EU Free Trade Research Articles

The Registration of Descriptive Terms in International Trade

This contribution aims at showing how the registration of descriptive and generic terms as trade marks or geographical indications creates barriers to legitimate trade. This problem is particularly relevant in the EU, where the registration of foreign language terms as trade marks is allowed, even where these terms are descriptive of the goods or services for which they are registered. The Court of Justice of the European Union has ruled in its Matratzen judgment in 2006 that as long as the average consumer in the country of registration does not understand the meaning of the term, it is not descriptive and therefore can fulfill the distinctiveness function. I argue that trade marks on foreign terms do not comply with the protective function of trade mark law, which is to avoid the monopolization of terms that other competitors may want to use, and hence create barriers to legitimate trade. Similarly, for the area of geographical indications (GIs), the regime for GI protection included in recent EU free trade agreements seeks to protect terms in third countries that are considered generic in those countries. Traders in third countries will then not anymore be able to use the term referring to the type of product they have been using for years or decades to describe such products, which arguably creates barriers to legitimate trade. Third countries and their traders are well advised to make use of the exceptions to the protection of generic terms, which are included in the specific agreements.

Towards a Sustainable World Trade Law? The Commercial Policy of the European Union After Opinion 2/15 CJEU

Opinion 2/15 provides an undisputable exclusive competence to the EU for the inclusion of labour and environmental standards in EU Free Trade Agreements (FTAs). However, most of the possible policies to include sustainable development in world trade law would affect trade clauses of FTAs and World Trade Organization law for which the exclusive competence of the EU was not in doubt (e.g. free movement of goods and services, intellectual property). Accordingly, a holistic approach of the EU considering sustainability issues when negotiating any aspects of international trade treaties is required if sustainable development is to play a role in the future of world trade law. The article highlights potential consequences of Opinion 2/15 for the trade policy of the European Union in three areas: sustainable development clauses, trade negotiations and the participation of the EU in the WTO.

Dispute Settlement for Labour Provisions in EU Free Trade Agreements: Rethinking Current Approaches

While labour provisions have been inserted in a number of EU free trade agreements (FTAs), extant clauses are widely perceived as ineffective. This article argues that there is a need to rethink the dispute settlement mechanisms related to labour provisions if their effectiveness is to be increased. It proceeds in three steps. First, we look at the current state of the art of labour provisions in EU FTAs in terms of legal design and practice and argue that the current arrangements are ill-equipped to foster compliance with labour standards. Second, we explore avenues to enhance the design of FTA labour provisions by reconsidering basic elements of the dispute settlement structure. Examining US FTA labour provisions, we highlight the importance of a formal complaint mechanism, on the one hand, and the availability of economic sanctions, on the other. Based on a review of existing practice, we contend, however, that these elements alone are not sufficient to effectively enforce FTA labour provisions. We argue that for FTA labour provisions to be effective, the current state-to-state model of dispute settlement needs to be complemented by a third-party-state dimension and that, additionally, there are good reasons to consider a third party–third party dispute settlement component. We ground these reflections in experiences with already existing instruments in other areas, namely investor-state dispute settlement and voluntary sustainability standards. Thirdly, we discuss options to better connect the dispute settlement mechanisms of FTA labour provisions to other international instruments for labour standards protection with a view to creating synergies and avoiding fragmentation between the different regimes. The focus here is on the International Labour Organization’s supervisory mechanism and the framework of the OECD Guidelines for Multinational Enterprises.

Is the Supreme and Constitutional Courts’ Rebellion Against EU Law a Threat for the Lack of Direct Effect of the New Generation EU Free Trade Agreements?

This article presents the current perspective on the roles of Constitutional Courts of the EU Member States in the future implementation of the new generation Free Trade Agreements (FTAs)_, particularly concerning the application of the ‘counter-limits doctrine’. According to such doctrine, whenever national law amounts to a breach of EU law, the judge shall apply European Union law. However, if and when provisions of EU law would infringe on basic fundamental rights protected by the Constitution, then the Constitutional Court would declare the primacy of domestic law to protect the citizen’s fundamental rights. The present article discusses the current trend in the judicial rebellion pending in the EU against the Court of Justice of the European Union (CJEU) and argues that it should be tackled by the European Commission in a firm and strong manner, as the above situation adversely impacts also the everyday application of the new generation of FTAs by the EU.

Implementation of EU Free Trade Agreements

The EU has a very active trade negotiating agenda, with new negotiations starting every year and being in preparation. Increasing number of free trade agreements (FTAs) are also being concluded. Against this background, and the fact that trade policy is attracting much more attention from the public that used to be the case still a few years back, effective implementation of EU trade agreements has become an important priority for the EU Trade policy. The EU needs to demonstrate that its trade agreements work in practice and deliver the negotiated benefits to EU operators. The EU FTAs currently in force are not identical in their scope and objectives, and this has to be taken into account also when looking into their implementation. EU FTAs can be divided in different groups on the basis of their scope and objectives. Since 2006 the Commission has been negotiating comprehensive FTAs which cover a wide range of areas including also inter alia services, investment, procurement, intellectual property rights, competition and trade and sustainable development. When speaking about FTAs, normally the main point of interest is to know whether the FTAs have led to an increase of trade flows between the partners in the areas of trade in goods, services and investment. In general it can be said that in large majority of cases, the trade in goods has increased during the period than the FTAs have been in force. In terms of services and investment, it is more difficult to see the link with the FTAs in developments in these areas. Preference utilization rates (PURs) of the EU FTAs have attracted a lot of attention since the Commission started producing them after the EU–Korea FTA started to be applied. In general, the PURs for EU operators are lower than those of our trading partners. New generation FTAs have a comprehensive structure of implementation bodies. A number of subcommittees and working groups covering different areas covered by the chapters of the FTA meet annually to address problematic issues. Sanitary and phytosanitary measures, restrictions in trade of agricultural products, enforcement of geographical indicators and public procurement have been areas most often discussed in these fora. Lack of awareness of the FTAs by EU companies and difficulties in understanding them is still a real issue preventing FTAs reaching their full potential. This has led the Commission to intensify its efforts to address better the awareness gap. In addition to the Commission, Member States and their business organizations have also a crucial role in disseminating information on FTAs to their stakeholders, in particular small and medium sized enterprise (SMEs), who often require information in a local language and locally in different regions. Close cooperation between Member States’ embassies and the EU delegations in the FTA partner countries has also been identified as a key factor to ensure effective implementation of the FTAs.

The Social Dimension in EU Free Trade Agreements: ASEAN Perspectives

This article analyses the positions of ASEAN countries on provisions of environmental and social sustainability included in the EU free trade agreements (FTA). In the EU’s new generation FTAs with ASEAN countries, there has been a notable and systematic EU approach of linking international labour conventions and multilateral environmental agreements (MEAs) in its trade agreements, which reflects its ambition to play a significant role in ‘harnessing globalization’. However, during trade negotiations, contradictory positions between two sides originate from their different political, socio-economic and cultural backgrounds. When considering the developing countries’ objections to the issue from an ASEAN perspective, three main decisive points can be identified: the exclusive reliance on economic cost-related arguments, different perceptions of the trade-labour/environment nexus, and political and cultural-relativist arguments. Practical findings show that the EU faces resistance to this linkage from the ASEAN countries, which weakens its ability to promote universal social norms through trade.

Realization of the potential of the Ukraine–EU free trade area in agriculture

Realization of the potential of the Ukraine–EU free trade area in agriculture

Environmental Dispute Settlement Mechanisms in EU Free Trade Agreements

Environmental Dispute Settlement Mechanisms in EU Free Trade Agreements

EU Constitutional Law as Restraint for EU Trade and Investment Agreements: The Example of CETA and Investor-State Dispute Settlement

The civil society protests against EU free trade agreements (FTAS) and investment arbitration reflect the failure of EU institutions to take “decisions as openly as possible and as closely as possible to the citizen” (Article 1 TEU) and to protect the rights of citizens also in external market regulations (Articles 3, 21 TEU). The less EU institutions comply with the legal requirements (e.g. in Articles 2, 9–12 TEU) of protecting constitutional, representative, participatory and deliberate democracy also in external market regulations, the less parliamentary approval of secretly negotiated FTAS guarantees democratic legitimacy and consistency of FTAS with EU constitutional law. Fundamental rights limit all EU governance powers, including trade and investment policy powers of the EU. The disregard for fundamental rights and judicial remedies of citizens in FTAS concluded by the EU with third countries is neither necessary nor justifiable in terms of Article 52 of the EU Charter of Fundamental Rights. Transatlantic FTAS on multilevel market regulation and protection of public goods should be designed as ‘democratic law’, which citizens are entitled to invoke and enforce in domestic jurisdictions as integral parts of EU law.

EU Citizenship as a Constitutional Restraint on the EU's Multilevel Governance of Public Goods

This contribution suggests a ‘republican interpretation’ of EU citizenship rights based on the following three propositions: First, the more globalization transforms national into transnational public goods (PGs), the more democratic and republican constitutionalism require designing and implementing transnational ‘PGs treaties’ as ‘democratic law’ empowering citizens to invoke and enforce precise and unconditional, multilevel market regulations and protection of PGs vis-a-vis multilevel governance institutions. Second, as EU law (e.g. Articles 2, 9-12 TEU) requires EU institutions and member states to protect constitutional, representative, participatory and deliberative democracy and limits all internal and external EU powers by fundamental rights and protection of PGs (res publica), EU citizens rightly challenge EU trade, investment and other treaties that privilege interest groups and undermine the ‘constitutional contract’ of citizens as codified in the EU Charter of Fundamental Rights (EUCFR). Third, just as common market and competition law inside and beyond the EU protects citizen-driven ‘network governance’ and rights-based 'vigilance' of EU citizens embedded into comprehensive protection of fundamental rights and a ‘social market economy’ (Article 3 TEU), EU institutions should respond to the legitimacy- and rule-of-law-crises in other areas of EU governance by ‘re-connecting’ EU law with EU citizens as ‘democratic principals’ of multilevel governance agents. 'Anti-citizen clauses' in EU free trade agreements (FTAs) with non-European countries (like Article 30.6 CETA) and discriminatory 'arbitration privileges' for foreign investors illustrate ‘authoritarian dis-connect’ of EU bureaucrats from EU citizens; they risk undermining rule of law, constitutional democracy, and the ‘social market economy’ inside the EU.

Brexit and India–EU Free Trade Agreement

India and the European Union are in the negotiation process for a Free Trade Agreement. However, as the result of a vote on June 23, 2016, the United Kingdom decided to exit from the European Union, i.e., Brexit. Consequently, bilateral trade costs between the United Kingdom and the European Union will increase both from the newly applicable tariff and non-tariff barriers, which will have a direct impact on trade flows between these two trading partners and an indirect impact on their income growth and on their trading partners. The United Kingdom has been is the most important trading partner for India in the EU, thus the trade deal would not be as beneficial for India as it would have been were the United Kingdom still a member of the European Union. This study attempts to analyze the effects of trade liberalization on the bilateral trade structure between India and the European Union, and the welfare effects both considering the United Kingdom as a member of the European Union and the situation when the United Kingdom exits the European Union. The study found that when United Kingdom is a member of the European Union, both India and the European Union gain more than the situation when the United Kingdom exits the European Union; due to Brexit, India would experience the decline of GDP growth rate from 1.1 to 0.5 percent while the European Union, from 0.1 to -0.5 percent.

Participatory Aspects of Investor-State Dispute Settlement in the EU New Wavee Trade Agreements

This article will scrutinize the anatomy of the new EU Free Trade Agreements, in particular their chapters on the protection of foreign investment, from a transparency perspective. The article will put to test the claims that the dispute settlement mechanisms in the new wave treaties are sufficiently participatory and, in fact, are recognizably more transparent than their predecessors. Specific procedural standards related to confidentiality and privacy of proceedings shall be analyzed in the context of the push for transparency in investment arbitration, observable in recent years. Besides procedural guarantees of transparency, the article will also examine relevant substantive rules, directly affecting participatory aspect of dispute settlement (such as adopted definitions of investor, which determine the scope of actors who might become parties to the dispute). Furthermore, the paper will discuss the possible impact of an establishment of an investment court onto forum shopping strategies of the parties in the field of investment-related disputes, including internal forum shopping, as well as parallel proceedings utilizing different procedural mechanisms. In this context, lessons from other fields (in particular international commercial arbitration), related to procedural standards of transparency in cases in which public interest is present, will be highlighted. A recurring proposal of establishment of a global permanent appellate court for investment and commercial arbitration (to review awards in cases in which public interest is involved) will also be invoked.

Gambling Regulation in Slovenia: From Adapting to Socialist Morality up to EU Free Trade Environment

Slovenian regions have gone through different phases of gaming regulation. The article thus discusses historical development of gambling regulation on the territory of the Republic of Slovenia, when it was a part of the Austro-Hungarian Empire through being a part of the socialist federation of Yugoslavia and finally as an independent state. Nevertheless, since the country joined EU it must adapt its gambling regulation to the EU internal market principles as interpreted by the EU Court of Justice, which poses significant challenges for the Slovenian authorities working in the field of gambling regulation.

Heterogeneity of community-based voluntary, counselling and testing services for HIV in Europe: the HIV-COBATEST survey.

This study reports the first EU-wide survey of community-based voluntary counselling and testing services (CBVCTs), with the following aims: to assess the current availability of CBVCTs and how the concept of CBVCT is understood; to describe CBVCT modalities and strategies; and to measure the use of rapid tests within CBVCTs. A cross-sectional survey was conducted in two different key informant groups: HIV/AIDS National Focal Points (NFPs) and CBVCTs from the EU and European Free Trade Association (EFTA) countries. A definition of CBVCTs was reached. Descriptive and correspondence analyses were performed. The COBATEST survey was answered by NFPs from 25 of the 32 EU/EFTA countries (response rate of 78.1%), and by 55 CBVCTs in 22 different countries. CBVCTs were functioning in nearly all the responding countries, but only 56% explicitly included them in their national strategic plans. In those that had CBVCTs, the NFPs often lacked reliable information on CBVCTs. In general, CBVCTs in Europe are focused mainly on men who have sex with men, are primarily peer-driven and highly communitarised, whereas CBVCTs targeting other at-risk populations are more medicalised. In addition, the oral test is under-used and in general test performance is highly medicalised. Results show that there is a wide heterogeneity of CBVCTs in Europe, which is varied and highly medicalised. The data provided in this study in conjunction with other deliverables produced by the COBATEST project should contribute to the development of standardised indicators to enable comparisons over time and eventually improve the effectiveness of CBVCTs across Europe.

Brexit: Breaking Away – Would it Pay?

SummaryIn the event of a Brexit the UK would have to redefine its trade relationship with the EU and develop its own agricultural policy. We analyse the impacts of a UK–EU Free Trade Arrangement (FTA); a WTO MFN tariff rates scenario; and a UK Trade Liberalisation scenario (UK TL). In each scenario the effects of three different levels of direct payments to farmers are estimated: current levels, 50 per cent reduction and no direct payments. In the FTA and WTO scenarios, UK prices for agricultural products would increase due to the higher trade facilitation costs and the UK's loss of access to EU preferential import regimes, with positive impacts on producers but negative on consumers or users. In the UK TL scenario, prices for animal products tend to decline, while crop prices show an increase relative to the status quo. The effects on farm incomes reflect these changes in prices but incomes ultimately are strongly dependent on choice of agricultural policy with regard to direct payments. Full abolition of direct payments generally more than offsets the positive effects of output price increases on farm incomes. Direct payments of 50 per cent of current levels have more diverse impacts on farm incomes.

ЗОВНІШНЬОТОРГОВЕЛЬНА ДІЯЛЬНІСТЬ УКРАЇНИ В РАМКАХ ПІДПИСАННЯ «ЗВТ+» З КРАЇНАМИ ЄС ТА ЗВТ СНД

This article deals with the prospects, possible risks and threats of deep and comprehensive free trade area («FTA+») between Ukraine and the EU. Features of foreign economic activity of Ukraine within the framework of FTA with the CIS are also considered in the article. A detailed analysis of the foreign trade statement and regional pattern of exports and imports of Ukraine is presented for the last few years. The key difference between «FTA+» with the EU and classic free trade areas is determined. Risks of the external economic collaboration of Ukraine with the European countries are described after intensifying of the conflict between Ukraine and Russian Federation. Reasons of suspension of the Free trade agreement between Russia and Ukraine are marked. It operated within the framework of FTA with the CIS, trade and economic collaboration between the countries until the abolition of a free trade with Ukraine by Russian Federation. The consequences of the European technical and phytosanitary standards, substantial diminishing of export and import duties and measures related to the preparation of internal market to «FTA+» are analysed for Ukraine. The form of «FTA+» is found out, which foresees the reduction and liquidation of trade barriers within the framework of a free trade regime. It doesn’t deal only with liberalization of bilateral commodity trade but such spheres, as: trade in services, regime of foreign direct investment, public purchasing and labour force movement. The form of «FTA+» also foresees a wide adaptation program of economic and sectoral legislation of Ukraine to the norms and standards of the EU that will allow removing of nontariff barriers for domestic exports to internal market of the EU.

Транспарентность в спорах в рамках соглашений Европейского Союза о свободной торговле и в практике ВТО

Транспарентность в спорах в рамках соглашений Европейского Союза о свободной торговле и в практике ВТО

Expansion of EU's Free Trade Agreements into Asian Countries and Its Impact on the Chinese Economy

This study investigates the macroeconomic impact of EU's free trade agreements with Asian countries and the US on the Chinese economy. In addition we examine the impacts on the Chinese industry output based on the framework of production network and production fragmentation. The expansion of the EU's economic reach toward ASEAN and Japan through free trade agreement will generate a positive macroeconomic effect on negotiation participants while it generates a negative effect on the Chinese economy: Some portions of existing trade and foreign direct investment will be shifted to partner countries from non-partner countries. However, according to a sectorial analysis, EU's free trade agreements with three countries result in a positive impact on China's electronics and machinery industry, because China's industry is linked to the production fragmentation and foreign affiliates play a crucial role.

EU3 Resistance to Norms in External Action: The Case of the (Future) Borders of Israel and Palestine

This article deals with the resistance of France, Germany and the United Kingdom (EU3) to comply with the EU norms regarding the (future) borders of Israel and Palestine. To do so, it focuses on two cases studies: the issue of Israel’s exports to the EU originating from the settlements, and EU companies operating in settlements in East Jerusalem. The EU3’s reactions differ when it comes to ensure the implementation of the EU soft law regarding the two state solution, and more particularly the issue of future borders. Yet, they all reflect the Member States’ resistance to directly enforce CFSP norms on this matter. In the case of a territorial dispute, the EU’s soft and hard laws are de facto intertwined through EU external action. As matter of fact, the rule of origin defined in EU free trade agreements with both Israel and the Palestinian Authority strongly relies on CFSP positions regarding their future borders. This article argues that conflicting objectives related to this issue between Member States and the EU and among national actors account for the EU3’s resistance attitudes. In other words, a certain form of cognitive distance – the fourth hypothesis of the introduction – between the content of EU norms and Member States’ objectives affects the implementation of CFSP norms. In this case, Germany’s reaction to the Brita case demonstrates its unwillingness to take direct responsibility for setting a precedent regarding the sensitive case of Israeli exports from the settlements, due to its special relationship with Israel. France’s cautious reaction is more particularly related to the latent conflict within its population about this issue. The United Kingdom’s preference for the labelling solution illustrates its liberal nature and its willingness to let British consumers assume the responsibility to decide, though this solution proves difficult to implement in fact. Yet, this article also shows that these resistance attitudes can also lead to the renegotiation of the means of implementation of CFSP norms on this matter, and potentially to their strengthening.

Regulating Services Through Trade Agreements - A Comparative Analysis of Regulatory Disciplines Included in EU and US Free Trade Agreements

Developed countries, led by the EU and the US, have consistently called for ‘deeper integration’ over the course of the past three decades i.e., the convergence of ‘behind-the-border’ or domestic polices and rules such as services, competition, public procurement, intellectual property (IP) and so forth. Following the collapse of the Doha Development Round, the EU and the US have pursued this push for deeper integration by entering into deep and comprehensive free trade agreements (DFTAs) that are comprehensive insofar as they are not limited to tariffs but extend to regulatory trade barriers. More recently, the EU and the US launched negotiations on a Transatlantic Trade and Investment Partnership (TTIP) and a Trade in Services Agreement (TISA), which put tackling barriers resulting from divergences in domestic regulation in the area of services at the very top of the agenda. Should these agreements come to pass, they may well set the template for the rules of international trade and define the core features of domestic services market regulation. This article examines the regulatory disciplines in the area of services included in existing EU and US DCFTAs from a comparative perspective in order to delineate possible similarities and divergences and assess the extent to which these DCFTAs can shed some light into the possible outcome and limitations of future trade negotiations in services. It also discusses the potential impact of such negotiations on developing countries and, more generally, on the multilateral process.