EU Common Commercial Policy Research Articles

LEGAL INSTRUMENTS FOR IMPLEMENTING SUSTAINABLE DEVELOPMENT IN THE EUROPEAN UNION AND MERCOSUR’S TRADE AGREEMENT

The subject of the study is the external trade relations of the EU as a subject of international law, concluded with organisations of states and individual countries within the framework of the EU Common Commercial Policy. The aim of the study is to assess the provisions of the EU-Mercosur Agreement made in terms of the choice of legal instruments for the association of the two regions in terms of sustainable socio-economic growth and trade, while ensuring environmental protection and consumer food safety. The essential considerations are preceded by a demonstration of the evolutionary changes in the approach to food safety and environmental protection in the EU’s external trade agreements and Mercosur’s internal regulations. The analysis carried out mandates a number of conclusions relating to the two chapters of the agreement governing food safety of imported food products and environmental protection. The norms as negotiated in the agreement do not implement the objective of sustainable development and should be renegotiated. The exclusion of the precautionary principle only confirms the thesis that has been put forward.

EU Anti-Russian Sanctions in the Sphere of Export Control and Dual-Use Goods Circulation in 2014–2022

The research features the theoretical (legal) and practical aspects of EU’s export control over the dual-use goods circulation as a sanction measure against Russia in 2014–2022. It gives a brief overview of the common EU approach to the dual-use goods export control. The authors focus on the special sanctions regime against Russia in this sphere, i.e., its legal basis, content, development, and implementation. The article introduces a comparative analysis of restrictions in the sphere of dual-use goods circulation before and aſter the tightening of EU sanctions in February-March 2022. The theory is illustrated by several court cases against individuals suspected of violating the sanctions regime. Based on the available EU statistics for 2013–2021, the authors analyzed the impact of the sanctions on cooperation between the EU and Russia in the sphere of dual-use goods export. Restrictive measures in the sphere of export control are a unique case of using Common Foreign and Security Policy (CFSP) instruments in the context of implementing the principles of the EU Common Commercial Policy (CCP).

The Common Commercial Policy after Opinion 2/15: No Simple Way to Make Life Easier for Free Trade Agreements in the EU

On 16 May 2017, the Court of Justice of the EU (CJEU) delivered a long-awaited opinion on the legal nature of the free trade agreement between the EU and Singapore (Opinion 2/15). This decision was highly anticipated as it was expected to clarify uncertainties of several aspects of the EU Common Commercial Policy (CCP) which has broadened in scope after the Lisbon Treaty. The CJEU’s conclusion on the division of competences and its possible impacts on the CCP immediately sparked a debate within the Union’s institutions about its future direction. In particular, the architecture of EU free trade agreements, the dominant tool of the CCP at the beginning of the 21st century, is now under scrutiny. Trade deals without investment provisions could potentially simplify many steps which now burden the treaty-making process. This paper discusses Opinion 2/15 and its significance for the future development of the CCP. It explores and analyses the implications for shaping the post-Lisbon CCP with regard to two specific areas: investment protection and sustainable development. The paper concludes that a new architecture for EU trade agreements could be further improved as there is a potential to preserve the CCP as both an operational and ambitious trade policy. In this respect, comprehensive FTAs encompassing trade, investment and sustainability deserve a second thought in the EU. Keywords: Common Commercial Policy, free trade agreement, competence, investment protection, sustainable development. This work is licensed under the Creative Commons Attribution − Non-Commercial − No Derivatives 4.0 International License. Suggested citation: O Svoboda, ‘The Common Commercial Policy after Opinion 2/15: No Simple Way to Make Life Easier for Free Trade Agreements in the EU’ (2019) 15 CYELP 189.

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’ associated with the threat on behalf of the Wallonian regional government to block the signature of the Comprehensive Economic and Trade Agreement (CETA) in October 2016 has illustrated a number of structural weaknesses of the European Union as an external treaty-maker in the field of EU Common Commercial Policy. These weaknesses concern issues of both democratic representation and the 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 has now been clarified by the CJEU in Opinion 2/15. Against this backdrop, this article examines and discusses the constitutional fundamentals of EU economic treaty-making. The article provides an explanatory account of the division and nature of treaty-making competences in the EU; outlines the distinct modalities and procedures that the conclusion of international treaties as ‘EU-only’ or ‘mixed’ require respectively; discusses the law and practice of the provisional application of international economic treaties by the EU; reviews legal avenues that enable the entry into force of a mixed agreement despite its rejection by an individual Member State; and gives an overview of the relevant CJEU case law and the Court’s conclusions in Opinion 2/15. Normatively, we argue in favour of adjusting the scope of future EU trade and investment agreements to the realm of EU exclusive competences in order 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.

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.

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 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.

Transition of the EU Common Commercial Policy and motive of EU-Korea FTA

Transition of the EU Common Commercial Policy and motive of EU-Korea FTA

Albanian trade policy and the process of alignment with EU Common Commercial Policy

Albania is a member of WTO from September 2000 and is currently in a deep and substantial transformation of the trade policy. Albanian trade regime is very liberal, open and transparent fully compliant with WTO law. Accession to EU is the strategic goal of all Governments after ’90s and alignment with EU acquis is at the core of any process. EU integration is an engine for the development in all candidate or potential candidate countries. This process requires the alignment of national policies and harmonization of the legislation. Trade policy is among the most developed policies in European Union and Albania. This is mainly due to the membership in World Trade Organization (WTO) and Free Trade Agreements (FTA) with the most important trading partners. The accession of Albania to EU will significantly affect the Albanian trade policy. This paper analyses the state of play of Albanian trade policy and presents the main developments in the EU Common Commercial Policy after the Lisbon Treaty (2009). Based on this analysis the paper highlights the implications for Albanian trade policy.

No mixed feelings: The post-Lisbon Common Commercial Policy in Daiichi Sankyo and Commission v. Council (Conditional Access Convention)

Double case note on the scope of the EU's Common Commercial Policy and the future of mixed agreements based on the two ECJ Grand Chamber Judgements Case C-414/11, Daiichi Sankyo Co. Ltd and Sanofi-Aventis Deutschland GmbH v. DEMO Anonimos Viomichaniki kai Emporiki Etairia Farmakon, Judgment of the Court (Grand Chamber) of 18 July 2013, EU:C:2013:520, and Case C-137/12, European Commission v. Council of the European Union (European Convention on the legal protection of services based on, or consisting of, conditional access), Judgment of the Court (Grand Chamber) of 22 October 2013, EU:C:2013:675.

The Concept of 'Union Interest' in EU External Trade Law

The category of ‘Union interest' plays a specific role in EU common commercial policy. Its significance is especially substantial in the field of trade defence instruments. Even though trade defence instruments reflect on international trade distortions, their main objective is to protect European industries and other economic operators against the injurious practices of competitors from third countries, the imposition of restrictive trade measures might not only offer advantages to the affected EU industries, but also disadvantages to other actors in the European Union. Consequently, the Union interest test makes sure the other side of the coin is looked at and the European Union is prevented from imposing trade defence instruments, when the negative impacts on certain interested actors are clearly disproportionate to the positive impacts the trade defence measure might have on the protected EU industries. The current paper is focusing on the nature and character of the ‘Union interest’. The paper starts by defining some basic concepts regarding the EU interests in EU law, examines the nature of ‘Union interest’ in the trade defence procedures, and then attempts to reflect on the new trade enforcement regulation and the EU general trade interests.

LEGAL FOUNDATIONS OF THE COMPETENCE OF THE EUROPEAN UNION ON FOREIGN DIRECT INVESTMENTS

This article provides a summary of the main legal questions pertaining to the current wording of Articles 206 and 207 of the Treaty on the Functioning of the European Union (TFEU), which deal with the inclusion of Foreign Direct Investments (FDI) within the scope of the EU Common Commercial policy (CCP). It firstly investigates the concept of capital movement as enshrined in the treaties and relevant EU legislation. Next, the article examines how the new reference to FDI within the scopes of the CCP affects the competence of the EU to conclude new Bilateral Investment Treaties (BITs) with third countries. Finally, the article briefly illustrates a recent proposal for a model EU BIT which would make certain areas of investment protection dependent on sustainable development, social and environmental protection and standards of Corporate Social Responsibility (CSR).

The concept of ‘Union interest’ in EU external trade law

The category of ‘Union interest’ plays a specific role in EU common commercial policy. Its significance is especially substantial in the field of trade defence instruments. Even though trade defence instruments reflect on international trade distortions, their main objective is to protect European industries and other economic operators against the injurious practices of competitors from third countries, the imposition of restrictive trade measures might not only offer advantages to the affected EU industries, but also disadvantages to other actors in the European Union. Consequently, the Union interest test makes sure the other side of the coin is looked at and the European Union is prevented from imposing trade defence instruments, when the negative impacts on certain interested actors are clearly disproportionate to the positive impacts the trade defence measure might have on the protected EU industries. The current paper is focusing on the nature and character of the ‘Union interest’. The paper starts...

TRADE RELATIONS BETWEEN LITHUANIA AND RUSSIA IN CONTEXT OF INTEGRATION PROCESSES

The aim of the paper is to analyze the influence of integration processes on the formation of current Lithuanian-Russian trade relations and, on the basis of the analysis, to formulate insights on their specific features. The first part of the paper deals with the nature of the EU common commercial policy by stating that within the integration group two categories of international economic relations are formed, i.e. internal and external. Internal relations are based on the principles related to free trade, and external relations seek to protect internal market from the effect of third parties, bigger than allowed by WTO, i.e. protectionism. In other words, the countries of integration group are opposed to third parties outside the boundaries of the group. The second part is focused on the fact that Russia’s attitude to European integration processes of the last two decades is negative. That attitude is expressed by Russia’s strategic choice, i.e. closer cooperation with some older EU states rather than with the whole organization. That condition, together with peculiarities of mutual economic exchanges, determines that major changes in the development of EU- Russian trade relations are not to be expected. The third part of the paper offers some insights on Lithuanian – Russian trade relations. Based on the statistic figures and analysis of political documents, peculiar features of these relations are discussed, i.e. insufficient level of cooperation intensity, vulnerability of the relations and uncertainty of their perspective. DOI: http://dx.doi.org/10.5755/j01.eis.0.8.6848

Characteristics of the FDI legal regime in the EU law

Once the Lisbon Treaty entered into force on 1 January 2009, the regulatory competences over Foreign Direct Investments (FDI) were transferred from the Member States to the European Union. The change was instituted as a result of a new EU Common Commercial Policy (CCP) framework, which was extended by including the legal treatment of foreign direct investment into the CCP regulatory scope. The effect of this development has a dual paradigm: first, the above change affects the existing legal regime of foreign direct investment in the Member States, which is primarily based on the rules of Bilateral Investment Treaties (BITs) concluded by those States; second, the new CCP format calls for a precise regulation of some open questions and issues pertaining to its implementation in the post-Lisbon FDI regulation process by means of secondary legislation of the Union. The second paradigm is reflected in the effort to address the outstanding issues of the concrete implementation of the new CCP framework in the context of division of competences between the EU and the Member States. This effort resulted in issuing the Draft Regulation establishing transitional arrangements for bilateral investment agreements between Member States and third countries. The directions for future development of the FDI regime in the light of the extended CCP framework are also contained in the case law generated by EU judicial bodies.

The regime of international investments within the EC-Chile Association Agreement: towards a possible renegotiation?

This paper aims at analyzing the Association Agreement concluded between the European Community, today European Union, and Chile, as it is believed that it can be, given its articulated regulatory and institutional framework, a good example of how similar treaties, in the field of international investments, can combine the protection of the foreign company’s rights with the promotion and respect of the host-State’s public interests. Besides, in the light of the amendments to the content and scope of the EU Common Commercial Policy made by Treaty of Lisbon, through which the European Union acquires an exclusive competence in the field of FDI, it seems likely that in the future the issue of FDI may fully fall within the scope of the said Association Agreement, excluding, in the relations between Chile and the single EU Member States, the application of the BIT in force. This might encourage the parties to introduce a chapter on the setting up of a dispute settlement mechanism also operating in the relationships between investors and host-States. Such progress, in fact, would be fully in line with the recent practice of Free Trade Agreements concluded by Chile with third countries, which entrust the resolution of conflicts between the foreign company and the host-State to international arbitration bodies.

The Merger of Corporate Social Responsibility into the EU Common Commercial Policy

The present paper explores and critically assesses the incorporation of corporate social responsibility (CSR) into the EU common commercial policy (CCP), as established under the Lisbon Treaty, and its impact on European companies, with specific regard to environmental sustainability. The inquiry builds in particular upon the ‘Resolution on Corporate Social Responsibility in International Trade Agreements’ adopted by the European Parliament on 25 November 2010, and concludes that the prospected EU CCP/CSR policy is extremely rational and progressive, but might fall short of effectiveness within the context of fragmented global law.

The Merger of Corporate Social Responsibility into the EU Common Commercial Policy

The article critically assesses the incorporation of Corporate Social Responsibility (CSR) into the EU Common Commercial Policy (CCP) and its impact on European companies. The enquiry concludes that the prospected EU CCP/CSR policy is extremely rational and progressive but might fall short of effectiveness within the context of fragmented global law.

Taking Stock: EU Common Commercial Policy in the Lisbon Era

The first 16 months of the EU’s common commercial policy (CCP) in the post - Lisbon period provide indicative insights into how the European Parliament, the European Commission and the Council of Ministers interpret their respective roles under the new legal framework introduced by the Lisbon Treaty. This paper analyses the amendments, the institutional capacities to respond to the reform challenges and the evolving institutional balance applying to Lisbon - era common commercial policy. Against this backdrop, the paper gives an overview of the changing dynamics of EU trade and investment policy in a context of enhanced politicization resulting from the European Parliament’s involvement in the decision-making process. Particular importance is given to the question whether enhanced EP involvement in decision - making has the potential to lead to a scenario resembling the policy process in the United States, where congressional responsibility for trade and investment policy has resulted in the capture of the policy agenda by special interest groups and snail - paced policy progress (if any) in recent years. Accordingly, the paper scrutinizes the political preferences that the European Parliament is introducing into current European trade policy debates as well as the framework legislation and trade agreements. Finally, it is argued that parliamentary involvement in making common commercial policy has the potential to narrow the gap between European public political preferences and perceptions, on the one hand, and actual EU trade policies on the other, and to place EU trade and investment policies on a foundation of renewed public political support. In the author’s view, however, it is imperative that such an achievement is based on well - informed, responsible, sustainable and clearly communicated policy proposals from the MEPs, who respond to and seek to balance the multiplicity of interests of CCP stakeholders in European civil society and respect the Union’s international obligations.

Taking Stock: EU Common Commercial Policy in the Lisbon Era

The first 16 months of the EU's common commercial policy (CCP) in the post-Lisbon period provide indicative insights into how the European Parliament, the European Commission and the Council ofMinisters interpret their respective roles under the new legal framework introduced by the Lisbon Treaty. This paper analyses the amendments, the institutional capacities to respond to the reform challenges and the evolving institutional balance applying to Lisbon-era common commercial policy.Against this backdrop, the paper gives an overview of the changing dynamics of EU trade and investment policy in a context of enhanced politicization resulting from the European Parliament's involvement in the decision- making process.Particular importance is given to the question whether enhanced EP involvement in decision-making has the potential to lead to a scenario resembling the policy process in the United States, where congressional responsibility for trade and investment policy has resulted in the capture of the policy agenda by special interest groups and snail-paced policy progress (if any) in recent years.Accordingly, the paper scrutinizes the political preferences that the European Parliament is introducing into current European trade policy debates as well as the framework legislation and trade agreements. Finally, it is argued that parliamentary involvement in making common commercial policy has the potential to narrow the gap between European public political preferences and perceptions, on the one hand, and actual EU trade policies on the other, and to place EU trade and investment policies on a foundation of renewed public political support. In the author's view, however, it is imperative that such an achievement is based on well-informed, responsible, sustainable and clearly communicated policy proposals from the MEPs, who respond to and seek to balance the multiplicity of interests of CCP stakeholders in European civil society and respect the Union's international obligations.