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Trade relations face unprecedented challenges, which has led to an increased politicisation and contestation of trade rules. In response, the EU has changed its trade policy under the motto ‘Open Strategic Autonomy’ towards a more as-sertive policy. The EU seeks to signifi-cantly expand its room of manoeuvre and to gain more autonomy by strengthening the en-forcement of its trade rights and by ensuring more effectively, including unilaterally, a level playing field. This re-orientation engenders several new or amended trade policy instru-ments, but meets with reservations as the renewed politicisation of EU trade policy will have internal consequences and raise demands for more democratic accountability of the Euro-pean Commission. The new policy instruments will enlarge its leeway in trade policy. The future of the EU's multilateral, rule- instead of power-oriented political stance becomes unclear, which might undermine its negotiation posi-tion in WTO reform and collide with the EU's respect for international law. The tensions of the EU's new hybrid approach with its international commitments even more fuel demands for increased accountability of the Commission as a safeguard against employing the new powers for protectionism and disrespect to international law. The contribution analyses the need for increased Commis-sion accountability in the redirected trade policy.
This introductory article makes the case for studying joint institutional frameworks (JIFs) in EU bilateral agreements and provides an overview of the remaining contributions to the sympo-sium. In doing so, it addresses contemporary policy developments and theoretical debates in political science and international institutional law. It considers the rationale, design, perfor-mance as well as legitimacy of JIFs both in general and, in particular, in the EU's contractual bilateral relations. By mapping out the variety of JIFs in distinct geographical and regulatory contexts, the article develops an overarching argument about the ‘transversal’ nature of such structural frameworks, focusing on the most prevalent structural principles and rules, joint bodies and special procedures, including those not covered in detail in the other contribu-tions to this symposium.
Democratization of good global governance: The EU's role in the Parliamentarization of trade policy
(2022)
The quest for good governance in trade relations occurs against the backdrop of an increa-sing politicization of trade policy. In the new reality of global value chains and servitisation, regulating trade goes far beyond technical issues of reducing entrance barriers, border measures and tariffs, but becomes a comprehensive endeavour of scrutinizing and policing behind-the-border political issues. Therefore, a call for raising the legitimacy of trade policy formulation and implementation rises. Hence, parliamentarisation of trade policy is ever more necessary. The EU's constitutional development and its practice in trade policy is a good example for more parliamentary involvement, which strengthens trade policy's legi-timacy, transparency, and public awareness. Thus, the EU indeed is, despite all weaknesses,
a pacemaker and hence good global actor to the benefit of democratisation of global trade governance, being an essential factor of good governance.
The TCA (EU-UK Trade and Copperation Agreement) establishes a very comprehensive institutional framework with Partnership Council and diverse Committees having partly substantial decision-making powers for the development of the TCA. These considerable public functions prompt legitimacy concerns as to their democratic control, which this article explores in detail. It will be shown that the exercise of public powers by TCA treaty bodies meets with a sobering legal situation regarding democratic control mechanisms over treaty body decision-making at different levels. Thus, from a constitutional perspective, the legal and legitimate transfer of powers requires additional safeguards as to their democratic legitimacy. Solutions for better control of treaty body decisions by parliaments must be developed at several levels simultaneously.
Wolfgang Weiss’ contribution on “Constitutional Challenges to EU Administrative Soft Law During the Covid-19 Pandemic and Some Proposed Remedies” Studies how during the Covid-19 pandemic, as EU member states struggled to deal with the pandemic, EU officials increasingly resorted to so-called “soft law” to provide guidance to member states. He concludes that, while there are benefits to using EU soft law for crisis management and domestic implementation of EU, he raises concerns regarding their challenges for democratic legitimacy and the rule of law. He contends that these challenges should be addressed by a legislative enactment that sets forth a general framework for the adoption of EU soft law, core elements of which should be stipulations of subsidiarity vis-a-vis executive rulemaking and minimum procedural, transparency and justification requirements for the adoption of Commission soft law. Their domestic effects and reviewability should be clarified as well.
Ex Officio Third Country Subsidies' Review: Similarities with and Differences to State Aid Procedure
(2022)
In May 2021 the European Commission tabled a draft Third Country Subsidies Regulation which stands between trade and competition policy. This new instrument establishes a review of third country subsidies with a view to addressing the competition distortion resulting from foreign subsidies granted to undertakings economically active in the EU internal market. As the new tool complements EU State aid scrutiny with a view to foreign subsidies, the present contribution compares the general procedures and provisions of the new regulation with EU State aid law. It will be shown that despite many similarities with State aid law, considerable differences remain which can be explained by looking at the different procedural and substantive context.
This article takes the proliferation of EU soft law instruments in the management of the COVID-19 pandemic as an opportunity to analyse their effects and challenges to democracy and rule of law in the EU posed by the use of EU soft law in the implementation of EU law. A proposal will be made for a general legal framework on the adoption of administrative EU soft law in order to address them. Enhancing the legitimacy of EU governance requires a general legal framework that introduces minimum procedural, transparency and participa-tory safeguards and foresees looser rules for urgent soft measures. The article thus makes an original contribution by reconsidering the debate about EU soft law in the context of COVID-19 soft law with a view to its salience for domestic implementation of EU law and by developing core elements of a general legal framework.
The Union legislator has recently amended the Aarhus Regulation with the aim of bringing it more in line with the requirements the Aarhus Convention lays down. EU State aid decisions, however, remain excluded from its scope. This exclusion raises questions that form the object of this contribution. The article argues that the arguments presented to justify the continued exclusion of State aid review are not convincing. By not complying with the re-commendations of the ACCC, the EU is in clear violation of international law. Therefore, the article deliberates over the necessary changes and possible exemptions for a sound im-plementation of the Aarhus Convention against the procedural specificities of State aid review, considering also the Commission´s recently presented options, which contain a number of problematic aspects.
Since the Treaty of Lisbon, trade policy has become an explicit part of the EU's external policy and integrated into the general framework of the EU´s external policy, but must also be in conformity with internal policies. Thus, trade policy is subject to a requirement of multiple coherence. Beyond constitutional obligations, other drivers work for the inclusion of non-genuine commercial policy objectives in trade policy, such as the orientation of contemporary trade politics towards the behind the border issues of national regulation, so that trade policy became closely intertwined with domestic regulatory policy. Therefore the actors primarily responsible for legislation, i.e. parliaments, advocate for their extended participation in determining trade policy, and rightly so for reasons of transparency, control and political inclusiveness. Parliaments thus become actors of respect for and positive consideration of non-commercial policy objectives in trade policy, which applies as well to the European Parliament (EP). Hence, an institutional design of policy formulation cycles and decision-making in EU trade policy that strives for better coherence of trade concerns with NTPOs must focus on strengthening the influence of the EP and improve its participatory rights in decision-making and its control and monitoring mechanisms. Consequently, the present paper derives proposals for improving EP´s monitoring mechanisms for the benefit of non-trade policy objectives (NTPOs) in trade policy from an analysis of weaknesses in the negotiation and implementation stage of trade policy.
After the invocation of security exceptions became more common, the first panel report ever on how to apply them has recently been issued in the Russia – Measures Concerning Traffic in Transit case. While this panel addressed the application of the security exception in a situation of threat to international peace and security, the question must be raised whether its approach also applies to the invocation of security exceptions for economic reasons. In this context, the present chapter focuses on the methodical preliminaries to applying security exceptions: Its application in WTO dispute settlement does not only prompt the question of the jurisdiction of WTO panels and the Appellate Body, but also pertains to the issues of standard of proof and standard of review. A related methodical issue concerns the feasibility of the expansive interpretive approach applied to the general exceptions to the security exception. Reading it in the same tune runs the risk of nullifying the concept of multilateral trade regulation altogether, even more so as the security exceptions miss the usual safeguard against abuse, i.e. the requirements of the general exceptions´ chapeau. The lack of such safety valve confirms that security exceptions are of a different character compared to other exceptions. This difference, however, may be difficult to maintain if security exceptions are also used to defend economic security interests. Finally, the application of security exceptions may - as debated with regard to other WTO exceptions - be subject to an inherent limitation against exterritorial application, which would restrain its scope of application in cases in which security measures against a third country intend to affect also the trade of WTO members, and could become relevant in assessing US sanctions against Iran.
This chapter identifies the most pressing challenges for the EU multilaterally oriented trade policy due to the changing global context for international trade and investment, caused by the shift of the US towards unilateralism and protectionism and by the re-orientation of China´s exceptionalism towards becoming a more influential actor. It explores and assesses how EU trade policy copes with the new polarities and finally formulates proposals for the way forward for the EU multilateral trade policy. It will be shown that the current challenges are more fundamental in character and may last longer than currently anticipated. It will also highlight that maintaining unity in the EU determination of trade policy is of pivotal importance for addressing the challenges, which however might become more difficult.
The introduction will describe the constant evolving global political context correlated to the events occurring, specifically, in the trade environment and the unprecedented challenges they pose for the EU Trade Policy. These identified and introduced challenges will be addressed in detail in the following book chapters. It will also introduce the reader to the individual contributions of the book and briefly present and anticipate the results attained.
Mixed agreements have been a preferred form of entering into international treaties chosen by the EU and its Member States, despite the complexities their usage implies. Recent attempts of the EU institutions to prefer the conclusion of EU only agreements to mixed agreements, as a consequence of the broad interpretation of EU exclusive trade competences by the CJEU in Opinion 2/15 are motivated by the hope for increased efficiency in EU treaty making. They, however, provoke criticism with regard to democratic legitimacy and the EU principle of conferral, which constrain the EU to adopt only those legal acts for which it is competent. As this criticism is particularly strong in Germany and led to constitutional challenges of EU only acts, the present contribution will explain the treatment of mixed agreements in the constitutional order of Germany and explore the constitutional challenges that EU only agreements pose to the German constitutional order. This discussion will thus show the German legal order’s continued preference for mixed agreements, in view of the jurisprudence of the German Federal Constitutional Court (FCC). Those constitutional challenges are particularly topical in view of the most recent case law of the CJEU that stressed the political leeway of the EU Council to choose, when it comes to the negotiation and conclusion of EU agreements based on shard competences, between either an EU only agreement or a mixed agreement. This political leeway turns mixity into a facultative endeavour in the hands of the Council. Under the constitutional perceptions of the FCC, such type of facultative mixity meets with considerable constitutional concerns because it replaces what was formerly held obligatory mixity.
The present contribution analyses the Opinion 1/17 of the CJEU on CETA, which, in a surprisingly uncritical view of conceivable conflicts between the competences of the CETA Investment Tribunal on the one hand and those of the CJEU on the other hand, did not raise any objections. In first reactions, this opinion was welcomed as an extension of the EU's room for manoeuvre in investment protection. The investment court system under CETA, however, is only compatible with EU law to a certain extent, which the Court made clear in the text of the opinion, and the restrictions are likely to confine the leeway for EU external contractual relations. Due to their fundamental importance, these restrictions, derived by the CJEU from the autonomy of the Union legal order form the core subject of this contribution. In what follows, the new emphasis in the CETA opinion on the external autonomy of Union law will be analyzed first (II). Subsequently, the considerations of the CJEU on the delimitation of its competences from those of the CETA Tribunal will be critically examined. The rather superficial analysis of the CJEU in the CETA opinion is in contrast to its approach in earlier decisions as it misjudges problems and therefore only superficially leads to a clear delimitation of competences (III.). An exploration of the last part of the CJEU's autonomy analysis will follow, in which the CJEU tries to respond to the criticism of regulatory chill (IV). Here, by referring to the unhindered operation of the EU institutions in accordance with their constitutional framework, the CJEU identifies the new restrictions for investment protection mechanisms just mentioned, which takes back the previous comprehensive affirmation of jurisdiction of the CETA Tribunal in one point and which raises many questions about its concrete significance, consequence, and scope of application.