External Competences of the European Community in elation to the WTO

Abstract: Since the signing of the Treaty on the European Union (TEU) in 1993 the European Union has been base on three "&semicpillars"&semic. The European Community falls under the so-called pillar I. Under the terms of the TEU the two pillars on the Common Foreign and Security Policy (CFSP) and on Justice and Home Affairs (JHA) differ from pillar I for they do not share the institutional structure, law-making processes, or legal instruments of the Community pillar, largely beyond the jurisdiction of the Court and lacking the key Community law characteristics of supremacy and direct effect. Craig, Paul, de Búrca, Gráinne, EU Law, Text, Cases, and Materials, sec.ed., Oxford University Press, [1998], p.3. Therefore the two latter pillars are more in line with traditional international law, rather than sharing the supranational characteristics of the European Community. It is important to note that the European Union itself has no external competences of its own. The Council, on the other hand, exercises the external competences on behalf of the Communities. In this paper I will discuss the external competences of the Community in general and in relations to the WTO Agreement and the Agreements covered by it. I will limit my discussion to the competences of the Community under pillar I of the European Union. The WTO Agreement When I refer to the WTO Agreement hereafter I am also referring to the various Agreements and Understandings, annexed to it, except where I especially make notice of doing otherwise. consists of preamble and 16 Articles regulating the scope and functions of the WTO, its institutional structure, legal status and relations with other organizations, decision-making procedures and membership. Its legal complexity derives from the additional 29 Agreements and Understandings listed in the 4 Annexes to the WTO Agreement and from its inclusion into the Final Act embodying the results of the Uruguay Round of Multilateral Trade Negotiations. See Petersmann, Ernst-Ulrich, The Transformation of the Worlds Trading System through the 1994 Agreement Establishing the World Trade Organization, Symposium, The World Trade Organization and the European Union, European Journal of International Law, Vol. 6, No 2, Oxford University Press, [1995], p. 190. The main aim of the Agreement is to promote welfare through international guarantees of freedom, non-discrimination and rule of law in the field of worldwide economic relations. The WTO Agreement established the WTO, which is an international organization. It has the purpose of administrating trade agreements, act as a forum for trade negotiations, settling trade disputes, reviewing national trade policies, assisting developing counties in trade policy issues, and cooperate with other international organization. Trading Into the Future, The World Trade Organization, 2nd ed., revised, [1999], http://www.wto.org/english/res_e/doload_e/tif.pdf. There is a fundamental difference between the WTO and the Community. The European Community is a supranational body, which is based on the notion that the MS have transferred their sovereignty in certain fields to the Community, while the WTO, on the other hand is a international organisation and no transferral of sovereignty has occurred. My intention by writing this paper is to cast a light on the competences of the Community regarding the WTO Agreement, contrary to those of the MS, and the position of the WTO rules in the Community's legal system, the judicial control and their effects. I also elaborate on the difference between the WTO Agreement and other international agreements entered into by the Community and its MS. While writing this paper I took into consideration the very explicit Opinion 1/94 on the WTO Agreement, which is a book in itself. In the extensive Opinion the Court When I refer to the Court in this paper I do not distinguish between the ECJ and the CFI, except where I especially state otherwise. came to the conclusion that all of the Multilateral Agreement on Trade in Goods fell within the common commercial policy and therefore within the exclusive competences of the Community. The Court, on the other hand, concluded that a large part of GATS and almost all of TRIPS fell outside the scope of the common commercial policy and that the Community and the MS had shared the competences to conclude those Agreements. In addition to the Opinion itself I gathered various articles concerning mixed agreements, external competences of the Community and common commercial policy. I also refer in my paper to many articles concerning the Opinion 1/94 itself, the effects of the WTO Agreements and the impact it has on the Community's legal order. The structure of the paper is in somewhat similar to the structure of the Opinion itself and many of the articles I refer to in my writing. In Chapter 2 I outline the Uruguay Round, which lead to the establishment of the WTO Agreement. I also outline the objective of the WTO and its structure. Then I describe the Multilateral Trade Agreements, which form and integral part of the WTO Agreement and contracting parties must take over if they accede to the WTO. This is the so-called "&semicsingle pack"&semic concept. In Chapter 3 I discuss the external competences of the Community in general. I outline the concept of express external powers and the principle of implied external powers and the development o the concept through case law. I also outline the division of external competences between the Community and the MS and on what principles that division is based and outline under what condition the exclusive competences of the Community may occur. I discuss the concept of mixed agreements in length, the many types of mixed agreements and the various difficulties and problems relating to such agreements. This discussion is important for, as already stated the Court, in Opinion 1/94 concluded that most part of the GATS and almost all of the TRIPS fell under the notion of mixed agreement. In Chapter 4 I discuss and outline in length the very important Opinion 1/94 on the WTO Agreement. In my discussion I stick to the approach exercised by the Court and draw out the main points of the ruling. I elaborate on the competences of the Court to interpret the provisions of the WTO Agreement. I discuss the judicial control from the perspective of preliminary rulings and action for annulment brought by the MS under Article 230 EC. Those are the most practical possibilities of reviewing the legality of Community acts for it can be very troublesome for legal and natural persons to prove that they are individually and directly concerned parties. If a case, on the other hand, is brought to the Court under Article 234 EC no such analysis has to take place, and under Article 230 EC the MS are a privilege parties and do not have to show that they are individually and directly concerned. I outline the effect of WTO Agreement within the Community's legal order and whether the Court has jurisdiction to review the legality of community acts based on the provisions of the WTO Agreement and whether WTO stipulation confer rights upon legal or natural persons which can be based on in the Court or the national courts. Finally in Chapter 5 I conclude my discussions and draw my earlier discussion together and outline my conclusion.