EU EXTERNAL ECONOMIC RELATIONS. R.Greaves

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1 EU EXTERNAL ECONOMIC RELATIONS R.Greaves

2 External Aspects of the Internal Market The Common Customs Tariff (CCT) Common Commercial Policy (CCP) R.Greaves

3 ARTICLE 206 TFEU By establishing a customs union in accordance with Articles 28 to 32, the Union shall contribute in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and the lowering of customs and other barriers. R.Greaves

4 COMMON CUSTOMS TARIFF Uniform system of tariffs In place since July 1968 Classification of goods Valuation rules of goods Origin rules of goods Community Customs Code. R.Greaves

5 Application of EU rules to 3rd country products eg Sociaal Fonds. Dutch Diamond Case [1973] R.Greaves

6 LEGAL PERSONALITY Article 47 TFEU The Union shall have legal personality What about capacity (competences)? Arts 2 & 3 TFEU R.Greaves

7 Categories of competence Exclusive Shared Implied R.Greaves

8 COMPETENCES Article 2 1. When the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union or for the implementation of Union acts. 2. When the Treaties confer on the Union a competence shared with the Member States in a specific area, the Union and the Member States may legislate and adopt legally binding acts in that area. The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence. R.Greaves

9 Exclusive Competence Article 3 TFEU 1. The Union shall have exclusive competence in the following areas: (a) (b) (c).. (d) (e) common commercial policy. 2. The Union shall also have exclusive competence for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence, or in so far as its conclusion may affect common rules or alter their scope. R.Greaves

10 Historical Development Express powers Art 207 TFEU Implied powers: ERTA Case, Case 22/70 (now Art 3(2) TFEU) Opinion 1/76 (now Art 3(2) TFEU) Opinion 1/94 (WTO) (now Article 207 post Lisbon) R.Greaves

11 Article 207 TFEU The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping and subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union s external action. R.Greaves

12 SCOPE OF THE CCP Inseparable link with internal free movement of goods Rules of origin main tool on principle of uniformity of treatment with 3rd countries Trade in goods and services (but excludes transport) R.Greaves

13 SCOPE OF CCP cont d Aim: to contribute to harmonious development of world trade and progressive removal of barriers Opinion 1/94 (WTO Opinion) R.Greaves

14 CCP broad but not too broad Belgian Diamond Case, 1973 Opinion 1/94 (WTO Agreements) GATT GATS TRIPS TRANSPORT

15 CCP post Lisbon Art 207(4): qualified majority re agreements with 3 rd countries and international organizations But unanimity re services, commercial aspects of IPRs and foreign direct investment where unanimity required if acting internally Art 207(5): transport agreements within Transport provisions of the TFEU

16 EU relationship with WTO WTO Background: Uruguay Round ( ) Trade in Goods (GATT) Trade in Services (GATS) Trade-Related Aspects of Intellectual Property Rights (TRIPS) GATT influenced EU Treaty eg Art 36 borrowed wording of Art XX Concept of non-discrimination Most-favoured-nation principle (MFN)

17 EU bound by WTO rules Customs Union is a permissible derogation International Fruit 21-24/72 [1972] ECR MSs committed to GATT when ToR negotiated - EU assumed functions in tariff & trade policy in so far as EU assumed MSs powers, WTO provisions bind the EU NB: binding effect does not give RIGHTS to individuals

18 Further case law Germany v Council C-280/93 [1994] -CJEU: GATT provisions cannot be invoked in a court - confirmed in Portugal v Council C-149/96 [1999] Reasoning: (from International Fruit) GATT based on the principle of negotiation undertaken on the basis of reciprocal and mutually advantageous arrangements.

19 But.. CJEU will review EU legislation in light of WTO in 2 situations: (a) (b) where implementing particular WTO obligation where EU refers expressly to WTO precise provisions

20 .. and in Germany v Council [1994] The primacy of international agreements concluded by the [Union] over provisions of secondary [Union] legislation means that such provisions must, so far as possible, be interpreted in a manner that is consistent with these agreements.

21 EU s Trade Policy Covers all measures affecting trade in goods and services and almost trade-related issues (inc. company law; indirect taxation; standards & other technical regulations; and enforcement of IPRs) Most important policy: customs union Trade defence measures

22 Principles of Policy Geared towards trade and investment liberalization Donckerwolcke 41/76 [1976] ECR 1921 (Belgian firms imported textiles into France believing to be Belgian though true origin was Syria and Lebanon. Could France continue to apply quotas and monitor indirect imports; CJEU said YES but need inform Commission) Uniformity Assimilation No discrimination (WTO s MFN but Art XXIV GATT allows preferential trade agreements eg EFTA or CU)

23 Substantive Policies of CCP Generalised Scheme of Preferences (GPS) Import/Export Regimes Trade Defences measures Anti-dumping Anti-subsidy Safeguard measures

24 Generalised Scheme of Preferences Full or partial reduction or suspension of customs duties set out in the CCT with a view to facilitating imports of certain products from developing countries Autonomous measure of the EU: Reg 978/2012 Link between trade and development permitted under Art 207 TFEU Protection of environment Social rights Employment policies Immigration

25 Import/Export Regimes (common rules) Liberal import regime: import licence not required; no quotas (some exceptions eg tobacco, weapons) Reg 2015/478 EU import restrictions: pirated or counterfeit goods; import of live animals; hazardous substances

26 EU Legislation Regulation 2015/478 on imports Derogations same as Art 36 Safeguard measures may be preceded by surveillance Regulation 2015/479 on exports Some export authorisation required but Commission Oks it first Art 36 grounds

27 Trade Defence Measures Antidumping: Reg 1225/2009 (very technical) Normal value (price paid or payable in exporting country) Export price Dumping margin Causes injury Provisional and definitive duties NB: duties not exceed either the dumping or injury margin (the so-called lesser duty rule) Anti-subsidy: Reg 2016/1037 Safeguard Measures: Reg 260/2009 & Reg 625/2009