna Convention on the Law of Treaties of 1969. The doctrine argues that the ECJ introduced the Vienna Convention in the particular context of the EC’s legal order.

6. The Court & the General Agreement on Tariffs and Trade (GATT 1947) • The rule: the Demirel approach applied to GATT 1947 • Towards individuals: Case C-21/72, International Fruit Company: Import restrictions imposed by the Community on fruits and vegetables inconsistent with art. .XI of GATT • Did the provision of GATT confer rights on individuals of the EC on which they can rely before domestic courts in contesting the validity of a community measure? No. The Court said that on the basis of its spirit, general scheme and terms, GATT 1947 could not confer rights to individuals and hence could not be invoked by them before domestic courts. + The Court relied very much on the principle of negotiations in GATT 1947 and the great flexibility of GATT dispute settlement. • Towards EC member states: Case C-280/93, Germany/Council : two EC regulations concerning the EC bananas regime for which Germany asked the annulment due to their incompatibility with GATT : Again from “the spirit, general scheme and terms of GATT” derived the impossibility for the Court to review EC acts lawfulness in the light of the General Agreement on Tariffs and Trade (GATT)

7. The Court & the General Agreement on Tariffs and Trade (GATT 1947) • No Demirel Approach towards EC institutions: case C-61/94, Commission/Germany • The Court admitted for the first time the possibility for an EC institution to rely on GATT obligations w/out raising the issue of D.E. and hence introduced an exception to its case law, but only in favor of an EC institution. • Court’s ‘U-turn’: Two specific exceptions where the Court admitted for the first time the possibility for individuals to rely on GATT rules: The implementation exception: when Community law expressly refers to GATT law: Leading cases: • Case: C-70/87, Fediol: the applicant requested the Court to annul a Commission decision rejecting a request to initiate a procedure under the Trade Barriers regulation 2641/84. For the Commission the Court was not entitled to review its decision since GATT has no D.E. on the EC’s legal order. The Court found out that “ It does not follow from the fact that various GATT provisions are not capable of conferring on citizens of the Community rights which they can invoke before the courts that those citizens may not, in proceedings before the Court, rely on the provisions of GATT in order to obtain a ruling on whether conduct criticized in a complaint lodged under Article 3 of Regulation No 2641/84 constitutes an illicit commercial practice within the meaning of that regulation . The provisions of GATT form part of the rules of international law to which Article 2(1 ) of that regulation refers, as is borne out by the second recital in conjunction with the fourth recital in its preamble” • More recently, case T-45/06, Reliance Industries/Council (paras.87 -91)

8. The Court & the General Agreement on Tariffs and Trade (GATT 1947) • Case, C- 69/89 Nakajiima:The transposition exception: When Community law transpose GATT law - the Court confirmed its classic approach of non- D.E., i.e. .EU citizens cannot rely on the GATT anti-dumping code (an int’l agreement) as it does not confer rights to individuals. Nonetheless, the Court admitted the possibility to review the EC regulation on anti-dumping in the light of the GATT AD Code. In other words the Court pointed out that when a Community act is enacted to implement specific int’l obligations such as the GATT AD Code its validity can be reviewed in the light of those obligations.

9. The Court and the WTO • Case C-149/96, Portugal/Council: the D.E of WTO agreements in the EC legal order: • In his Opinion, the AG Saggio pointed out that “The WTO has a more balanced and stable structure than that of the organization established under the 1947 Agreement…many provisions of the agreements attached to the agreement establishing the WTO give rise to obligations and prohibitions that are unconditional and include specific undertakings for commitments by the contracting parties in the context of their reciprocal relations.” • The Court did not follow AG Saggio. They applied the InternationalFruit Company jurisprudence + • They attributed again considerable importance to the negotiation procedure among WTO members, some of which where former GATT 1947 members; • They introduced the argument of reciprocity; • They relied on the preamble of Council décision 94/800 concerning the conclusion of the Uruguay negotiations that states that «  by its nature, the Agreement establishing the WTO, including the annexes thereto, is not susceptible to being directly invoked in Community or member State courts».

10. The Court and the WTO • The current position of the Court on D.E. of WTO agreements in the EC legal order: International Fruit Company + Portugal/Councilis the current approach followed by the Court. • C-149/96, Hermés: denial of D.E of the TRIPS agreement in the EC legal order ; • C-377/02, Van Parys : denial of D.E. of the WTO Dispute settlement Understanding (DSU) in the EC’s legal order; • The Court, in particular, recognized the negotiations feature of several DSU provisions (sample: art. 22 of the DSU on Compensation and Suspension of Concessions); • C-121/06 P, FIAMM : • Premise: in 2008, the Court examined whether the EC institutions could be liable in damages caused to individuals, pursuant to art.288 of the EC Treaty, even in the absence of any illegality on their part; • Facts: The US retaliated against the Community following the latter’s failure to comply with a WTO report that found the EC banana regime inconsistent with several WTO rules ► ►

11. The Court and the WTO Outcome: • The EC institutions are NOT liable for damages caused in the absence of illegality on their part when they act in their legislative capacity (Transposition in the EC legal order of the French concept first used by the Conseil d’État in 1938, in La Fleurette Case). • Interestingly, the Court reversed the finding of the Court of First instance that had previously found that the EC institutions could be liable for damages caused to individuals even in the absence of any illegality on their part. • The Court also confirmed the International Fruit Company + Portugal/Council approach: WTO agreements are NOT amongst the int’l rules in the light of which the Court is to review the legality Community law SAUF for the implementation and transposition exceptions (Fediol, Reliance Industries and Nakajiima).

12. Conclusions • The Court is not willing to extend the approach developed in the Haegeman and Kupferberg judgments concerning the status of int’l agreements in the EC legal system to the WTO agreements; • Special regime in the external trade, where judicial review by the Court is limited; • Discrimination b/w different types of int’l agreements is currently in placein the EC legal system; • This discrimination has been extended to other int’l agreements : case C-308/06, Intertanko. Denial of D.E. of UNCLOS in the EC legal order: • The nature and the broad logic of UNCLOS, as disclosed in particular by its a aim, preamble and terms, preclude examination of the validity of Community measures in the light of its provisions” (para 54); …. • “In those circumstances, it must be found that UNCLOS does not establish rules intended to apply directly and immediately to individuals and to confer upon them rights or freedom capable of being relied upon against States..” (para 64 ).

13. Thank you Questions?