Common Commercial Policy Research Articles

Value promotion and europeanisation by EU trade agreements

Promoting values of the European Union has been on the EU’s external trade agenda since the 1990s. The Treaty of Lisbon established a general framework for values and principles, requiring the Union to pursue these concepts in the whole range of EU external relations, including the Common Commercial Policy (CCP). Therefore, the operation of CCP is governed not only by traderelated concepts such as progressive liberalisation, but it also reflects on non-trade concerns – e.g. protection of human rights, fair trade, or sustainable development – as well. This inclusive character of CCP is anchored also in the new external trade strategy of the European Union (‘Trade for all’), which stresses the importance of trade agreements concluded by EU in promotion of values towards third countries. The paper aims at addressing a conceptual and a procedural question related to this context: First, what kind of values of the European Union integrated in trade agreements can lead to the Europeanisation of domestic legal order of the third countries; and second, how these concepts can be implemented, i.e. how the process of Europeanisation is taking place using the example of the human rights promotion.

The Practical Consequences of the CJEU Judgment of 18 July 2013 Changing Its Doctrine on the Respective Competences of the EU and its Member States to Apply the TRIPS Agreement: Have We Seen the Tip of the Daiichi Iceberg Yet?

In its judgment of 18 July 2013, the Court of Justice of the European Union (“CJEU”) came to the conclusion that after the entry into force of the Lisbon Treaty on 1 December 2009, all the provisions of the TRIPS Agreement fall within the field of the common commercial policy and that, therefore, national courts of Member States are no longer competent to apply and/or interpret them on their own. This was a radical change from the doctrine laid down in its judgments of 14 December 2000 and 11 September 2007, where the CJEU had concluded that in the fields (such as patents) where the EU has not yet legislated, the Member States remained principally competent. This article, by analyzing the practical consequences that such judgment has had on the case law of national courts during the past three years, demonstrates that this bold change of doctrine in fields such as patent law has placed the EU and its Member States in an impossible situation: the institution (EU) that, according to the CJEU, would now be competent is incapable of complying with the obligations of protection introduced by the TRIPS Agreement. This is because the EU does not have a patent office and it has recently decided that it does not want to have one. Furthermore, the institutions (administrative and judicial authorities of Member States) that would be capable of complying with such patent protection obligations would no longer be competent. As a result, this change of doctrine has paradoxically left the EU and its Member States exposed to the risk of being called before the WTO Dispute Settlement Body for failing to comply with such protection obligations (in particular, Art. 70.7 of the TRIPS Agreement).

The Lisbon Treaty and Changes in the Legal Rules on the Common Commercial Policy

Abstract The EU Lisbon Treaty 2007 (LT) brings some changes for the common commercial policy (CCP) and the decision-making processes related to it. CCP is newly included in the one area with all the external activities of the EU, with foreign and security policy, international environmental policy, development aid and economic, financial and technical cooperation with third countries. The fundamental areas of the CCP have been expanded to include foreign direct investment, services and trade-related aspects of intellectual property rights. The EU’s exclusive competence for external negotiation of agreements in areas of exclusive competence and internal CCP regarding their implementation were confirmed. The changes affect the role of the European Parliament and also the functioning of the European Council, the Council, and competences of the High Representative for Foreign Affairs and Security Policy and the European External Action Service. Together with these changes, there will be also changes in procedures within the European Union. A number of aspects of the decision-making process are not yet entirely clarified, and only the practice of the participation of the EU Member States and the European Parliament in the formation of the common commercial policy will bring more meaningful conclusions. The changes brought by the LT will affect not only the extent of the influence of EU Member States on the common commercial policy, but they can also affect the position of the EU in the context of international trade, particularly in the area of negotiating commitments and rules of multilateral and bilateral trade and investment agreements.

Reading Opinion 2/15: Standards of Analysis, the Court's Discretion, and the Legal View of the Advocate General

In Opinion 2/15, the Commission, the European Parliament, the Council, and the Member States litigate whether the Union is exclusively competent to conclude the EU-Singapore Free Trade Agreement (EUSFTA) alone, or whether the EU ought to involve the Member States as independent parties to a ‘mixed’ agreement. The delineation of the material scope of EU Common Commercial Policy following the Lisbon Treaty reform of 2009 is central to this proceeding. The Court’s opinion stands in the tradition of seminal EU external competence litigation, such as Opinion 1/78 and Opinion 1/94. It is widely expected that the Court’s judgment will further clarify the Union’s constitutional identity in the area of EU external economic relations. It therefore has the potential to have profound implications for EU external economic governance. This note reviews the evolution of the Union’s Common Commercial Policy in context of the Court’s past jurisprudence and scrutinizes the relevant standards of analysis, which the Court employs in its competence enquiry. It is argued that the Court retains ample space for discretionary judicial decision-making, which surfaces at the intersection of the competence enquiry and the determination of appropriate legal bases. The clarification and further refinement of the Court’s analytical standards in its judgment and their transparent and consistent application could substantially reduce incentives for future litigation and inter-institutional political combat. The recent quarrels over the signing, provisional application, and conclusion of CETA provide sufficient emphasis to this point. Using the legal view of Advocate General as a benchmark, the paper discusses the practical implications of the Court’s judgment for EU trade and investment treaty-making. Finally, a number of institutional alternatives are proposed that may ‘save’ EU economic treaty-making from ‘mixity’ and the pitfalls of associated procedures in the EU and the member states.

Constitutional Aspects of the EU’s Global Actorness: Increased Exclusivity in Trade and Investment and the Role of the European Parliament

This article argues that ‘exclusive’ competences were instrumental in the development of the EU as a global actor. These competences were particularly helpful in building the EU’s trade and investment policy. The main question raised is to what extent the European Parliament has been able to ensure parliamentary control over these policy areas. It is argued that both new Treaty provisions and Parliament’s own activism have turned the EP into an important actor in relation to control over the Union’s Common Commercial Policy. At the same time, the question is whether the EU’s own constitutional system is sufficient to guarantee the legitimacy of the EU’s external (economic) activities.

Organizacje globalnego zarządzania ekonomicznego w ładzie policentrycznym na przykładzie polityki wobec inwestycji zagranicznych. Wyzwania i inicjatywy w obszarze koordynacji polityki wobec bezpośrednich inwestycji zagranicznych

This paper touches upon the international coordination of policies pursued towards foreign direct investment (FDI). The solutions presented allow us to state that the efforts taken in the international arena in coordinating FDI policies constitute an example of economic order in a polycentric world. The inclusion of direct investment in the EU’s common commercial policy, or of investor-state dispute settlements in the TTIP negotiations, indicate that management of FDI can be a planned, longterm process. Yet, at the same time, such phenomena as the economic and financial crisis of 2008, or the unprecedented dynamics and scale of the expansion of Chinese businesses show that global economic governance in this field must swiftly adapt to changing circumstances. Designing, developing and coordinating activities in the field of investment policy, which is a manifestation of global economic management, is conditioned by long-term strategies and trends, as well as adapting to emerging challenges.

The Impacts of Common Commercial Policy on Export Performances of Visegrad Countries

The paper aims to investigate the impact of Regional Trade Agreements (RTAs) and common commercial policy (CCP) on export performances of Visegrad group of countries (The Visegrad Four, V-4: Poland, the Czech Republic, Slovakia, Hungary) preceding and following the EU accession. The V-4, before becoming the EU members, have participated actively in regionalism, signing free trade agreements and customs unions which often also resulted in the extended economic integration. But since the EU accession in 2004, all RTAs of the new members were no longer valid as these countries became the parties of the CCP of the EU. To analyse whether CCP was beneficial on the export performances of the V-4 countries, we estimate the augmented gravity model by employing Poisson pseudo-maximum-likelihood (PPML) estimator for time periods before and after the EU accession, in 1999-2003 and 2004-2013, respectively.

It Takes Two to Tango: Regional Investment Treaties and Investor Protection on Both Sides of the Atlantic

In 2009, the Treaty of Lisbon conferred the European Union the exclusive competence on foreign direct investments in Art. 207 TFEU. Together with the common commercial policy, it is now one of the main pillars of the external action of the EU. The Union has seen this new competence as good opportunity to carry out a comprehensive regulation of trade and investment issues at the European level and has applied it in the negotiation of a series of investment agreements with other States such as Canada, the United States, Vietnam, and Singapore. An intense public debate has arisen on the opportunity of entering into these agreements and whether they should include references to arbitration as an investor-state dispute settlement mechanism (ISDS). The context to this is the growing opposition to the traditional mechanisms of ISDS in some Member States and sectors of the civil society. Meanwhile, in the US, there has also been growing public opinion opposing investment treaties and external and parallel mechanisms of investor protection from both sides of the political spectrum and for various reasons. Prior to the 2016 Presidential Elections, prominent democrats opposed the Trans-Pacific Partnership (TPP) as long as ISDS mechanisms were included. The present article includes an analysis of trade policymaking in the US and the attitude of the US Congress to new mega-regionals and new investment treaties. Being a major issue in Europe, it focuses, in particular, on the policy position concerning ISDS as the method of choice for resolving disputes between investors and the host countries.

The Common Commercial Policy, Parliamentary Participation and the Singapore Opinion of the CJEU

The Common Commercial Policy, Parliamentary Participation and the Singapore Opinion of the CJEU

Pregled Evroazijske ekonomske unije i njenog odnosa sa Srbijom

In addition to the European Union, other regional integration projects have arisen in different parts of the world. One prominent example of this is the Eurasian Economic Union (EAEU), which seeks to reintegrate the former Soviet space. It includes among its members Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. To a certain extent the EAEU draws inspiration from the European Union, seeing it as model it can emulate and from which it can learn, where appropriate. The EAEU is open to new members and also seeks partners, including in Europe. An example of this is Serbia, which has expressed interest in signing a free trade agreement with EAEU. From a purely legal point of view, this may be possible, as it is not prohibited by Serbia's SAA. However, such a development may also have its problematic aspects, which includes Serbia's obligations if it becomes a fully-fledged member of the European Union and the nature of the Common Commercial Policy (CCP).

Wspólna Polityka Handlowa Unii Europejskiej i jej znaczenie dla handlu światowego. Studium przypadku Transatlantyckiego Partnerstwa w dziedzinie Handlu i Inwestycji

The main aim of the paper involves evaluation of significance of the Common Commercial Policy (CCP) for the EU and understanding of its role in the global perspective. Transatlantic Trade and Investment Partnership (TTIP) bargaining is analysed through the prism of the CCP’s formation history, objectives, achievements and unresolved issues. An important result of the research is the conclusion that European’s/EU’s attempts to provide depoliticized common trade policy collide with its objectives of values’ exporting. Commitment to preferential treatment of developing and least developed countries creates a field of instability and endangerment of a double standards. Current EU-U.S. Free Trade Agreement talks remain a particular case that reveal gaps, but also achievements of the CCP and its role in the global trade. TTIP negotiations are a milestone in a process of the global trade standards elaboration. If exhausting bureaucratic bargaining looks uncomfortable for the U.S. ’realpolitik, it perfectly suits to the CCP which was creating the same way.

Legal Aspects of the Implementation of European Union’s Common Commercial Policy: Lithuanian Experience and Practice

AbstractThe Common Commercial Policy is the essential basis of the European Union (hereinafter - the EU), which, in particular, is a free trade area between the 28 Member States with a common external customs tariff and a common foreign trade policy as well as common trade rules with the third countries. Implementation of this policy is characterized by the fact that it is based on an exclusive competence of the EU, which after the Treaty of Lisbon (2009) became even more apparent. Therefore the countries of the EU should follow the same legal principles and rules in the regulation of their foreign trade, that is to apply the uniform EU rules on the calculation of customs duties and determination of the customs origin of goods, customs valuation and tariff classification of goods (Common Customs Tariff). However, implementation of these provisions is always experiencing stress due to the different interests of the EU Member States and the different national practices, especially when the administration of customs duties is actually implemented only at the level of individual EU Member States. Therefore the aim of the article is to assess the implementation of the EU’s CCP from the perspective of the EU Member State (Lithuania) and to describe existing discrepancies which may serve as an obstacle for the development of common regulatory regime for import customs duties in the EU or hinder its main economic goals in international trade. Analysis of relevant scientific problems is mainly based on the comparative method (comparison of the practice of the national courts in the Republic of Lithuania and the Court of Justice of the European Union in disputes related to the functioning of the EU's customs union) and generalization of professional experience (national and EU judicial practice). The research leads to the conclusion that a uniform implementation of Common Commercial Policy and the Common Customs Tariff, as its main element, is not fully ensured on the practical level from the perspective of certain Member States (i.e. Lithuania).

The Human Rights Aspect of the Common Commercial Policy in the History of the Integration of the European Union

The Human Rights Aspect of the Common Commercial Policy in the History of the Integration of the European Union

Practical Problems of Legal Regulation of Customs Duties Developing an International Trade Between the Republic of Lithuania And East Asian Countries

Abstract For more than ten years (since 2004) the Republic of Lithuania is a member of the EU and is realizing its economic and trade relations with other foreign countries, and regulating customs duties according to the requirements of the EU Common Commercial Policy. However, in the recent years foreign trade (in particular - exports of goods) remained one of the main factors which increased an economic growth (recovery) in the Republic of Lithuania after the global economic crisis of the world, which began in 2008. In this context, the search for new markets and expansion of trade relations with new trade partners in Asia became essential in order to diversify the structure of the national economy and avoid dependence on traditional trade partners, such as Russia. Taking into account this strategic goal, the article seeks to answer a question whether an existing foreign trade regulation system ensures the status of Lithuania as an attractive partner of foreign trade with East Asian countries (Taiwan, Hong Kong, South Korea and Singapore) and what regulatory instruments (customs duty rules and procedures) should be used on the national level to ensure cooperation with these countries. In order to answer this problematic question, the first chapter of the article overviews general tendencies in Lithuanian foreign trade with the countries of East Asia, while the second chapter is dedicated to describe regulatory regime for import customs duties on the national level (in line with the major provisions of the EU Common Commercial Policy). The practical problems and obstacles to international trade are presented in the third chapter and are illustrated by the examples of case law, which was formed in disputes relating to the decisions and actions of Lithuanian national customs authorities for the period from 1 May, 2004 (since entry to the EU)).

The Limitations of the Common Commercial Policy as an Exclusive Competence of the European Union

The Limitations of the Common Commercial Policy as an Exclusive Competence of the European Union

The Signing, Provisional Application, and Conclusion of Trade and Investment Agreements in the EU. The Case of CETA and Opinion 2/15

The ‘Wallonian Saga’ has illustrated a number of structural weaknesses of the European Union as an external treaty-maker in the field of EU Common Commercial Policy that concern issues of both democratic representation and effectiveness of EU multilevel governance. The legal question of competence that determines the Union’s power to conclude external commercial treaties by itself or, in the alternative, jointly with the member states will be clarified by the CJEU in its forthcoming judgement in Opinion 2/15. We provide an overview of the relevant CJEU case law and the main issues that arose during the Court’s hearing in the Opinion 2/15 procedures; discuss the law and practice of the provisional application of international treaties by the EU and legal avenues that enable the entry into force of a mixed agreement despite its rejection by an individual member state. We argue in favour of adjusting the scope of future EU trade and investment agreements to the realm of EU exclusive competences as clarified by the CJEU to remedy the functional deficiencies of EU treaty-making that were exposed in the ‘CETA-drama’. At the same time, we emphasize the need for – and outline a path towards – a qualitative change in EU and member state institutional practice that fully employs the channels of vertical political participation in the Union’s multilevel governance structures so as to strengthen the legitimacy of EU economic treaty-making.

The EU-Singapore Free Trade Agreement: A Landmark Deal?

In 2006, the Commission published its Global Europe Communication and marked a change from a multilateral to a bilateral trade strategy. Part of the agenda of this new strategy was to strengthen the bilateral trade relations with key Asian states. Initially, the objective was to conclude a region- to-region agreement with ASEAN, which unfortunately did not succeed. Following the suspension of talks, the Council in December 2009 gave the green light to initiate bilateral FTA negotiations with individual ASEAN countries, whilst preserving the strategic objective of a regional FTA. Negotiations for an FTA between the EU and Singapore were launched in 2010 and completed in October 2014. It is the EU’s first FTA with an ASEAN Member State and the second one with a major Asian trading partner. Thus, this agreement paves the way for future FTAs with countries in the region. In the meantime, new negotiations were opened with five other ASEAN states. This paper uses an adapted version of Robert Putnam’s two-level game theory. The approach analyses crucial interactions occurring during a negotiation between the international (Level I) and domestic level (Level II). The EU increases the complexity of these entanglements, since the Level II is composed of a second two-level game between the EU institutions and the Member States (Level III), transforming Putnam’s theory into a three-level games approach. The convergence of the different interests at each level form the “win-set” within which any agreement reached at Level I will be acceptable for Level II and III constituencies. This essay examines the motivations and interests at stake in the negotiations of the EUSFTA including the win-sets of each partner (II.), the ratification process and thereto current deadlock (III.). The final objective is to figure out to which extent the EUSFTA is a model for new FTAs with ASEAN countries, with ASEAN itself and how it may shape the whole European Common Commercial Policy.

TTIP and legislative‒executive relations in EU trade policy

This paper analyses Transatlantic Trade and Investment Partnership (TTIP) negotiations in order to assess how the move towards tighter economic integration within the EU‒US strategic partnership impacts on legislative‒executive relations in EU trade policy. The analysis examines the institutional, substantive and party political dimensions of national parliaments’ scrutiny of the Common Commercial Policy. Based on insights into both domestic and EU channels of parliamentary monitoring of TTIP negotiations, the paper argues that, although the government remains the central object of democratic control, the involvement of national parliaments in transatlantic trade extends to encompass the EU’s own transatlantic and trade policies. This is rooted in the legislatures’ legal capacity to constrain the executive in the negotiation, conclusion and, where applicable, ratification phases of EU trade agreements. It is argued that national parliamentary influence takes the shape of politicisation of the legitimacy of the expected policy outcomes of these agreements.

Situating the Transatlantic Trade and Investment Partnership (negotiations) in European Union Common Commercial Policy

The Transatlantic Trade and Investment Partnership (TTIP) negotiations can be distinguished from previous trade negotiations in terms of substance and process. The adoption of the mandate and the ongoing negotiations have taken place in the significantly reformed structure of the European Union (EU)’s Common Commercial Policy after the Lisbon Treaty’s entry into force. Efforts at closer economic integration between the world’s two biggest trading blocs has developed as the EU’s focus shifts from the multilateral trade system toward bilateralism and regionalism, and a new generation of trade agreements emerges. The envisaged TTIP expands the coverage of the agreement to an unprecedented array of commercial relations. Including new issues, such as regulatory cooperation and investment, have impacted the process of negotiations and enhanced its transparency with the involvement of various stakeholders. TTIP as an arrangement may shape the content of the Common Commercial Policy: much of what is achieved could potentially be introduced in other trade negotiations.

New Ways of Dispute Resolution in Investment Protection Cases

The European Union, post-Lisbon, rose as a powerful new player in the field of treaty making when ‘Foreign Direct Investment’ in a shift from previous member state competence was included in exclusive EU competence as part of the common commercial policy (Article 207(1) TFEU). Those who expected that the European Union's appearance in the international arena would also radically alter the existing regime of dispute resolution apparently proved to be right. At least this is what transpires from the texts of the most recent free trade agreements to be entered into by the EU with Canada and the United States respectively, which envisage the set-up of a two-tier semi-permanent body for the resolution of disputes arising under the agreements. This novel dispute resolution system, which marks a clear break from the traditional investor-state dispute settlement mechanisms relying on treaty-based arbitration, understandably stands in the crossfire of heated professional debate and public attention. This is all the more so understandable when the European Commission shows the commitment to move towards establishing a permanent multilateral with an even wider-scale impact. This paper aims at presenting an in-depth analysis of the envisaged investment court system while examining, in contrast, the traits, shortcomings and legitimacy of traditional dispute settlement mechanisms applied in protection cases.