The European Union and the Multilateral Trade Regime

Abstract

This chapter examines the ways in which the European Union (EU) has reacted to panel and Appellate Body Reports of the World Trade Organization (WTO). The rejection of direct effect of WTO law and jurisprudence by the Court of Justice of the European Union (ECJ) left to the EU’s political organs the task of determining the response to give to adverse WTO rulings. We find that reactions can be divided into three types. In many cases, adverse rulings were followed by “mere compliance”: the EU changed its own policies to adapt to the WTO’s rulings. In a few cases, the EU has gone beyond compliance, setting up an internal mechanism to ensure the dynamic adaptation of its measures to determinations made at the WTO level (retaliation) or becoming an enforcer of the ruling vis-a-vis other Members (zeroing). Finally, in two cases the EU’s response was to seek to change the global regulatory regime. In one case examined (hormone-treated beef), this involved circumventing the WTO’s ruling by entering into bilateral agreements with complainants. In the other (agricultural subsidies), the EU went beyond ensuring compliance with the WTO rulings and sought to expand its scope, joining its traditional opponents in agricultural negotiations to seek the elimination of trade-distortive agricultural subsidies.