The External Aspects of the Customs Union

Abstract

This chapter covers two topics: a description of the workings of the common customs tariff (CCT), concentrating on basic principles rather than operational detail, and a general analysis of the Community’s external trade, or common commercial policy (CCP). The CCT is one of the main tools of an external trade policy which is based on the basic principle of uniformity of treatment vis-à-vis third countries, rather than the abolition of barriers and integration of markets. However, the Community is committed to the furtherance of global free trade. Article 18 EC states: ‘The Member States declare their readiness to contribute to the development of international trade and the lowering of barriers to trade by entering into agreements designed, on a basis of reciprocity and mutual advantage, to reduce customs duties below the general level of which they could avail themselves as a result of the establishment of a customs union between them.’ Article 110 EC further links together the customs union, the CCP and the pursuit of free trade: ‘By establishing a customs union between themselves the Member States aim to contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on internal trade and the lowering of customs barriers.’ The common commercial policy shall take into account the favourable effect which the abolition of customs duties between Member States may have on the increase in the competitive strength of undertakings in those States.’ It should be noted that these Articles are phrased in terms of encouragement to action, rather than obligation. They do not create justiciable duties on the part of the Member States as a Community to lower their customs barriers towards third countries, but at the most articulate a duty to negotiate in good faith for the achievement of free trade within organisations such as the GATT where it is largely the Community which negotiates and concludes agreements rather than the Member States. The objective is to ensure that the existence of the customs union does not undermine the GATT system. The policies, as formulated unilaterally by the Community or in negotiation with other countries, are concerned principally with ensuring that external trade conditions do not create distortions of competition between the Member States and thus with preventing external factors from damaging the fabric of integration within the Community. The interpenetration of the Community market and the world market is clearly not the first focus of the CCT or the CCP.