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The European Union’s law on Common Commercial Policy

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

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The European Union’s law on Common Commercial Policy

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  1. The EuropeanUnion’s law on Common Commercial Policy For BBA, 2019 semester Łukasz Stępkowski

  2. 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 frameddirectly in the Treaties, so this is not an „implied” power • Article 3(1)(e) of the Treaty on the Functioning of the European Union providesthat „The Union shall have exclusive competence in the following areas (…) e) commoncommercial policy” • Thosegeneralprovisionsshould be readtogether with the specificTreatyprovisions on the EU’sCommon Commercial Policy (CCP)

  3. The general idea for the CCP isfoundunder 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 isconsidered to be a part of the EU’s „externalaction” powers, in thatitis not gearedtowards the MemberStates, but rather non-memberstate third countries • As itis a subset of the EU’sexternalaction, the CCP issubject to generalrules on EU externalaction (ieTitle V, Chapter I TEU : Articles 21-22). • https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:12016M/TXT • Therearespecificrules 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

  4. Specificprovisions on the CCP arefoundunderArticles 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, thisprovisionis not meant to introduce a rulethat third countriesmayinvokeagainst the Union • itisalsogeneralenough not to createanyrights for individuals (esp. individuals from third countries; see Geiger/Khan/Kotzur, EU Treaties – Commentary, Munich 2015, p. 755) • It does, however, illustrativelyrefer to the areassubject to CCP : international trade (as far as public law isconcerned), customs and otherbarriers, and restrictions on trade and foreigndirect investment • The FDI part isnewer and in place since the Treaty of Lisbon’samendments

  5. Further, the CCP isgoverned 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”. • Thereissecondary law on the CCP, includingsecondary law adoptedunder the ordinarylegislativeprocedure (207(2) TFEU) • In addition, Article 207(1) TFEU is open-ended; the list of areasisillustrative • Geiger/Khan/Kotzur et al addthatwhile the list isillustrative, theremay be exceptionsthatwouldotherwisefallwithinArticle 207 TFEU (eg. Transport, p.759)

  6. The CCP includesenteringintointernationalagreements with third countries • To that end, therearespecificrulesunderArticle 207(3) TFEU thatsupplementArticle 218 TFEU (the latteris the generalprovision on EU’sconclusion of internationalagreements) • In particular, thereis no room for the High Representativeatall • Thereis a specialcomitteewhichmonitors the Commission’sconduct, in addition to the Council • OutsideArticle 207 TFEU, Article 218 TFEU applies (and e.g. itis the Councilwhichgenerallyconcludesinternationalagreements on part of the Union, unlessthereis a delegation)

  7. Therearespecialrules on voting in the Council as regards the CCP • Generally, the Councilvotes by way of a qualifiedmajority • 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.

  8. Articles 206-207 TFEU do not refer to anindividual and lackdirecteffect; thisisleft to secondary law • As anexample, thereis 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”) whichhasdirecteffect • ThisRegulationsetsup a procedurewithinwhichanindividualmaypetition the Commission to engage in international trade disputes • https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1552308264369&uri=CELEX:32015R1843

  9. Thereisneither a closeddefinition nor anexhaustive list of trade measureswhichmay be undertaken by the Union in response to the developments in international trade • However, the illustrativeexamplesare: • General changes in tariffrates • Non-tariff trade restrictions • Quotas • Prohibitions of trade • Licences • Import and export surveillance • Special import/export regimes (egculturalgoods) • Anti-dumping duties • Countervailingduties

  10. Dumping and what to do with it • The practice of dumping amounts to exporting a productinto the Union, whereexport 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, thisleads to injury on part of the Union’sundertakings, whothenmay not sell a comparableproduct for profit • As such, the Commissionisauthorized to conductanti-dumping proceedingswithin the Union and imposeanti-dumping measures • https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1552311978270&uri=CELEX:02016R1036-20180608

  11. Countervailingduties • Thesemeasuresareusedwheretherearesubsidisedimportsinto the Union • As itis the case with anti-dumping, thereis a procedure for the Commission to employ, modelledafter the WTO’s Agreement on Subsidies and CountervailingDuties • https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1552311979196&uri=CELEX:02016R1037-20180608 • However, whilemodelledafter the Agreement, the Commissionmay order provisionalcountervailingduties and thereis, to anextent, retroactivity

  12. The CCP issubject to – as aregreatmanythings, both big and small – to the case law of the Court of Justice of the EU • In particular, giventhatthisis a field of EU externalaction, the Court isrelativelyoftenasked to giveopinions on proposedinternationalagreements, pursuant to Article 218(11) TFEU • Opinion no 2/2015 : https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1552313054671&uri=CELEX:62015CV0002(01) EU/Singapore FTA

  13. Thankyou for yourattention

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