Wednesday, 28 January 2009

EU Law: Common commercial policy

With about a fifth of world exports and imports, the European Union is an international trade heavyweight. The framework for external trade is managed through the common commercial policy.




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Current treaty

Article 131 of the Treaty establishing the European Community (TEC) presents the objectives of the common commercial policy.

The customs union between the member states was based on the Treaty of Rome (EEC Treaty) and gradually became a reality.

Against the background of a common customs tariff, the member states of the European Community (European Union) strive for:

· Harmonius development of world trade
· Abolition of restrictions on international trade
· Lowering of customs barriers

The idea behind the second paragraph is still valid, but since the establishment of the customs union the provision is obsolete.

Article 131 TEC is found in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/103:



TITLE IX
COMMON COMMERCIAL POLICY

Article 131 TEC

By establishing a customs union between themselves Member States aim to 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 barriers.

The common commercial policy shall take into account the favourable effect which the abolition of customs duties between Member States may have on the increase in the competitive strength of undertakings in those States.


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Original Lisbon Treaty

Article 2, point 112 of the original Lisbon Treaty (ToL) rearranged the Title on the common commercial policy, renumbered two and repealed two Articles (OJEU 17.12.2007 C 306/80):

TITLES WHICH ARE TO BE MOVED

112) Title IX ‘COMMON COMMERCIAL POLICY’ shall become Title II in Part Five on the Union's external action and Articles 131 and 133 shall become Articles 188 B and 188 C respectively. Article 131 shall be amended as set out below in point 157 and Article 133 shall be replaced by Article 188 C.

Articles 132 and 134 shall be repealed.


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Article 2, point 156 ToL amended the wording of Article 131 TEC, the renumbered Article 188b (page 92):

157) An Article 188 B shall be inserted, with the wording of Article 131; it shall be amended as follows:

(a) the first paragraph shall be replaced by the following:

‘By establishing a customs union in accordance with Articles 23 to 27, the Union shall contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and on foreign direct investment, and the lowering of customs and other barriers.’;

(b) the second paragraph shall be deleted.


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Consolidated Lisbon Treaty

The readable, consolidated Treaty of Lisbon, contains the renumbered Article 206 of the Treaty on the Functioning of the European Union (TFEU), OJEU 9.5.2008 C 115/139:

TITLE II
COMMON COMMERCIAL POLICY

Article 206 TFEU
(ex Article 131 TEC)

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 on foreign direct investment, and the lowering of customs and other barriers.

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The novelties are the reference to the Articles 28 to 32 on the customs union, mentioning restrictions on foreign direct investment and the addition of other barriers.

The Lisbon Treaty wording is practically the same as Article III-314 of the Constitutional Treaty.


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EU competence


When the TFEU presents the rough areas of EU competence, the customs union and its more or less logic corollary, the common commercial policy, appear among the areas of exclusive competence. The second paragraph on international agreements is significant in the field of international trade:

Article 3 TFEU

1. The Union shall have exclusive competence in the following areas:

(a) customs union;

(b) the establishing of the competition rules necessary for the functioning of the internal market;

(c) monetary policy for the Member States whose currency is the euro;

(d) the conservation of marine biological resources under the common fisheries policy;

(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.


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Summaries of external trade legislation

The Commission’s Scadplus web page External trade offers links to information about various aspects of international trade:

http://europa.eu/scadplus/leg/en/s05020.htm


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Commission activities

Activities and news are found on the web pages of the Commission’s Directorate-General External Trade:

http://ec.europa.eu/trade/



Ralf Grahn