Friday, 21 March 2008

EU TFEU: Quantitative export restrictions

The provisions of the European Community (in the future the European Union) banning quantitative restrictions on imports and exports in the single market, and all measures having equivalent effect, look like mirror images (except for two commas).

Still, there is a difference, because barriers against imports inevitably raise the question of protectionist intentions, whereas member states generally look favourably on exports.

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In the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) observes silence between point 45 on Customs cooperation and point 46 on Agriculture and fisheries (OJ 17.12.2007 C 306/52-53). The annexed Tables of equivalences however give us an indication that there is a whole chapter to look at, brief but of fundamental importance to the internal market (OJ 17.12.2007 C 306/207).

We notice that Article 29 of the Treaty establishing the European Community (TEC) first becomes Article 29 of the Treaty on the Functioning of the European Union (TFEU) in the Lisbon Treaty version (ToL), later to be renumbered Article 35 TFEU in the coming consolidated versions.

We set the provision into its future context (from the Tables of equivalences) and present its contents (taken from the latest consolidated version of the current treaties, OJ 29.12.2006 C 321 E/53):

Part Three Policies and internal actions of the Union

Title I The internal market

Chapter 2 (renumbered Chapter 3) Prohibition of quantitative restrictions between Member States

Article 29 TFEU (ToL), renumbered Article 35 TFEU

Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States.

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The European Convention proposed the following Article III-42 of the draft Treaty establishing a Constitution for Europe (OJ 18.7.2003 C 169/34):

Subsection 3
Prohibition of quantitative restrictions

Article III-42 Draft Constitution

Quantitative restrictions on imports and exports and all measures having equivalent effect shall be prohibited between Member States.

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The IGC 2004 took over the draft text ‘verbatim’ as you see in Article III-153 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/65):

Subsection 3
Prohibition of quantitative restrictions

Article III-153 Constitution

Quantitative restrictions on imports and exports and all measures having equivalent effect shall be prohibited between Member States.

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If we take a look at the following Articles of the current TEC and the proposed TFEU, we are able to see that they have separate provisions concerning quantitative restrictions on imports and on exports, whereas the draft Constitution and the Constitution shortened the text by merging the two.

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Restrictions on import as well as on exports can hinder the free flow of goods in the internal market. Article 29 TFEU (ToL; 35 TFEU) concerns trade between member states, and it is clear enough to be directly applicable, potentially striking down national provisions or practices with contrary effects. Restrictions in relation to third countries are dealt with under external trade provisions.

Examples of prohibited export restrictions include express export quotas, export bans and systematic controls on export goods.

Whereas restrictions on imports raise the presumption of protectionist motives, domestic practices concerning potential exports are less harshly judged. General national measures putting national potential exporters at a disadvantage (reverse discrimination) are tolerated to a certain extent. Examples include less favourable working hours in bakeries and restrictive opening hours for shops serving a cross-border clientele.

Grounds for justifiable domestic measures are found in the following Article 30 TEC and TFEU (ToL), renumbered Article 36 TFEU.

Article 296(1)(b) TEC and TFEU (ToL), renumbered Article 346 TFEU, contains a specific authorisation, on security grounds, of restrictions pertaining to the trade in arms, munitions and war material (but not to products not intended for specifically military purposes).


Ralf Grahn