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23.1.  The objectives and instruments of EU's commercial policy

    The common commercial policy is 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 or subsidies (Article 207 TFEU, ex Article 133 TEC). The implementation of the common commercial policy therefore falls into the Union's sphere of competence [see section 3.2]. The European institutions draw up and adapt the common customs tariff, conclude customs and trade agreements, harmonise measures to liberalise trade with third countries, specify export policy and take protective measures, notably to nip unfair trading practices in the bud.

    The European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall adopt the measures defining the framework for implementing the common commercial policy. If agreements have to be negotiated with third countries, the Commission submits recommendations to the Council, which then authorises it to open negotiations. The Commission is the EU's negotiator and consults a special committee appointed by the Council to assist it in this task (formerly the "133 Committee", now the ''207 Committee''). It works within the framework of guidelines issued by the Council. In exercising the powers granted to it by Article 207 (TFEU), including the conclusion of agreements, the Council acts by a qualified majority [see sections 4.1.4 and 4.3].

    In international agreements, the EU as such, represented by the Commission [see section 4.1.2], is more often than not a party alongside the Member States, which means that it takes part in the negotiations, signs the agreements and if necessary participates in their management as a member of the organisation in question. In areas for which the Union has exclusive responsibility (agriculture, fisheries), the Member States are not at the forefront; the Commission negotiates and manages the agreements on the basis of a negotiating brief delivered by the Council (world commodity agreements, traditional trade agreements, preferential agreements, association agreements) [Case 22-70 and Opinion of the Court]. According to Article 351 (TFEU, ex Article 307 TEC), rights and obligations arising from agreements concluded by the Member States before their accession to the Union [see section 1.2] are not affected by the provisions of the Treaties [see sections 2.2 and 2.3]; but to the extent that such agreements are not compatible with the Treaties, the Member States concerned must take all appropriate steps to eliminate the incompatibilities established [Case 812/79].

    Given the complexity of international relations and of external policy instruments in the broad sense of the term, the Union powers occasionally spill out of the framework defined in Article 207 (TFEU, ex Article 133 TEC). In such cases, the European institutions cannot act alone [see section 4.3]. They must draw in the Member States, a fact that considerably complicates the negotiating process and the conclusion of international agreements. For the negotiation and conclusion of agreements, the Council normally acts by a qualified majority. However, the Council acts unanimously for the negotiation and conclusion of certain agreements in the fields of: trade in services; the commercial aspects of intellectual property; foreign direct investment; trade in cultural and audiovisual services; and trade in social, education and health services.

    The Common Customs Tariff (CCT) is the key to the EU's commercial policy [see section 5.2.1]. As seen in the Chapter on customs union and as will be seen later in this Chapter [see section 23.2.1], the blueprinting and evolution of the CCT have taken place against the backdrop of the General Agreement on Tariffs and Trade (GATT). CCT tariffs were low at the outset, responding to the central objective of liberalisation of international trade. They have been cut even further in the framework of successive GATT negotiations [see section 23.4]. It should be borne in mind that the Commission, acting on a negotiating brief issued by the Council, and not the Member States individually, is the EU's negotiator in the GATT/WTO arena.

    Instead of becoming a "Fortress Europe" when the single market was completed in 1992 [see section 6.1], as feared by some of its trade partners, the European Community made important concessions in order to allow the conclusion of the GATT Uruguay Round in 1993. However, one of the central principles of GATT and WTO is that of balance of mutual advantages (global reciprocity). This means, for the European Union, that it can tie access for third country economic operators to the benefits of the single market with the existence of similar opportunities for European undertakings (businesses, companies) in the country in question, or at the least to the absence of any discrimination. This implies a case-by-case approach for third countries, but a common approach by the Member States. The single market obliges the latter to show a united face to third countries. At the same time, the globalisation of the economy is creating a state of interdependence and a growing realisation that trade problems need to be solved wherever possible in a multilateral framework.

    The concepts of "commercial policy" and "Community competence" have been enlarged thanks to the opinions of the Court of Justice. Indeed, the Court has stated that Article 113 of the EEC Treaty [Article 207 TFEU] cannot be interpreted in a manner which would have the effect of restricting the common commercial policy to the use of instruments designed to influence only the traditional aspects of external trade, excluding more developed mechanisms [Opinion 1/78 of the Court]. The Court has formulated the limits of the action of the Member States in areas where powers are shared with the Community: measures must be "common", must involve close cooperation "both in the process of negotiation and conclusion and in the fulfilment of the obligations entered into", and must ensure "unity in the international representation of the Community" [Opinion 2/91 of the Court]. On the dispute between the Community and the Member States regarding jurisdiction for concluding the Uruguay Round, the Court ruled in an opinion that the Community has exclusive powers in relation to trade in goods and in the cross-border supply of services. However, with respect to the other issues relating to the agreements on services and intellectual property, the Court ruled that powers are shared between the Union and the Member States [Opinion 1/94 of the Court]. Where, the powers are shared and, therefore, the Community and the Member States are obliged to cooperate on the negotiation, conclusion and implementation of international agreements, as those concluded within the Food and Agriculture Organisation (FAO), there is, according to the Court, a need for single representation of the Community/Union and, therefore, the Member States have not the right to vote [Case C-25/94].

    At the time of the entry into force of the Treaty of Lisbon, Member States maintained a significant number of bilateral investment agreements with third countries. Without prejudice to the division of competences established by the TFEU, a Regulation addresses the status of the bilateral investment agreements of the Member States under Union law, and establishes the terms, conditions and procedures under which the Member States are authorised to amend or conclude bilateral investment agreements [Regulation 1219/2012].

    The rare bilateral trade agreements which still exist between the Member States and third countries, notably state-trading nations, are subject to EU vetting [Council Decision of 9 October 1961]. Member States must notify the Commission of all bilateral treaties, agreements or arrangements concerning commercial relations with third countries the extension of which is proposed. The Commission must notify the other Member States and start consultations involving such co-ordination as will ensure the proper functioning and the strengthening of the common market as well as the establishment of uniform principles of common commercial policy in relation to the country in question [Decision 69/494].

    The communication of the Commission ''trade, growth and world affairs; trade policy as a core component of the EU's 2020 strategy'' set out a renewed, more assertive trade policy as a key element in the external dimension to the Europe 2020 strategy [COM/2010/612, see section 7.3]. The new policy builds on a heavy agenda of multilateral and bilateral trade talks and should be seen as a clear statement of Europe's intentions to play an active and assertive role in promoting the trade policy agenda in the G20 and all relevant global trade fora, promoting European values and objectives.

    The systematic production of European statistics on the balance of payments, international trade in services and foreign direct investment is designed to ensure the smooth functioning of the common commercial policy and particularly trade negotiations [Regulation 184/2005, last amended by Regulation 2016/ 1013].

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