THE EUROPEAN COMMUNITY TRADE BARRIERS
REGULATION: PRIVATE PARTY
INVOLVEMENT IN INTERNATIONAL
PROCEDURES REGARDING UNFAIR FOREIGN
TRADE PRACTICES
by Jose Manuel Cortes Martin·
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
INTRODUCTION
"
SUBSTANTIVE REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . ..
PROCEDURE
REMEDIES
JUDICIAL REVIEW
"
WHAT ABOUT COMMUNITY INTEREST?
. . . . . . . . . . . ..
TRADE BARRIERS REGULATION: THE MOST EFFECTIVE
INSTRUMENT?
CONCLUSIONS
"
269
271
276
278
279
289
291
294
I. INTRODUCTION
The tendency to take recourse on unilateral trade dispute resolution
measures is increasing on both sides of the Atlantic. Certainly, both the
United States (US) and the European Union (EU) have adopted legal
instruments aimed at allegedly unfair foreign trade practices. In the Trade Act
of 1974, Congress empowered the President to suspend or withdraw the
benefits oftrade agreements and to impose additional duties, or other import
restrictions, on products from countries engaging in unfair trade practices. t
•Associate Professor of International Law at Pablo de Olavide University School of Law in
Seville (Spain); L.L.M. in EuropeanCommunity Law (Belgium), 1994; Ph.D. Universidad PablodeOlavide
de Sevilla, 2002; visiting Professor at Texas Tech University School ofLaw, summer 2003. I wish to thank
all the professors at Texas Tech University School of Law for their warm welcome, with a special thanks
to Dean Walter Huffinan, Professor Jorge Ramirez, and Frank Ramos, for their assistance.
1. Trade Act of 1974, Pub. L. No. 93-618, § 301, 88 Stat. 1978,2041-43 (1975) (codified as
amended at 19 U.S.C. § 2411 (2000». "Super 301" was renewed by Executive Order dated Mar. 3,1994.
Exec. Order No. 12,901,59 Fed. Reg. 10,727 (Mar. 3, 1994); Wolfgang W. Leirer, Retaliatory Action in
United Stales & European Union Trade Law: A Comparison a/Section 30/ a/the Trade Act 0/ /974 &
Council Regulation 264//84, 20 N.C,j.1NT'L L. & COM. REG. 41, 89·90 (1994). However, the power to
restrict imports from countries that unfairly discriminate against U.S. exports has explicitly been vested in
the Executive branch for more than one hundred years. See, e.g., Tariff(McKinley) Act of 1890, ch. 1244,
26 Stat. 567, 612 (1890). In 1890, Congress granted the President the power to impose a retaliatory tariff
schedule on certain agricultural goods from countries levying duties on U.S. products which the President
deemed to be "unequal or unreasonable." Id. In 1934, Congress amended the TariffAct of! 930 and again
provided for Presidential authority analogous to that ofsection 301. Act ofJune 12, 1934, ch. 474, § 350,
48 Stat. 943,943-44 (codified as amended, with some differences in language at 19 U.S.C. §§ 1351-1366
(1988». Under the new section 350(a)(2) of the amended 1930 Tariff Act, the President was entitled to
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In 1984, partly in response to section 301 of the Trade Act of 1974,2 the
Council ofthe European Communities enacted the so-called New Commercial
Policy Instrument (NCPI),3 which was renewed in 1994 as part ofa legislative
package implementing the Uruguay Round. 4
The main purpose of the new Trade Barrier Regulation (TBR) is to
provide European Community (EC) industries with a weapon against obstacles
faced by EC firms in non-EC countries (third countries) or countries within
the EC. The TBR establishes rights for private parties to complain about a
country's illegal trade practices and request that ED authorities swiftly and
effectively intervene, which may include retaliatory power. s This aggressive,
market-opening approach may be contrasted with other EC trade instruments,
such as antidumping, anti-subsidy, and safeguards legislation, which aim at
protecting the EC market from imports that cause injury inside the EC making
them defensive in nature. 6 The revised TBR is closely linked to the
strengthened dispute settlement provisions of the World Trade Organization
proclaim modifications ofexisting duties (decreases and increases) and to suspend the application ofsuch
a proclaimed decrease of duties to products of any country "because of its discriminatory treatment of
American commerce ...." Id. at 944. Finally, Congress passed the immediate predecessor ofsection 301,
section 252 of the Trade Expansion Act of 1962, which was comprised ofdetailed provisions concerning
unilateral retaliatory action in cases of unfair foreign practices. Trade Expansion Act of 1962, § 252, Pub.
L. No. 87-794, 76 Stat. 872,879-80 (1962) (codified as amended, with some differences in language, at
19 U.S.C. § 1862 (2000».
2. See Michael B. Devine, The Application ofEEC Regulation 264//84 on Illicit Commercial
Practices with Special Reference to the U.S.A., 22INT'LLAW. 1091, 1093 (1988). Not surprisingly, the
first action of the Council under the new regulation was directed against the United States. See
Commission Decision of 12 March 1987 on the Initiation of an International Consultation and Disputes
Settlement Procedure Concerning a United States Measure Excluding Imports ofCertain Ararnid Fibres into
the United States ofAmerica, art. I, 1987 OJ. (L 117) 18; Noticeoflnitiation ofan Examination Procedure
Concerning lIIicit Commercial Practices within the Meaning ofRegulation (EEC) No. 2641184, Consisting
of the Exclusion from the [U.S.] Market of the Unlicensed Importation of Certain Aramid Fibre
Manufactured by Akzo NV or Its Affiliated Companies outside the United States, 1986 0.1. (C 25) 2.
3. Council Regulation 2641/84 of 17 September 1984 on the Strengthening of the Common
Commercial Policy with Regard in Particular to Protection Against lIIicit Commercial Practices, 1984 OJ.
(L 252) 1.
4. Leirer, supra note I, at 45. "Though both section 301 of the Trade Act of 1974 and Council
Regulation 2641/84 authorize trade retaliation against foreign countries using trade practices which are
deemed to be unfair or 'illicit,' and though Council Regulation 2641184 can, at least, partly be considered
as an express countermeasure against § 30 I ofthe Trade Act ofl974, the two instruments show remarkable
differences with regard both to their procedural and substantive law." Id. at 89-90. Moreover, it is
interesting to note that the actual use of the retaliatory authority provided for in the two instruments made
by the United States and the European Union differs enormously. See Devine, supra note 2, at 1108-09;
Marco C.EJ. Bronckers, Private Response to Unfair Trade Practices-UnitedStates and EEC Complaint
Procedures, 6 Nw. 1. INT'L L. & Bus. 65 I (1984).
5. See generally Council Regulation 3286/94 of22 December 1994 Laying Down Community
Procedures in the Field of the Common Commercial Policy in Order to Ensure the Exercise of the
Community's Rights Under International Trade Rules, in Particular Those Established Under the Auspices
of the World Trade Organization, 1994 OJ. (L 349) 71, as amended by Council Regulation 356/95 of20
February 1995,1995 OJ. (L413).
6. See Bronckers, supra note 4, at 706,724,733; Leirer, supra note I, at 71,73.
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(WTO).' This article will examine how this instrument works and how such
private grievances in the EU end up in WTO dispute settlement, which is still
notorious for its aversion to private participation.
II. SUBSTANTIVE REQUIREMENTS
The most important feature of the TBR is that it enables Ee authorities
to respond to "obstacles to trade."8 Article 2( 1) defines an obstacle to trade
as "any trade practice adopted or maintained by a third country in respect of
which international trade rules establish a right of action.,,9 Such a right of
action is deemed to exist when international trade rules either prohibit a
practice outright or give another party affected by the practice the right to seek
elimination of the effect'° of the practice in question." Furthermore, article
7. Council Regulation 3286/94, supra note 5, at art. 2(2).
8. Id. at art. 2(1). This term replaces the previous term "illicit commercial practices," which was
used in art. 2(1) of the Regulation that states that "[f]or the purposes ofthis Regulation, illicit commercial
practices shall be any international trade practices attributable to third countries which are incompatible
with international law or with the generally accepted rules." Council Regulation 2641/84, supra note 3,
at art. I(b) I. By limiting the scope of action against illicit commercial practices at the initiative of private
petitioners, the European Commission wanted, under Council Regulation 2641184, to "allay the concerns
of certain Member States which feared that the new commercial instrument would be too protectionist."
Leirer, supra note I, at 73. Moreover, the Commission wanted to avoid "costly examination proceedings
where there was no prima facie general material interest at stake." Id.
9. Council Regulation 3286/94, supra note 5, at art. 2(1). Under the TBR, complaints have to
refer to a "right of action" which the European Union can derive from international trade rules. Id. The
TBR says that these are "primarily" rules established in the WTO framework, meaning that other rules can
be envisaged as well. Id. at art. 2(2).
10. See General Agreement on Tariffs and Trade, art. xxm.1 (a), Oct. 30, 1947,61 Stat. 5,6,
T.I.A.S. 1700,55 U.N.T.S. 187,266-68 [hereinafter GATI] (defining "violation complaint" within the
WTO framework).
If any contracting party should consider that any benefit accruing to it directly or indirectly
under this Agreement is being nullified or impaired or that the attainment of any objective of
the Agreement is being impeded as the result of (a) the failure of another contracting party to
carry out its obligations under this Agreement, or (b) the application by another contracting
party of any measure, whether or not it co'!flicts with the provisions 0/ this Agreement . ...
Id. (emphasis added); see Suing-joan Cho, GAITNon-Violation Issues in the wro Framework: Are they
the Achilles' Heel o/the Dispute Settlement Process?, 39 HARV.INT'L LJ. 311 (1998) (discussing the
concept of non-violation complaints in the GATI and now in the WTO).
11. See Marco Bronckers & Natalie McNelis, The EU Trade Barriers Regulation Comes 0/Age,
in 35 J. WORLD TRADE No. 4 at 427, 433 (Aug. 2001). It can not be excluded that a TBR complaint could
still be based on customary international law. Id. But contrary to the NCP1, the TBR no longer allows
complaints against "violations of 'generally accepted rules,' which covered complaints about international
agreements to which the defendant country was not a party or complaints derived from 'soft law.' " ld.
The application of international agreements to which the defendant country was not a party was
controversial because the "de/acto" application of GATT rules to non-members, for example, could be a
violation of the principle of public international law and those countries which are not party to the treaty
cannot be bound by its provisions. See Bronckers, supra note 4, at 724. The First Vienna Convention on
the Law of Treaties codified this rule of customary international law by stating that "[a] treaty does not
create either obligations or rights for a third state without its consent." May 23, art. 34 1969, 1155
U.N.T.S. 331, 341. However, the characterization ofa foreign practice as "incompatible ... with 'generally
accepted rules' " under the NCPI only mattered for the right of complaint of the EU industry and for the
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I clarifies that the obstacles to trade may have an effect either on the
Community market or on the market of a third country.12 In the first case,
injuryl3 will have to be proven, while in the second case, adverse effects must
be proven. 14 The regulation covers trade in goods and trade in services. IS
The TBR contains three courses of action, laid down in articles 3, 4, and
16
6. First, with respect to obstacles to trade that have an effect on the EC
market, the TBR states that "[a]ny natural or legal person, or any association
not having legal personality, acting on behalfofa Community industry"17 that
considers itself injured as a result of the obstacles, may lodge a written
complaint. 18 "The complaint must contain sufficient evidence ofthe existence
Commission's ability to open an investigation. Leirer, supra note I, at 84. This did not have any
immediate negative consequences for the third country concerned until the final stage of such an
examination procedure. Id.
12. See Council Regulation 3286/94, supra note 5, at art. I(a)-(b). This article discusses the issue
of "responding to obstacles to trade that have an effect on the market of the Community, with a view to
removing the injury resulting therefrom" and "responding to obstacles to trade that have an effect on the
market ofa third country, with a view to removing the adverse trade effects resulting therefrom." Id.
13. See id. at art. I(a).
14. See id. at art. I(b).
15. "For the purposes ofthis Regulation, 'injury [sic] shall be any material injury which an obstacle
to trade causes or threatens to cause, in respect of a product or service, to a Community industry on the
market of the Community.'" Id. at art. 2(3) (emphasis added).
16. See id. at arts. 3, 4, 6.
17. Id. at art. 3( I). The Regulation spells out in considerable detail that "Community Industry"
shall be taken to mean:
... [A]II Community producers or providers, respectively:
- of products or services identical or similar to the product or service which is the
subject of an obstacle to trade, or
- of products or services competing directly with that product or service, or
• who are consumers or processors of the product or consumers or users of the
service which is the subject of an obstacle to trade,
or all those producers or providers whose combined output constitutes a major
proportion of total Community production of the products or services in question
however:
(a) when producers or providers are related to the exporters or importers or are
themselves importers of the product or service alleged to be the subject of
obstacles to trade, the term "Community industry" may be interpreted as
referring to the rest of the producers or providers[;]
(b) in particular circumstances, the producers or providers within a region of the
Community may be regarded as the Community industry if their collective
output constitutes the major proportion ofthe output of the product or service
in question in the Member State or Member States within which the region is
located provided that the effect of the obstacle to trade is concentrated in that
Member State or those Member States.
Id. at art. 2(5).
18. Id. at art. 3( I). The procedural law ofthe TBR reflects some improvements with respect to the
NCPI. See id. Under Regulation (CEE) No. 2641/84, the right of private parties to lodge complaints was
more limited in some respects because the Council of Ministers of the EU, when passing this regulation,
deliberately set high standards for the admissibility of private complaints in order to allay the concerns of
some member states which were against any sort of private involvement. See Bronckers, supra note 4, at
736; Leirer, supra note I, at 91. In contrast, the United States Congress wanted to encourage private
petitions; ''the threshold requirements for the admissibility of a complaint are easy to satisfy and do not
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of the obstacles to trade and the injury resulting."19
One of the most important questions is whether a private complaint is
admissible if it is based on the allegation that a certain foreign commercial
practice is illicit because it infringes on international legal rules that are
neither self-executing nor directly applicable. 20 Negating this question would
mean that a private petitioner could not invoke the violation of GAIT
provisions because these rules, at least according to the European Court of
Justice (E.C.J.),21 are neither self-executing nor have they been incorporated
into the ED's legal orderY However, such a standpoint is based on a
misinterpretation of the purposes and effects of the TBR. It is not concerned
with the direct enforceability by private individuals of benefits accruing to
them under GATT or any other non-self-executing rule of international law.23
Rather, the TBR only sets out the requirements for private petition; therefore,
it only deals with the prerequisites for action by the Commission and its duties
under the TBR. 24 Moreover, restricting private complaints to commercial
practices violating self-executing rules would limit the practical impact ofthe
TBR. 23 Both the Commission and the E.C.J. seem to agree with this
standpoint. In the Akzo case, the Commission accepted a complaint even
though it was based on an alleged violation of article XX(d) and article III(4)
of the GAIT (Le., non-self-executing provisions),zo The E.C.J., in its Fediol
present a serious hurdle for private petitioners." Leirer, supra note I, at 90-91; S. REp. No. 1298, at 93
(1974), reprinted in 1974 U.S.C.C.A.N. 7186. "In 1974, Congress, believing that the Executive would
not use the new instrument efficiently and often enough, provided for a complaint procedure whereby
private parties could request the [United States Trade Representantive] USTR to initiate an examination
procedure in order to increase the likelihood of retaliatory action." Leirer, supra note I, at 90.
19. Council Regulation 3286/94, supra note 5, at arts. 3(2),4(2).
20. See Ross Denton, The New Commercial Policy Instrument and Akzo v. DuPont, 13 EUR. L.
REv. 3, 8 (1988); Jacques Steenbergen, The New Commercial Policy Instrument, 22 COMMON MKT. L.
REv. 421, 426 (1985).
21. Case C-27 and 122100, Omega Air, 2002 E.C.R. 1-2569; Case C-491/01, British American
Tobacco, 2002 E.C.R. 1·11453; Case C-377198, Netherlands v. Parliament and Council, 2001 E.C.R. 17079; Case C-301/97, Netherlands v. Council, 200 I E.C.R. 1-8853; Joined cases Case C-89/99, SchievingNijstad, 2001, E.C.R. 1-5851; Joined cases C-300/98 and C-392198, Parfums Christian Dior and Assco
Geruste, 2000, E.C.R. 1·11307; Cases C-149/96, Portugal v. Council, 1999 E.C.R.I-8395; Case 39175,
Douaneagent der NV Nederlandse Spoorwegen v. Inspecteur der Invoerrechten en Accijnzen, 1975 E.C.R.
1439; Case 9173, Schluter v. HZA Lorrach, 1973 E.C.R. 1135; Case 41-44170, Int'I Fruit Co. NV v.
Comm'n, 1971 E.C.R. 411; see Ernst-Ulrich Petersmann, Application ojGATT by the Court ojJustice oj
the European Communities, 20 COMMON MKT. L. REv. 397 (1983).
22. Denton, supra note 20, at 8.
23. Id.
24. See Leirer, supra note I, at 72.
25. See Steenbergen, supra note 20, at 427 (noting that the Court of Justice was to maintain that
private companies can only complain about infringements of directly applicable rules or rules of a selfexecuting character, the risk is that the practical impact of the new instrument will be rather limited).
26. Notice of Initiation of an Examination Procedure Concerning Illicit Commercial Practices
within the Meaning ofRegulation (EEC) No. 2641/84, Consisting ofthe Exclusion from the [U.S.] Market
of the Unlicensed Importation of Certain Aramid Fibre Manufactured by Akzo NY or Its Affiliated
Companies outside the United States, 1986 0.1. ( C 25) 2. This was the first case filed under the NCPI.
A Dutch company, Akzo, challenged the GATT-legality ofa provision of US Trade Law. Id. Pursuant to
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III ruling, stated that "Regulation 2641/84 (the former TBR) entitles the
economic agents concerned to rely on the GAIT provisions in the complaint
which they lodge with the Commission in order to establish the illicit nature
of the commercial practices which they consider to have harmed them.,,27
Second, with respect to obstacles to trade that have an effect on a third
country market, "any Community enterprise, or any association, having or not
legal personality, acting on behalfone or more Community enterprises," may
lodge a complaint,28 This type of complaint, however, shall be considered
admissible only if the alleged obstacle to trade is the "subject of a right of
action established under international trade rules laid down in a multilateral
or plurilateral trade agreement" (actionable commercial practice).29 It seems
obvious that the regulation is referring to the WTO framework and that
bilateral agreements are excluded. 30 This restriction sits uncomfortably
because the EU can certainly derive rights ofaction from bilateral agreements
as well. 31 This restriction does not reflect a difference in legal appreciation
of bilateral agreements, but rather a political concern. 32 Where no role exists
for private actors in the regulation, they are meant to use the dispute
settlement provisions of the bilateral agreement in question. 33
The complaint must contain sufficient evidence of the existence of the
obstacles to trade and of the resulting "adverse trade effects."34 Article 2(4)
describes adverse trade effects as those which cause an obstacle to trade,
regarding a product or service, to EC enterprises on the market of any third
country and which have a material impact on the economy of the EC, or a
section 337 the US International Trade Commission could impose bans following allegations that such
imports infringed US intellectual property rights. Id. Aha argued that this procedure was defective and
discriminatory in a number of respects, as it could only be invoked by US industries, and since it differed
from intellectual litigation in US federal courts. Id. The European Commission agreed and brought the
case to the GATT. Commission Decision of 12 March 1987 on the Initiation of an International
Consultation and Disputes Settlement Procedure Concerning a United States Measure Excluding Imports
ofCertain Aramid Fibres into the United States ofAmerica, 1987 OJ. (L 117) 18. A GATT Panel upheld
the EU complaint, and found that section 337 violated the GATT national treatment obligation. See United
States-Section 337 of the Tariff Act of 1930, Nov. 7, 1989, GATT BJ.S.O. 36 at 345-402 (1988/1989)
[hereinafter B.I.S.0J.
27. Case 70/87, EEC Seed Crushers' & Oil Processors' Fed'n (Fediol) v. Comm'n, 1989 E.C.R.
1781, V 22; see Arthur E. Appleton, Annotation. European Communities-New Commercial Poiicy
Instrument-judicial review o/Commission decisiott-a//eged Argentine violation of GAIT, 84 AM. J.
INT'LL. 258 (1990).
28. Council Regulation 3286/94, supra note 5, at art. 4(1). The regulation defines "Community
enterprise" as "a company or firm formed in accordance with the law of a Member State and having its
registered office, central administration or principal place of business within the Community, directly
concerned by the production of goods or the provision ofservices which are the subject of the obstacle to
trade." Id. at art. 2(6).
29. Id. at art. 4(1).
30. See Bronckers & McNelis, supra note II, at 434.
31. Id.
32. Id.
33. Id.
34. Council Regulation 3286/94, supra nole 5, at art. 4(2).
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region thereof, or on a sector of economic activity therein. 3s This effects
standard is more lenient than the injury test demanded under NCPI and would
seem to reflect recognition of the fact that a WTO violation may occur even
without an injury.36 The effects include a trade barrier that not only causes or
threatens to cause damage to existing and potential trade, but more
importantly, it may prevent trade opportunities from arising, because, as
Kuijper has stated, "the GAIT does not protect trade flows as such, but
competitive opportunities for trade."37
Third, any Member State may ask the Commission to initiate either ofthe
two article 1 procedures. 38 Contrary to private parties, Member States may
lodge two different types of complaints, one with respect to obstacles to trade
in a third country market that are the subject of a right of action established
under multilateral trade agreements and the other with regard to bilateral
agreements. 39
The question whether the Commission can self-initiate an investigation
is not explicitly addressed in the TBR, nor was it under NCPI. 40 Whereas
some commentators suggest that the practice under the antidumping and antisubsidy rules serves as a guideline because the relevant procedural provisions
of the TBR are modeled after the antidumping and anti-subsidy rules, others
suggest that this argument is erroneous given the differences in the wording
ofthe relevant parts ofthe antidumping\anti-subsidy regulation, on one hand,
and the TBR, on the other hand. 41
Id. at art. 2(4).
Council Regulation 2641/84, supra note 3.
Pieter Jan Kuijper, The New WTO DiJpute Se/llement System: The Impact on the European
Community, in 29 J. WORLD TRADE No.6, at 49,57 (Dec. 1995).
38. Council Regulation 3286/94, supra note 5, at art. 6(1).
39. Compare id., at art. 4(1) (stating that "[s]uch complaint, however, shall only be admissible if
the obstacle to trade alleged therein is the subject of a right ofaction established under international trade
rules laid down in a multilateral or plurilateral trade agreement") with id. at art. 6(1) (stating that only a
"Member State may ask the Commission to initiate the procedures referred to in Article I"). Thus there
is no limit to the way in which Member States can complain about agreements.
40. See Council Regulation 3286/94, supra note 5; Council Regulation 2641/84, supra note 3.
41. See, e.g., Council Regulation 384196 of22 December 1995 Protection Against Dumped Imports
from Countries not Members ofthe European Community, 1995 OJ. (L 56) 1; Council Regulation 2026197
of 6 October 1997 Protection Against Subsidized Imports from Countries not Members of the European
Community, 1997 OJ. (L 288) 1. Compare JACQUES H.J. BOURGEOIS, EC RULES AGAINST"ILLlcrrTRADE
PRACTICES"-POLICY COSMETICS OR INTERNAnONAL LAw ENFORCEMENT, 1988 Annual Proceedings of
the Fordham Corporate Law Institute: European!American Antitrust and Trade Law 6-1, 6-21 (Barry E.
Hawk ed., 1988), with Leirer, supra notel, at 77 (contrasting the Commission's ability to self-initiate an
investigation under the TBR versus the NCPI). Following Bourgeois, though an antidumping or antisubsidy procedure will normally only be initiated after a complaint by a private party was lodged, this
instrument does not make the receipt of a complaint an obligatory prerequisite for the initiation of an
investigation. BOURGEOIS, supra, at 6·21. Therefore, in his opinion, it can be argued that because ofthe
nearly identical wording of certain parts of the TBR and protection against dumped imports, the
Commission should also be able to self·initiate procedures under the TBR. See id. However, Bourgeois
is of the opinion that if the Commission follows its present policy in antidumping and anti-subsidy cases
it is highly unlikely that it will self-initiate an investigation under the TBR. Id.
35.
36.
37.
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In spite of the silence of the Regulation, it is obvious that the
Commission can self-initiate an investigation under article 211 of the
European Community Treaty (EC Treaty), which disposes: "In order to
ensure the proper functioning and development of the common market, the
Commission shall: ensure that the provisions of this Treaty and the measures
taken by the institutions pursuant thereto are applied ... .''''2 Therefore, the
Commission must guard the common market by fulfilling not only the EC
Treaty, but also international treaties, especially the Agreement on Technical
Barriers to Trade. 43
To finish with substantive requirements of the TBR, it must be said that
both injury and adverse effects must be analyzed on the basis ofan illustrative
list of factors, similar to the ones set out in the basic antidumping44 and antisubsidy regulations. 4s However, when adverse trade effects are alleged, article
I0(4) additionally provides that such effects may arise, inter alia, in situations
in which trade flows concerning a product or service are prevented, impeded,
or diverted as a result of any obstacle to trade, or in situations in which
obstacles to trade have materially affected the supply of inputs (e.g., parts,
components, or raw materials) to Community enterprises.46
III. PROCEDURE
The decision to initiate a "Community examination procedure" should
normally be taken by the Commission within forty-five days ofthe receipt of
42. TREATY ESTABLISHING THE EUROPEAN COMMUNITY, Feb. 14, 2000 OJ. (C 325) I (2002)
[hereinafter, EC TREATY) (incorporating changes made by Treaty ofNice amending the Treaty on European
Union, the Treaties establishing the European Communities, and certain related acts). The Treaty ofNice
amended the Treaty Establishing the European Community, Mar. 25, 1957,298 V.N.T.S. II, 1973 Gr. Brit.
T.S. No. I (Cmd. 5179-11), as amended by Treaty on the European Union, Feb. 7, 1992, I C.M.L.R. 573
[hereinafter EU Treaty]; the Single European Act, 1987 OJ. (L 169) I, 2 C.M.L.R. 741, at http://www.
europa.eu.int/eur-Iexlen/searchlsearch_treaties.htrnl.
43. See GAIT Uruguay Round Agreements Including the Agreement Establishing the World Trade
Organization, April 15, 1994, Annex I A, available at http://www.wto.orglenglishldocs_e1legal_e1legal_
e.htrn.
44. Council Regulation 384/96, supra note 41.
45. Council Regulation 2026/97, supra note 41.
46. Council Regulation 3286/94, supra note 5, at art. 10(4).
Where adverse trade effects are alleged, the Commission shall examine the impact of such
adverse effects on the economy of the Community or of a region of the Community, or on a
sector of economic activity therein. To this effect, the Commission may take into account,
where relevant, factors ofthe type listed in paragraphs I and 2. Adverse trade effects may arise,
inter alia, in situations in which trade flows concerning a product or service are prevented,
impeded or diverted as a result of any obstacle to trade, or from situations in which obstacles
to trade have materially affected the supply or inputs (e. g. parts and components or raw
materials) to Community enterprises. Where a threat of adverse trade effects is alleged, the
Commission shall also examine whether it is clearly foreseeable that a particular situation is
likely to develop into actual adverse trade effects.
Id.
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the complaint,47 However, this period may be suspended at the request, or
with the agreement, of the complainant, to allow the provision of
complementary information, which may be needed to fully assess the validity
of the complainant's cases. 48 When the Commission has concluded its
examination, it must present a report to the TBR Committee. 49 The regulation
states that this should normally be done within five months of initiating the
procedure, although this period can be extended to seven months ifthe matter
examined is sufficiently complex. 50
The Commission's proposals to terminate or suspend the procedure, and
decisions to initiate, conduct, or terminate formal international consultation
or dispute settlement procedures must follow the committee procedure set out
in article 14. 51 Thus, the Commission may adopt decisions and communicate
them to the member States. 52 Unless a Member State refers the matter to the
Council, the decisions will apply after ten days. 53 A qualified majority ofthe
Council can revise the Commission's decisions upon the request ofa Member
State. 54 If the Council does not rule on the Commission's decision within
thirty days, it will be automatically applied.55
On the other hand, the decision to adopt commercial policy measures
must be made by the Council, acting by qualified majority, not later than thirty
working days after receipt of the Commission proposa1. 56 This relatively
47.
48.
49.
ld. at art. 5(4).
ld.
ld. at art. 8(8).
50. ld.
51. ld. at arts. I I (1)-(2)(a), 13(2).
52. ld. at art. 14(3).
53. ld.
54. ld. at art. 14(4).
55. ld. at art. 14(5).
56. ld. at art. 13(3). As ofJanuary I, 1995, a qualified majority requires sixty-two of eighty-seven
votes, divided among the fifteen Member States as follow: France, Germany, Italy, and the United
Kingdom receive ten; Spain receives eight; the Netherlands, Portugal, Greece, and Belgium receive five;
Austria and Sweden receive four; Denmark, Finland, and Ireland receive three; and Luxembourg receives
two. See art. 205 EC Treaty. The weighting, or the votes allocated to Member States in the Council, will
undergo significant changes as preparations are made for enlargement. See CONSOLIDATED VERSION OF
THE TREATY ESTABLISHING THE EUROPEAN COMMUNITY, Dec. 24, 2002,0.1. (C 325); Protocol on the
Enlargement of the European Union, art. 3, available at http://europa.eu.intJeur-lexlenltreaties/datlEC_
consol.htrnl. The Protocol will amend the original treaty on January I, 2005, as follows:
Where the Council is required to act by a qualified majority, the votes of its members shall be
weighted as follows: Belgium 12, Denmark 7, Germany 29, Greece 12, Spain 27, France 29,
Ireland 7, Italy 29, Luxembourg 4, Netherlands 13, Austria 10, Portugal 12, Finland 7, Sweden
10, United Kingdom 29. Acts ofthe Council shall require for their adoption at least 169 votes
in favour cast by a majority of the members where this Treaty requires them to be adopted on
a proposal from the Commission. In other cases, for their adoption acts of the Council shall
require at least 169 votes in favour, cast by at least two-thirds ofthe members. When a decision
is to be adopted by the Council by a qualified majority, a member of the Council may request
verification that the Member States constituting the qualified majority represent at least 62 %
of the total population of the Union. If that condition is shown not to have been met, the
decision in question shall not be adopted.
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heavy decision-making procedure reflects the EC's recognition that retaliation
is a serious step.S7
N. REMEDIES
It is important to note that the essential purpose of regulation 3286/94 is
not to create new substantive remedies, but to set up a procedural framework
through which complaints regarding objectionable commercial practices of
third countries can be channeled. sa Thus, the regulation provides for the
following remedies:
I)
2)
3)
4)
initiation of international consultation or dispute settlement
procedures; S9
acceptance of unilateral measures offered by third countries;60
negotiations between the EC and the third country under
Article 133 of the EC Treaty; or
adoption of commercial policy measures;61 such retaliatory
measures can take the form of:
(a) suspension or withdrawal of any concession
Id. at I(a)(i)-(ii).
57. At first glance, the most remarkable difference between the substantive law of section 301 of
the Trade Act of 1974 and the TBR seems to be that section 30 I provides for mandatory trade retaliation
under certain circumstances (i.e., it obligates the USTR to take retaliatory action). 19 U.S.C. § 2411 (a)
(1988). The rationale behind this legislation is that Congress, given its "festering frustration" with the
Executive's hesitant use of its retaliatory authority, wanted to force the Executive Branch into action.
Presidential Authority to Respond to Utifair Trade Practices: Hearing on Title JJ ofS. 1860 and S. 1862
Before lhe S. Comm. on Fin., 99th Cong., 2d Sess. 64 (1986). In contrast, the TBR provides for broad
discretion of the Commission and of the Council when deciding whether or not to retaliate. Council
Regulation 3286/94, supra note 5, at Preamble.
Whereas it is incumbent on the Commission and the Council to act in respect of obstacles to
trade adopted or maintained by third countries, within the framework of the Community's
international rights and obligations, only when the interests of the Community call for
intervention, and whereas, when assessing such interests, the Commission and the Council
should give due consideration to the views by all interested parties in the proceedings.
Id. However, given the fact that section 301 contains several exceptions to mandatory action, notably the
national economic interest waiver exemption, which allows the USTR not to act even though a certain
foreign trade practice is actionable, the actual outcome is not as different as it first appears to be. See 19
U.S.C. § 241 I(a)(2)(8) (1988); Leirer, supra note I, at 93; Kenneth J. Ashman, The Omnibus Trade and
Competitiveness Act of 1988-The Section 301 Amendments: Insignificant Changes from Prior Law?, 7
B.U.INT'L L.J. 115,141, 146 (1989) (suggesting that the introduction of mandatory retaliation in 1988
"-while posited in bold language-i:hange[d] little from prior law").
58. See Council Regulation 3286/94, supra note 5, at Preamble.
Whereas this mechanism aims to provide procedural means to request that the Community
institutions react to obstacles to trade adopted or maintained by third countries which cause
injury or otherwise adverse trade effects, provided that a right ofaction exists, in respect ofsuch
obstacles, under applicable international trade rules. Id.
59. Id. at art. 12(2).
60. Id. at art. II.
61. Id. at art. 12(3).
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resulting from commercial policy negotiations;
(b) an increase in existing custom duties or the
introduction of any other charge on imports;
(c) introduction ofquantitative restrictions or any other
measures modifying import or export conditions or
otherwise affecting trade with the third country
concerned. 62
In cases (2) and (3) the procedure will be suspended.63 In case (4), when
the EC's international obligations require the prior discharge of an
international procedure for consultation or for the settlement of disputes,
commercial policy measures shall be decided upon only after such procedure
has been terminated, and the results of the procedure have been taken into
account. 64 When the EC has requested an international dispute settlement
body to indicate and authorize the measures that are appropriate for the
implementation ofthe results ofan international dispute settlement procedure,
the EC's commercial policy measures, which may be needed in consequence
of the authorization, shall be in accordance with the recommendation of the
international dispute settlement body.6'
Furthermore, article 12(1) contemplates the possibility ofdirect resort to
commercial policy measures in clear-cut situations, that is, without going
through the Community examination procedure.66
V. JUDICIAL REVIEW
The judicial review regime remains unchanged. The TBR is meant ''to
ensure the exercise ofthe Community's rights under international trade rules,
in particular those established under the auspices of World Trade
Organization."67 In many cases the EU institutions will be called upon to
interpret WTO rules at the request of private entities.
Should the institutions give an interpretation that differs from that ofthe
private complainants, or take decisions that are otherwise disagreeable to
62.
63.
ld.
ld. at art. 11.
64. ld. at art. 12(2).
65. ld.
66. ld. at art. 12(1).
Where it is found (as a result of the examination procedure, unless the factual and legal
situation is such that an examination procedure may not be required) that action is necessary
in the interests of the Community in order to ensure the exercise of the Community's rights
under international trade rules, with a view to removing the injury or the adverse trade effects
resulting from obstacles to trade adopted or maintained by third countries, the appropriate
measures shall be determined in accordance with the procedure set out in Article 13.
[d. (emphasis added).
67. ld. at art. 1.
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complainants, it is to be expected that the European Courts will be asked to
review these administrative actions. The question of whether the refusal of
the Commission to initiate an examination procedure can be reviewed by the
E.C.J., and ifyes, to what extent, was answered in several cases. 68 All ofthem
dealt with complaints of the EEC Seed Crushers' and Oil Processors'
Federation ("Fediol"). The first Fediol case ("Fediol I") dealt with the refusal
of the Commission to open an anti-subsidy proceeding with regard to the
imports of soybean oil cakes from Brazil. 69 As the relevant provisions of the
TBR are mainly modeled after the respective provisions of the antisubsidy/anti-dumping regulation,7o the rules established in Fediol I by the
E.C.J. with respect to the anti-subsidy regulation can also be applied to cases
involving the TBR,7\ The court stated:
[T]he Regulation recognizes the existence of a legitimate interest on the part
of the Community producers in the adoption of anti-subsidy measures and
that [the regulation] defines certain specific [procedural] rights in their
favour, namely the right to submit to the Commission all evidence which they
consider appropriate, the right to see all information obtained by the
Commission subject to certain exceptions, the right to be heard at their
request and to have the opportunity ofmeeting the other parties concerned in
the same proceeding, and finally the rightto be informed if the Commission
decides not to pursue a complaint. 72
From these facts, the E.C.J. concluded that complainants have a right to
bring an action before the E.C.J. if it is alleged that one of the abovementioned procedural rights has been violated by the Commission. 73
However, the court did not limit judicial review to an alleged infringement of
these procedural rights. It also acknowledged a right to bring an action in
cases in which it is claimed that the Commission has committed manifest
errors in its assessment ofthe facts, has omitted to take into consideration any
essential matters of such a nature as to give rise to a belief in the existence of
an illicit commercial practice or has based the reasons for its decisions on
considerations amounting to a misuse of power. 74
Thus, because the E.C.J., to a certain extent, can also review
discretionary decisions of the Commission, the fact that the Council inserted
68. Case 191/82, EEC Seed Crushers' & Oil Processors' Fed'n (Fediol) v. Comm'n, 1983 E.C.R.
2913; Case 188/85, EEC Seed Crushers' & Oil Processors' Fed'n (Fediol) v. Comm'n, 1988 E.C.R. 4139,
'IJ 6; Case 70/87, EEC Seed Crushers' & Oil Processors' Fed'n (Fediol) v. Comm'n, 1989 E.C.R. 1825.
69. Fedio/, 1983 E.C.R. at'll 3.
70. See Council Regulation 384/96, supra note 41; Council Regulation 2026/97, supra note 41.
71. See Elisabeth Zoller, Remedies for Unfair Trade: European and United States Views, 18
CORNELL INT'L LJ. 227, 233 (1985).
72. Fedio/, 1983 E.C.R. at' 25.
73. Id.' 28.
74. Id.' 30.
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the term "necessary in the Community interest,"7S when drafting the TBR does
not hinder judicial review of the Commission's decisions whether or not to
initiate an investigation. 76 Yet, at the same time the E.C.J. held in Fedio/ I:
Whilst it is true that the Commission, when exercising the powers assigned
to it ... is under a duty to establish objectively the facts concerning the
existence of subsidisation practices and of injury caused thereby to
community undertakings, it is no less true that it has a very wide discretion
to decide, in terms of the interests of the Community, any measures needed
to deal with the situation which it has established. 77
This interpretation of the ability to review discretionary decisions was
reaffirmed in Fedio/ II,78 when the E.C.J. held "that, even though discretion
has been conferred on the Commission in the matter at issue, the court is
required to verify whether or not" the Commission used its discretion in a
correct way.79 The criteria used in this test were the same as those mentioned
in Fedio/ /.80
Finally in Fedio/ III, one precedent ofjudicial review under the NCPI,81
the E.C.J. extended the scope ofjudicial review with regard to decisions ofthe
Commission and whether or not to initiate an investigation. 82 PlaintiffFediol
tried to attack a decision ofthe Commission83 that rejected a complaint lodged
by Fediol, in which Fediol requested an examination procedure with regard to
certain commercial practices ofArgentina concerning the export ofsoy cake. 84
Fediol argued that the Commission, when characterizing the Argentinean trade
practices as being in conformity with the GAIT, interpreted the GAIT
incorrectly.8s The Commission claimed that the action was unfounded
75.
76.
77.
78.
Council Reg. 3286/94, supra note 5, at art. 8.1.
Bronckers, supra note 4, at 742.
Fedio/, 1983 E.CR at 'If 26.
Case 188/85, EEC Seed Crushers' & Oil Processors' Fed'n (Fediol) v. Comm'n, 1988 E.C.R.
4193.
79. Id. 'V 6.
[Elven though a discretion has been conferred on the Commission in the matter at issue, the
Court is required to veritY whether or not it has observed the procedural guarantees granted to
complainants by the Community provisions in question, has committed manifest errors in its
assessment of the facts, has omitted to take into consideration any essential matters of such a
nature as to give rise to a beliefin the existence ofsubsidization or has based the reasons for its
decision on considerations amounting to a misuse of powers.
Id.
80. Id; see Case 264/82, Timex Corp. v. Council &Comm'n, 1985 E.C.R. 849, 866 (demonstrating
that the E.C.J. also referred to the criteria mentioned in Fedio/ I).
81. Council Regulation 2641/84, supra note 3.
82. Case 70/87, EEC Seed Crushers' & Oil Processors' Fed'n (Fediol) v. Comm'n, 1989 E.C.R.
1825, 'V 24.
83. Unfortunately, the European Commission never published this decision.
84. Fedio/, 1989 E.C.R. at mI 4-6.
85. [d. 'If II.
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because Fediol was not permitted to put forward submissions questioning the
Commission's interpretation ofthe GAIT. 86 The E.C.J. did not agree with the
Commission, and in a rather apodictic way it held that complainants
in proceedings before the Court, [can] rely on the provisions of the GATT in
order to obtain a ruling on whether conduct criticized in a complaint lodged
under Article 3 of Regulation No 2641/84 constitutes an illicit commercial
practice within the meaning of that regulation .... [Therefore] economic
agents are entitled to request the Court to exercise its powers of review over
the legality of the Commission's decision applying [GATT] provisions. S?
The court might have felt that such interpretations were inspired not just
by legal considerations, but also by diplomacy and domestic politicking.
While not being so explicit, the Commission had certainly urged the court not
to enter into GAIT law. 88 It reminded the court of its case law denying direct
effect to the GAIT. 89 The court seemingly ignored this complication. 90 It
dryly observed that the Commission had refused to investigate Fediol's
complaints solely on the grounds that it did not agree with Fediol's legal
arguments, not because ofa lack ofCommunity interest. 91 Thus, the court did
not deduce from this margin ofadministrative discretion any limitations on its
judicial review of GAIT law. 92
Furthermore, the court ruled that it could review the Commission's
GATT interpretations, notwithstanding its case law on "direct effect. ,,93 The
NCPI specifically allowed private complaints to rely on GAIT principles,
which therefore were open tojudicial review. 94 Since only practices offoreign
governments were tested against GAIT principles in NCPI investigations, the
court may have considered judicial review of administrative GAIT
interpretations more palatable. 9s
As a result of the three Fediol cases discussed above, a petitioner can
attack a refusal by the Commission to initiate an examination for the following
Jd., 13.
Jd." 19,22.
Jd., 18.
Jd.
Jd.1 19.
Jd.
Jd. '22.
93. Jd.
94. Jd.
Since Regulation No. 2641/84 entitles the economic agents concerned to rely on the GAIT
provisions in the complaint which they lodge with the Commission in order to establish the
illicit nature ofthe commercial practices which they consider to have harmed them, those same
economic agents are entitled to request the Court to exercise its powers of review over the
legality of the Commission's decision applying those provisions.
86.
87.
88.
89.
90.
91.
92.
Jd.
95.
Jd.
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three main reasons: (1) the Commission violated the petitioner's procedural
rights (Fediol/);96 (2) the Commission misused its discretionary power when
detennining whether the opening ofan investigation was in the "interest ofthe
Community" (Fediol I and 1/);97 and (3) the Commission incorrectly interpreted the tenn "obstacles to trade" (FediolII/).98 However, it should be noted
that although the court will review discretionary decisions ofthe Commission,
this judicial review will not provide the complainant with much assistance
because it is highly unlikely that the court will find a misuse of discretion. 99
Rather, the E.C.J. explicitly acknowledged that the Commission had "a very
wide discretion to decide, in tenns of the interests of the Community, any
measures needed to deal with the situation."loo Therefore, unsuccessful
petitioners could not confidently rely upon the court's review ofaction by the
Commission under Council Regulation 2641/84. 101 The Fediol cases are still
relevant for practice under the TBR. However, there has not been a court
challenge filed against a TBR decision of the Commission. 102
Finally, given that the interests affected by the TBR are likely to be
diverse, it is noteworthy that not all potentially affected parties may have a
sufficient interest to claim standing to sue the EU authorities before the
European courts. Take, for instance, the example ofEuropean exporters who
are threatened with exclusion from government procurement contracts by a
third country that faces retaliatory measures by the EU following a TBR
investigation. 103 Given current case law, it is doubtful that these exporters
would have the standing to request annulment of EU retaliatory measures
imposed by either a decision or a regulation, under Article 230(4) EC
Treaty"04 Contrary to what the E.C.J. stipulates for privileged litigants,
natural and legal persons have, in effect, very limited standing to bring an
96. Case 191/82, EEC Seed Crushers' & Oil Processors' Fed'n (Fediol) v. Comm'n, 1983 E.C.R.
2913, m129·30.
97. {d.' 30-31; Case 188/85, EEC Seed Crushers' & Oil Processors' Fed'n (Fediol) v. Comm'n,
1988 E.C.R. 4193,1141.
98. Fediol, 1989 E.C.R. at 1781.
99. Fediol, 1988 E.C.R. at 114.
100. Fediol, 1983 E.C.R. at 1 26.
101. Appleton, supra note 27, at 261.
102. See Leirer, supra note I, at 95. With regard to judicial review, the differences between
European law and section 301 of the Trade Act of 1974 seem important. {d. According to Leirer, an
American petitioner whose complaint was rejected by the USTR, or an importer whose business suffers
from an increase in duties on certain foreign products resulting from retaliatory action, are barred from
attacking the decisions ofthe USTR in the courts under the political question doctrine. Jd. However, Leirer
adds, quoting Balcer v. Carr, that though courts are normally very hesitant in reviewing decisions of the
Executive involving foreign affairs, "it is error to suppose that every case or controversy which touches
foreign relations lies beyond judicial cognizance." 369 U.S. 186,211 (1962).
103. Given that few countries currently are part to the wro Agreement on Government Procurement
(GPA), the third country threat may be consistent with its international obligations.
104. See generally GEORGE A. BERMANNET AL., CASES AND MATERlALSON EUROPEAN UNION LAW,
137-44 (2d. ed. 2002) (discussing a private party's standing to seek judicial review under article 230 ofthe
ECTreaty).
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action for annulment ofan act adopted pursuant to a regulation or directed at
another person, because the individual is required to demonstrate that the
measure "is of direct and individual concern to the former."lOs
Direct concern simply requires that the contested Community act directly
affect the individual's legal situation and that it leave no discretion to the
addressees entrusted with the act's implementation, the implementation being
purely automatic and resulting exclusively from Community regulations
without the application of any intermediate rules. 106 Individual concern
requires not only that the act's addressees comprise a closed category, but it
is equally as important that within this category the applicant be distinguished
by particular circumstances in relation to the object of the act (Le., the
circumstance that allows differentiation of the act's addressees in some way
lead to the institution's intervention).lo7 This situation constitutes the very
105. EC TREATV, supra note 42, at art. 230. The EC Treaty distinguishes indeed between privileged
plaintiffs (the European Commission, the Council of the European Union, and after the Nice Treaty, the
European Parliament) that can institute a judicial review procedure without any condition and the nonprivileged plaintiffs. See id. Non-privileged plaintiffs are divided into two groups; the first are the
institutional plaintiffs (the European Central Bank and the European Court of Auditors), for which a
proceeding must be for the purpose ofsafeguarding their prerogatives. ld. (''The Court ofJustice shall have
jurisdiction under the same conditions in actions brought by the Court ofAuditors and by the ECB for the
purpose ofprotecting their prerogatives.") The second group that article 230 ofthe EC Treaty distinguishes
are natural or legal persons who must always demonstrate an interest in exercising the action. ld. ("Any
natural or legal person may, under the same conditions, institute proceedings against a decision addressed
to that person or against a decision which, although in the form of a regulation or a decision addressed to
another person, is of direct and individual concern to the former.") The E.C.J. has addressed the concept
ofa legal person. See Case 135/81, Groupement des Agences des voyages v. Comm'n, 1982 E.C.R. 3799.
106. Case C-386/96 P, Societe Louis Dreyfus &Cie v. Comm'n, 1998 E.C.R.I-2309,' 43; Joined
CasesT-198195T-I71196, T-230197, T-174/98, T-255I99,ComafricaSpav. Comm'n,2001 E.C.R. 11-1975,
, 96. Normally, this wilt be the case ofRegulation "directly applicable in all Member States." EC TREATY,
supra note 42, at art. 249. However, this will not be the case in a directive, which needs national measures
to the transposition in national legal orders. See id. According to article 249 of the EC Treaty, "[a]
directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed,
but shall leave to the national authorities the choice ofform and methods," unless it constitutes a concealed
decision. Jd., see, e.g., Joined Cases T-172/98, T-175/98 to T-177/98, Salamander AG v. Parliament &
Council, 2000 E.C.R. 11-2490. In Salamander AG, the applicants were companies with interests in tobacco
related industries (because they had a monopoly on tobacco advertisements or produced products, such as
shoes and clothing, using the brand names of tobacco products) who sought annulment on a directive
containing a ban on tobacco advertisements and sponsoring. See Salamander AG, 200 E.C.R. 11-2490, mI
2-7. The Court of First Instance held,
Even if it were possible-contrary to the wording of the fourth paragraph of Article 173
[actually article 230 of the EC Treaty]-for directives to be assimilated to regulations so that
an action challenging a decision adopted in the form of a directive might be admissible, in the
present case the Directive does not constitute a disguised decision and does not contain specific
provisions which have the character of an individual decision as regards the applicants.
ld. , 28. The applicants failed in their action because they were not directly concerned by the directive and
thus did not fulfill the first requirement for standing in article 230 EC Treaty. ld. ft 52-71, 79.
107. See Case 11/82, SA Piraiki-Patraiki v. Comm'n, 1985 E.C.R. 207,'11' 11-32; Case C-152/88,
Sofrimport v. Comm'n, 1990 E.C.R.I-2477, ~ 11-13; Case C·358/89, Extramet Industrie SA v. Council,
1991 E.C.R. 1-2501, '11'1113-18. However, the E.C.J. has accepted that there may be situations where a
regulation can be considered a decision in respect to an applicant because of the exceptional attributes of
that applicant, while continuing to be a normal regulation in respect to others. See Case C-309/89,
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purpose of the act, hence the causal link between the institution's knowledge
of the applicant's situation and the adopted measure.
This narrow interpretation of the individual concern condition was
developed by the E.C.J. in the Plaumann case. 108 In this case, a German
importer of c1ementines sought to have a Commission decision annulled that
prohibited Germany from exempting German importers of c1ementines from
import duties. 109 While this decision was of vital interest to importers of
clementines, it was held that these importers lacked individual concern. liD The
E.C.J. held as follows:
Persons other than those to whom a Decision is addressed may only claim to
be individually concerned if that Decision affects them by reason of certain
attributes which are peculiar to them or by reason ofcircumstances in which
they are differentiated from all other persons and by virtue of these factors
distinguishes them individually just as in the case ofthe person addressed. I II
The E.C.J.' s definition requires proof of affiliation with a closed category of
people affected by a decision in a way that is so much different from others
who may be affected as well, that it amounts to the contested decision being
similar to a decision directly addressed to the applicant. 112 This is an
extremely rigid requirement by itself, and the E.C.J.'s decision goes on to
explain that the closed, abstract group of affected individuals may not be
subject to a potential addition ofnew group members at any time in the future,
even if it is unlikely to happen:
In the present case the applicant is affected by the disputed Decision as an
importer of clementines, that is to say, by reason of a commercial activity
which may at any time be practised [sic] by any person and is not therefore
such as to distinguish the applicant in relation to the contested Decision as in
the case of the addressee.t 13
Applying the Plaumann-test in this manner leads to the result that, even ifthe
number of people actually affected by an act is known, an action for
annulment will still not succeed if, in the E.C.J.'s opinion, a possibility of
someone else becoming similarly affected exists. I 14 The admissibility of an
action for annulment of an act of seemingly general scope is even more
Codomiu v. Council, 1994 E.C.R.I-1853, "19-22.
108. See Case 25/62, Plaumann & Co. v. Comm'n, 1963 E.C.R. 95.
109. Id.
IIO. Id.
Ill. Id.1107.
112. See id.
II3. Id.
114. See id.
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difficult. IIS The applicant will have to show that the act at issue, though taken
in the fonn of a regulation (or arguably, a directive), is an act of individual
scope. 116
In response to actions submitted by economic operators whose
professional activity has been affected by an act of general application, the
Community Court detennines whether the applicant's situation is individually
concerned within the contested act. IJ7 The Community Court then declares
the general inadmissibility ofthe action based on the fact that the applicant is
not individually affected by its provisions other than by means ofthe objective
quality of his occupation in a certain area or region; in other words, the
applicant is comparable to any other economic operator currently in an
identical situation or that may be in the future. 118
The classic cases distinguish addressees individually, such as those that
make reference to regulations comprised ofa bundle ofindividual decisions, 119
regulations with retroactive effects, 120 acts which incorporate an institution's
knowledge of the applicant's particular situation,121 situations in which the
applicant's individual interest is deduced from certain procedural rules l22 or
from an obligation that the institution that authored the act had to consider the
applicant's specific situation in accordance with a higher rule of law. 123 But,
115. This difficulty in proving the existence of an individual interest is reinforced by the fact that
the E.C.J. has frequently replaced this examination with one that examines the nature and the content of
the act, admitting the annulment proceeding only if the Regulation is equivalent in fact to a concealed
decision. This has equipped the E.C.J. with a means ofadditional control and has randomized the case law
on the admissibility of this proceeding. In the opinion of Angela Ward, this question has never been
absolutely clear. ANGELA WARD, JUDICIAL REVIEW AND THE RIOHTS OF PRIVATEPART1ES \NEC LAw, 212
(2000). Case law has oscillated between cases in which the court confines its analysis to whether the
Regulation at issue directly concerns the individual plaintiff and not whether the case equivalent to a
concealed decision. Compare Case 156/87, Gestetner Holdings v. Council & Comm'n, 1990 E.C.R. 1-781
(failing to consider whether or not it is a decision), with Case 264/82, Timex v. Council & Comm'n, 1985
E.C.R.849.
116. See Case 11/82, Piraiki·Patraiki v. Comm'n, 1985 E.C.R. 207, ft 11-32; Case C-152/88,
Sofrimport v. Comm'n, 1990 E.C.R. 1-2477, '1111-13; Case C-358/89, Extramet Industrie SA v. Council,
1991 E.C.R. 1-2501,11' 13-18.
117. See generally Tim Corthaut, Case CFI May 3, 2002, Jego-Quere v. Comm 'n, T-ln/Ol and
C-50/00 P ECJ July 25, 2002, union do Pequenos Agricultores v. Council, 9 COLUM. J. EUR. L. 141
(2002).
118.
119.
See generally id.
See Case 138/79, Roquette v. Council, 1980 E.C.R. 3333; Case 139/79, Maizena v. Council,
1980 E.C.R. 3393; Case C-354/87, Weddel v. Comm'n, 1990 E.C.R. 1-3847; Joined Cases 87, 130/77,
22/83,9 and 10/84, Vittorio Salerno v. Comm'n, 1985 E.C.R. 2523.
120. See Case 100/74, CAM SA v. Comm'n & Council, 1975 E.C.R. 1417; Case 112/77, TOpfer
v. Comm'n, 1978 E.C.R. 1019.
121. See Joined Cases 239/82 & 275/82, Allied Corporation v. Comm'n, 1984 E.C.R. 1005; Case
121/77, Nachi Fujikoshi v. Council, 1979 E.C.R.1363; Case 264/82, Timex v. Council & Comm'n, 1985
E.C.R.849.
122. See Case T-96/92, GrandesSources v. Comm'n, 1995 E.C.R. I1-1213;Joined CasesT-528, 542,
543 & 546/93, Metropole Television v. Comm'n, 1996 E.C.R. 11-649.
123. See Case 11/82, Piraiki-Patraiki v. Comm'n, 1985 E.C.R. 207, "1111-32; Case C-152/88,
Sofrimport v. Comm'n, 1990 E.C.R. 1-2477, ft 11-13; Joined Cases T-480 & 483/93, Antillean Rice Mills
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the court has sometimes shown sensitivity to the need for adopting solutions
that observe the principle ofeffective judicial protection. In lieu ofa thorough
exploration of this tendency, we may attribute one of its manifestations to
Parti Ec%giste 'Les Verts' v. Parliament, in which the E.C,J. acknowledged
a political party's legal standing for the purpose of avoiding inequality of
judicial protection between different parties that participated in the European
parliamentary elections. 124 In the name of that principle, this judgment
voluntarily departs from traditional case law criteria relating to the
admissibility of actions for annulment brought by individuals, ignoring the
Plaumann case law in its legal reasoning. 125
This tendency has recently reemerged in the form of acknowledgment
that the applicant is distinguished individually because his competitive
position in the market has been affected. The court agreed to evaluate the
admissibility of the individual's action for annulment, not so much as an
evaluation of the nature of the contested act, but regarding the effects it has
on the applicant's situation. 126 In Extramet and Codomiu, this approach was
followed as a basis for the admissibility of actions for annulment. 127 In the
Extramet opinion, Advocate General Jacobs set out in great detail the
difficulties that a company would encounter ifit were to contest the regulation
via national legal remedies. 128 The national court would then make reference
to the E.C.J. for a preliminary ruling. 129 The Advocate General pointed out
that article 230(4) of the EC Treaty should be interpreted in a way that
v. Comm'n, 1995 E.C.R. 11-2305. However, in the appeal ofAntillean Rice Mills, the E.C.J. rejected the
standing of the plaintiff, in spite of the fact that its facts were similar to the facts of Piraiki-Patralki. See
Case C-451/98, Antillean Rice Mills v. Comm'n, 2001 E.C.R.1-8949.
124. Case 294/83. Parti Ecologiste 'Les Verts' v. Parliament, 1986 E.C.R. 1339.
125. Jose Carlos Moithino de Almeida, Individuals Locus Standing Annulment Proceeding: New
Reflections About the Expression "Individual Concern, "Nomos, Baden-Baden, 849, 865 (1995) (stating
that this case can be integrated into the field of the protection of human rights). Nevertheless, although it
could be true that the E.C.J. adopted an agreed solution in this case with the principle ofeffective judicial
protection, it was more likely that the E.C.J. was safeguarding the democracy principle on which the
Community is based. in an attempt to commit all the political parties to equal conditions to the elections.
The court's holding that the safeguarding ofthe democracy principle is the determining element in deciding
whether a party is individually concerned was subsequently affirmed. Case T-135/96, UEAPME v.
Cornm'n, 1998 E.C.R. 11-2335.
126. Case 169/84, Cofaz v. Comm'n, 1986 E.C.R. 391. In Co/oz. the plain1iffopposed the legality
of a Decision of the Commission, which considered an aid of general character compatible with the
Common Market. Jd. The E.C.J. agreed that the standing of the plaintiff was based on the position of the
plaintiff in the market, which was substantially affected by the aid at issue. Jd.
127. See Case C-358/89, Extramet v. Comm'n, 1991 E.C.R. 1-2501; Case C-309/89, Codorniu v.
Council, 1994 E.C.R. 1-1853.
128. See Opinion of Advocate General Jacobs in Extramet, 1991 E.C.R. 1-2501, 31-74.
129. Id. " 71-74. The Advocate General indicated that the alternative procedure before the national
tribunal, directly proceeding before the Court of Justice, had serious disadvantages for the importer in an
antidumping context, not only because of the lack ofexperience of these tribunals but also by the absence
ofparticipation in the national procedure ofthe Council and the Commission. Id.' 71. Advocate General
Jacobs added that it was probable that the resolutions of these tribunals lacked of uniform character that
could be reached by a resolution of the E.C.J. Jd.
n
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upholds the general principle of the right to effective judicial protection,
which led him to hold the action admissible. 130 In his opinion in Cordorniu,
Advocate General Lenz clearly asserted that the capacity of individuals to
bring actions established by article 230(4) of the EC Treaty constitutes a
guarantee of individual judicial protection, adding that a declaration of
inadmissibility could give rise to infringement of the applicant company's
judicial protection. 131 In both decisions, the court refrained from referring
directly to the difficulties of the process in relation to national courts, but
when it discussed the actions in both cases, the court implicitly provided a
solution in accordance with the principle of effective judicial protection. 132
The court took what had been its case law until that time in a new direction by
acquiescing to examine the special relationship that existed between the
applicant's situation and the contested measure, placing a broad interpretation
of individual interest above the contested Act's regulatory nature.
It is nevertheless true that subsequent case law confirms that the solutions
adopted in these cases are not easily extrapolated and that a purely factual
circumstance affecting the applicant is not sufficient to distinguish her
individually.133 That truism does have an exception in the extreme hypothesis
in which the interested party's case is so extraordinary as to be no less than
unique because she displays a particular characteristic that distinguishes her
from any other person, such as the need to guarantee her the benefit of a
particular protection or enjoyment of any particular right within her legal
tradition. 134
From this brief examination of case law, it is apparent that although the
E.C.J. and the Court of First Instance (CFI) remain loyal to their restrictive
approach in general terms, both jurisdictions have at times made an effort to
create solutions that observe the principle of effective judicial protection.
Yet, it is certainly true that those solutions have been influenced by factual
circumstances and the environments in which the different disputes
developed. 13S As a result the conceptual framework ofthe Plaumann case law
Id. ~, 33, 75.
Case C-309/89, Codomiu, 1994 E.C.R. 1-1853, .. 25.
132. Extranet, 1991 E.C.R.I-250I, ~ 1-18; Codorniu, 1994 E.C.R. 1-1853, ~ I.
133. See Case T-597/97, Euromin v. Council, 2002 E.C.R. 11-2419, .. 50; Case T-598/97, British
Shoe Corp. Footwear Supplies and Others v. Council, 2002 E.eR. 11-1155, ft 61-62. Although these cases
displayed numerous similarities with Extramet case, the Court of First Instance did not admit the action
because the plaintiffs did not prove that opposed regulation substantially affected its competitive position
in the market. Euromin, 2002 E.eR. 11-2419, ~ 49; British Shoe Corp., 2002 E.C.R. 11-1155,' 40.
134. See Joined Cases T-32 & 41/98, Nederlandse Antillen v. Comm'n, 2000 E.C.R. 11-201, ~ 56;
Cases T-13/99, Pfizer Animal Health v. Council, 2002, E.C.R. 11-3305; and T-70/99, A1pharma v. Council,
2002 E.C.R. 11-3495, ~~ 73-98 (accepting the plaintiffs standing on the grounds that the plaintiff enjoys
a legally protected position and that the specificity of its situation offact or law materialized because these
companies were beneficiaries ofspecial procedural guarantees within the framework of the opposed act).
135. Paul Craig, Legality, Standing and Substantive Review in Community Law, OXFORD J. LEGAL
STUD., 507, 524-25 (1994) (stating that the reason the E.C.J. has been more liberal in some scopes than in
others is fundamentally due to the matter involved in each case and emphasizing that in scopes like the
130.
131.
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has been broadened to the point of putting its limits in doubt. The result ofall
this is a jurisprudence that offers no clarity whatsoever yet displays a high
level of complexity.
VI. WHAT ABOUT COMMUNITY INTEREST?
The new TBR has retained the early Community interest test. 136 The
Commission must still determine that in the interests ofthe EU it is necessary
to open an investigation.137 Ifthe Commission refuses to open an investigation
on the grounds that it disagrees with the plaintiff's interpretation of
international economic law, no reason exists to assume that the European
courts would not test the Commission's interpretation ofWTO and other legal
obligations. The recent judgments, in which the court refused to review EU
measures against WTO principles at the request of private litigants and even
at the request of a Member State, do not change this. 138
However, ifthe Commission were to refuse to investigate a complaint on
the grounds that this was somehow contrary to the Community interest, the
courts would exercise more restraint in their judicial review. The court's
traditional formula is that judicial review of the Community interest in trade
policy proceedings "must be limited to verifying whether the relevant
procedural rules have been complied with, whether the facts on which the
choice is based have been accurately stated[,] and whether there has been a
manifest error of appraisal or a misuse of powers.,,139
It is not easy to conceive of political factors that would militate against
an investigation of an injurious trade practice ofa third country that arguably
illegal. Expressed differently, can one conceive of any circumstances in
which the violation of an international agreement by a third country does not
merit a full internal investigation by the EC?
Yet as the TBR investigation continues, further actions by the
Commission and ultimately the Council may become more and more sensitive.
In each of the different steps taken by EU authorities, the Community's
Common Agricultural Policy, the E.C.J. declines to admit annulment proceedings, so that the plaintiffs
resort to the national tribunals).
136. See Council Regulation 2641/84, supra note 3, at art. 10(1); Council Regulation 3286/94,
supra note 5, at art. 8(1).
137. See id.
138. CasesC-27 and I22/00, Omega Air, 2002 E.C.R. 1-2569;CaseC-491/0I, British Am. Tobacco,
2002 E.C.R. 1-11453; Case C-377/98, Netherlands v. Parliament & Council, 2001 E.C.R. 1-7079; Case C301/97, Netherlands v. Council, 200 I E.C.R. 1-8853; Joined cases Case C-89199, Schieving-Nijstad, 200 I,
E.C.R. 1-585 I; Joined cases C-300/98 and C-392/98, Parfums Christian Dior & Assco GerDste, 2000,
E.C.R. 1-11307; Case C-149/96, Portugal v. Council, 1999 E.C.R. 1-8395; Case 39/75, Douaneagent der
NV Nederlandse Spoorwegen v. Inspecteur der Invoerrechten en Accijnzen, 1975 E.C.R. 1439; Case 9/73,
Schluter v. HZA Lorrach, 1973 E.C.R. 1135; Case 41-44/70, Int'I Fruit Co. NV v. Comm'n, 1971 E.C.R.
412.
139. Case C-174/87, Ricoh v. Council, 1992 E.C.R. 1-1335,' 68.
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interest will have to be taken into account. For example, the EU had to
consider the Community's interest when it made the decision to initiate WTO
dispute settlement proceedings and also when it made the decision to ask for
authorization from the WTO Dispute Settlement Body to take retaliatory
measures in case the defendant country that was found to have engaged in
illegal practices refuses to comply voluntarily with a WTO Panel Decision. 140
How the EU institutions will balance the various Community interests,
such as foreign policy considerations, effects on the export position of other
EU industries in an angry defendant country, and effects of retaliatory
measures on EU consumers, remains to be seen. Contrary to the antidumping
regulation,141 the TBR does not spell out priorities on how the competing
interests should be balanced. 142
Admittedly, the Community authorities enjoy substantial discretion at
this point. This discretion allows them to evaluate factors such as
"Community interests" which can be unrelated to the merits of the petition.
Such discretion, however, does not necessarily barjudicial review. Certainly
this discretion would reduce the margins of the Court's review in that the
Court will only consider whether the Community authorities have infringed
basic principles of administrative due process. "Even though these margins
are small, the exposure engendered by any kind ofjudicial review may well
exert some restraining influence on administrative behaviour."'43
140. See Final Act Embodying the Results ofthe Uruguay Round ofMultilatera1 Trade Negotiations,
Apr. IS, 1994, WTO Understanding on Rules and Procedures Governing the Settlement of Disputes
[hereinafter DSUl, Annex 2, in LEGAL INSTRUMENTS-REsULTS OFTHE URUGUAY ROUND, 33 I.L.M. 1125
(1994).
141. See Council Regulation 384/96, supra note 41, at art. 21.
A determination as to whether the Community interest calls for intervention shall be based on
an appreciation of all the various interests taken as a whole, including the interests of the
domestic industry and users and consumers and a determination pursuant to this Article shall
only be made where all parties have been given the opportunity to make their views known ....
In such an examination, the need to eliminate the trade distorting effects of injurious dumping
and to restore effective competition shall be given special consideration. Measures, as
determined on the basis of the dumping and injury found, may not be applied where the
authorities, on the basis of all the information submitted, can clearly conclude that it is not in
the Community interest to apply such measures.
Id.
142. Council Regulation 3286/94, supra note 5. "As a matter of principle, it would seem that an
examination of an illicit and injurious foreign trade practice is necessarily in the Community interest. n
Bronckers, supra note 4, at 742.
143. Bronckers, supra note 4, at 745-46. In the FedioI I judgment, the E.C.J. related the scope of
judicial review to the nature of the powers reserved to the Community institutions on the subject, stating:
Furthermore it must be acknowledged that, in the spirit of the principles which lie behind
Articles 164 and 173 ofthe Treaty, complainants have the right to avail themselves, with regard
both to the assessment ofthe facts and to the adoption ofthe protective measures provided for
by the Regulation, of a review by the court appropriate to the nature ofthe powers reserved to
the Community institutions on the subject.
Case 191/82, EEC Seed Crushers' & Oil Processors' Fed'n (Fediol) v. Comm'n, 1983 E.C.R. 2913,129.
Accordingly, where the Community authorities enjoy substantial discretion, the scope ofjudicial review
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VII.
TRADE BARRIERS REGULATION: THE MOST EFFECTIVE INSTRUMENT?
The TBR was intended to be a more effective instrument than NCPI. 144
To begin with, one can point to a number of improvements in the TBR. It has
facilitated access of individual companies to the WTO dispute settlement
process, though at a price, because no exporter alone, nor the Community
industry, can rest a complaint on a bilateral trade agreement between the EU
and a third country. 143 Judicial review, in two instances before the European
courts, of any administrative decisions they take under the TBR is likely to
encourage a more careful decision-making process by the EU institutions. 146
The Commission's recent decisions have made the TBR process much more
transparent by putting its investigation and progress reports on the internet,
which is of considerable interest to complainants and the European industry
at large. 147
At the same time, it has to be recognized that the principal improvement
was and remains due to an external factor, the strengthening of the WTO
dispute settlement procedure. 148 Because the NCPI remained within the GATT
framework, the NCPI's effectiveness ultimately depended on the effectiveness
of the GAIT dispute settlement. On the whole, the record of GAIT dispute
settlement has been described as an integrated system, characterized by a
compulsory and binding nature with a stringent time-scale, which is used to
set deadlines for all major steps in the procedure. 149
diminishes correspondingly. Id. The court could still inquire, though, whether the Commission, in
discontinuing an investigation, had committed manifest errors of fact, had failed to take into account
essential matters, or had arrived at its decision through an abuse of power, which would be reflected in its
reasoning. Id. 'V 30.
144. See Council Regulation 3286/94, supra note 5, at Preamble. The TBR explicitly states that
"the approach followed in [the NCPI] has not proved to be entirely effective." Id.
145. Id. at art. 4.1.
Any Community enterprise, or any association, having or not legal personality, acting on behalf
ofone or more Community enterprises, which considers that such Community enterprises have
suffered adverse trade effects as a result ofobstacles to trade that have an effect on the market
of a third country may lodge a written complaint. Such complaint. however. shall only be
admissible ifthe obstacle to trade alleged therein is the subject ofa right ofaction established
under international trade rules laid down in a multilateral or plurilateral trade agreement.
Id. (emphasis added).
146. See Case 70/87. EECSeedCrushers' &OilProcc:ssors' Fed'n(Fediol)v. Comm'n, 1989 E.C.R.
1781.
147. See Market Access Database, The Guide to Cracking World Markets, at http://mkaccdb.eu.int
(last visited Oct. 13, 2003). The Market Access Database is a free, interactive, and easy-to-use service
providing information about market access conditions in non-EU countries and a systematic way for the
European Commission to follow up on complaints from businesses about barriers to trade in non-EU
countries. Id.
148. See loRI F. DAMROSCH ET AL., BASIC DocUMENTS SUPPLEMENT TO INTERNATIONAL LAw,
CASES AND MATERIALS, 362-63 (4th ed. 2001); Kuijper, supra note 37, at 174-78; Pierre Pescatore, The
GATTDispute Settlement Mechanism-Its Present Situation and its Prospects, in 27 J. WORLD TRAoE NO.
4, at 5, 17 (Feb. 1993).
149. Kuijper, supra note 37, at 50; see Norio Komuro, The WTO Dispute Settlement Mechanism-
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Yet from the perspective of a specific European industry considering
investing its resources in a dispute between NCPI and GATT, an effective
remedy for its problems would have appeared elusive. GATT dispute
settlement certainly had its quirks, not the least of which was the "consensus
rule."lSO Though the rule was relaxed over time, there was still no
straightforward right of a GATT member to request the establishment of a
Panel. Furthennore, GATT Panel Reports could only obtain legal force
through a consensus decision of all GAIT countries, which meant that the
losing country could, and regularly did, block or delay adoption of the
Report. ISI Moreover, if a country refused to implement a Report, for which
no deadlines were set or could be obtained, the GAIT Agreement only
envisaged that the winning country might retaliate with the authorization of
the entire GATT membership, including the country being targeted by
retaliation. 1s2 This threat of retaliation was thus non-existent. 1S3
For the United States, these intemationallegal constraints were not an
obstacle in pursuing an industry complaint under section 301 against GATT
members,· or in taking trade actions against them which arguably were
contrary to GATT rules. IS4 Yet in the NCPI, and now under the TBR, the
Community had committed itselfto complying with GATT obligations, which
meant, for instance, that no European industry could expect to retaliate against
another GATT member without the latter's consent. ISS In addition, even ifone
Coverage and Procedures ofthe »TO Understanding, in 29 J. WORLD TRADE No. 4, at 17, 85 (Aug. 1995)
(stating that the new WTO Understanding may be evaluated positively in that it has achieved several
adjudicative reforms including the strengthening ofthe panel process by introducing the negative consensus
rule, the enhancement of multilateral surveillance of the implementation of recommendations, the
prohibition of unilateral retaliation, and the institution of the Appellate Body).
ISO. See GATT, supra note 10, at art. XXIII (discussing nullification or impairment).
lSI. Id; see JOHN H. JACKSON, THE WORLD TRADE ORGANIZATION: CONSTITUTION AND
JURISPRUDENCE (1998) (discussing authoritatively GATT law).
152. See GATT, supra note 10, at art. XXlU.
153. See Bronckers & McNelis, supra note II, at 452.
154. See Devine, supra note 2, at 1107-08. With regard to the relationship ofGATT to section 301
of the U.S. Trade Act of 1974, as amended, Devine states that:
[I]t is clear that the legislative branch of the U.S. Government has extended the scope of
authority of the executive branch of the U.S. Government beyond the rules of GATT with
respect to retaliatory dispute settlement. Section 30 I empowers the President to pass
independent judgment on the propriety and expedience of retaliatory action without regard to
GATT norms and procedures.
Id.; see Bronckers, supra note 4, at 661 (discussing Congress's extension of the scope of the Executive's
retaliatory authority beyond GATT rules).
155. See Council Regulation 3286/94, supra note 5, at Preamble. "Whereas it is appropriate to
confirm that the Community must act in compliance with its international obligations and, where such
obligations result from agreements, maintain the balance of rights and obligations which it is the purpose
of those agreements to establish." Id.
Where the Community's international obligations require the prior discharge ofan international
procedure for consultation or for the settlement of disputes, the measures referred to in
paragraph 3 shall only be decided on after that procedure has been terminated, and taking
account of the results of the procedure. In particular, where the Community has requested an
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disregarded retaliation, the Community had no record ofaggressively pursuing
its GATT rights. For instance, in the one case that went through NCPI and
GATT dispute settlement proceedings and was won by the European
Community early on, the Community authorities abstained from taking any
action when the United States failed to implement the GATT ruling to the
satisfaction ofEuropean industry.1S6 Unsurprisingly, against this background
neither the NCPI nor the GAIT system inspired much confidence in European
industry circles as a means to remove foreign trade barriers.
All of this has now changed. The WTO dispute settlement is more
rigorous than its predecessor. For instance, the "consensus" rule has been
reversed, and now WTO dispute settlement moves forward automatically
absent a consensus against moving forward. IS7 The proceedings have become
more legalized with stricter deadlines, now making the threat of retaliation
real. IS8 Obviously, the point of a TBR action for the complaining industry is
not for the ED to take retaliatory measures. Such measures do not themselves
remove the foreign government's disputed measures. Furthermore, they easily
inflict damage on European industries and consumers who depend on
imported goods or services and who are not at all implicated in the disputed
foreign measure. Accordingly, European industry should first and foremost
use the TBR as a means to persuade the EU's trading partners to settle
international dispute settlement body to indicate and authorize the measures which are
appropriate for the implementation of the results of an international dispute settlement
procedure. the Community commercial policy measures which may be needed in consequence
of such authorization shall be in accordance with the recommendation of such international
dispute settlement body.
Id. at art. 12(2).
156. Commission Decision of 12 March 1987 on the Initiation ofan International Consultation and
Disputes Settlement Procedure Concerning a United States Measure Excluding Imports ofCertain Aramid
Fibres into the United States of America, art. I, 19870.1. (L 117) 18 (agreeing to bring the case to the
GAlT). A GAIT Panel upheld the EU complaint and found that section 337 violated the GATT national
treatment obligation. See B.I.S.D., supra note 26. The United States refused to implement the Panel Report
pending the outcome ofthe Uruguay Round negotiations of intellectual property protection, and the EU did
not press for retaliatory action. See Bronckers & McNelis, supra note II, at 463. In 1998, the EU brought
a wro complaint against the United States regarding section 30 I, which depending on whether the foreign
governmental action is in contravention of a treaty obligation with the United States either permits or
requires the USTR to investigate and retaliate against foreign governmental action deemed to be unjustified
and harmful to U.S. interests. See 19 U.S.C. § 2411 (a),(b) (2000); United States-8ections 301-3/0 of
the Trade Act of 1974 - Requestfor Consulations by the European Communities, wrlDS I5211, available
at http://www.wto.org (Nov. 30, 1998).
157. See DSU, supra note 140, at 1226.
158. See id. at 1239-40, 1242-43. See generally, DAMROSCH ET AL., supra note 148, at 913;
Andrew W. Shoyer, The Future ofWfO Dispute Settlement, Address Before the ASIL Proceedings (Apr.
2,1998), in 92 ASIL, Apr. 1-4 1998, at 75-79; Debra P. Steger & Peter Vande Sossche, WfO Dispute
Settlement: Emerging Practice & Procedure, Address Before the ASIL Proceedings (Apr. 2, 1998), in 92
ASIL, Apr. 1-4 1998, at 79-86; Thomas Cottier, The wro Dispute Settlement System: New Horizons,
Address Before the ASIL Proceedings (Apr. 2, 1998), in 92 ASIL, Apr. 1-4 1998, at 86-91; John H.
Jackson, Fragmentation or Unification Among International institutions: The World Trade Organization,
31 N.Y.U. J.INT'L L. & POL. 823 (1999); Symposium, The First Five Years ofthe WTO, Part I: Review
ofthe Dispute Settlement Understanding, 31 LAw & POL'y INT'L Bus. 565 (2000).
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disputes quickly and amicably. Yet the fact that the threat ofretaliation by the
EU has become real, and the overall perception that European authorities are
taking the WTO process and industry interests much more seriously than in
the past, are likely to render the TBR a more effective weapon for European
industries to remove foreign obstacles to trade.
VIII. CONCLUSIONS
The bulk of WTO disputes are triggered by private industries that have
grievances about foreign government measures. 1S9 Many of such private
grievances end up in WTO dispute settlement, which is still notorious for its
aversion to private participation. l60 It could be said that private parties are the
real guardians of the international trade agreements that the EU signs with
third countries, although at the moment they can control only the fulfilling of
multilateral agreements. They are the ones with the vested interests, and
hence they are the most vigilant in highlighting the transgressions of third
countries. Providing some way for private parties to latch on to the powerful
WTO dispute settlement system was, and is, essential. The TBR does this by
allowing European enterprises to ask the EC to investigate complaints and
seek redress. 161 In some respects this parallels procedures under section 301
ofthe Trade Act of 1974 but with the important distinction that ultimately the
TBR results, not in unilateralism,162 but in action at the multilateral level. 163
The effectiveness of the TBR is enhanced by its flexibility, in that it
provides the EC with a range ofpossible responses and courses ofaction when
159. Bronckers and McNelis, supra note II, at 427.
160. /d.
161. Council Regulation 3286/94, supra note 5, at art. 12.3.
162. United States-Sections 30/-3lOafthe Trade Act of I 974 - Requestfor Consultations by the
European Communities, WTIDSI5211, available at http://www.wto.org (Nov. 30. 1998). The WTO
adopted a panel report which found that section 301 primafacie violated article 23 of the DSU, which
requires WTO members to abide by all of the DSU's rules and procedures and to have recourse as a
prerequisite to retaliatory action. Id. Nevertheless. the Panel ultimately held that section 30 I did not violate
the DSU because the Statement ofAdministrative Action, which the Panel determined to be "an important
interpretative element" of the statute, promised to resort to the DSU when required, thereby repudiating
unilateral U.S. action inconsistent with WTO obligations. See Report ofthe Panel on United StatesSection 301-310 ofthe Trade Act of1974, WfIDSI S2R,available athttp://www.wto.org(Dec. 22, 1999).
163. See Council Regulation 3286/94, supra note 5. at art. 12(2).
Where the Community's international obligations require the prior discharge ofan international
procedure for consultation or for the settlement of disputes. the measures . . . shall only be
decided on after that procedure has been terminated, and taking account of the results of the
procedure. In particular, where the Community has requested an international dispute settlement
body to indicate and authorize the measures which are appropriate for the implementation ofthe
results of an international dispute settlement procedure, the Community commercial policy
measures which may be needed in consequence of such authorization shall be in accordance
with the recommendation of such international dispute settlement body.
Id.
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2004] EUROPEAN COMMUNITY TRADE BARRIERS REGULATION 295
faced with an alleged obstacle to trade. 164 However, some improvements can
be suggested. First and foremost, excluding private complaints based on
bilateral agreements from the TBR is wrong, and this restriction should be
lifted. 16s Paradoxically, excluding bilateral agreements leaves EU
complainants with restricted options even when it comes to the "EU's
friends," the Central and Eastern European countries (CEEC). With respect
to these countries an "offensive" TBR complaint, alleging an impact on one
of these markets, cannot rest on any of the bilateral agreements the EU has
negotiated with them. 166 The EU is meant to use the dispute settlement
provisions of the bilateral agreement in question, when no role for private
actors exists.
Furthermore, although it appears that the EC can self-initiate an
investigation, this question is not explicitly addressed in the TBR. The reality
is that in practice it has not waited to receive a formal complaint or a request
by a Member State or a private party to initiate an investigation. 167 In some
164. Council Regulation 3286/94, supra note 5, at art. 12(3). Commercial policy measures include:
(a) suspension or withdrawal ofany concession resulting from commercial policy negotiations;
(b) the raising ofexisting customs duties or the introduction ofany other charge on imports; (c)
the introduction of quantitative restrictions or any other measures modifying import or export
conditions or otherwise affecting trade with the third country concemed.
Id.
165. Id. at art. 4(1). "Such complaint, however, shall only be admissible if the obstacle to trade
alleged therein is the subjecl of a right of action established under intemational trade rules laid down in a
multilateral or plurilateral trade agreement." Id.
166. The European Community has concluded Europe agreements with Bulgaria, 1994 OJ. (L 358)
3; Czech Republic, 1994 OJ. (L 360) 2; Slovak Republic, 1994 OJ. (L 359) 1; Estonia, 1998 O.J. (L 68)
3; Hungary, 1993 O.J. (L 347) 2, Latvia 1998 O.J. (L26)3; Lithuania 1998 OJ. (L 51)3, Poland, 1993 OJ.
(L348) 2; Romania 1994 OJ. (357) 2; and Slovenia, 1999 OJ. (L 51) 3. The European Community has
also concluded Partnership and Cooperation Agreements with Armenia, 1999 O.J. (L 239) 3; Azerbaijan,
19990.J. (L 246) 3; Georgia, 1999 OJ. (L205); Kazakhstan, 1999 OJ. (L 196) I; Kyrgyz Republic, 1999
OJ. (L 196)46; Moldova; 19980.1. (L 181)3; the Russian Federation, 1997 O.J. (L327) 3; Ukraine, 1998
OJ. (L 049) 1; Albania, 1992 OJ. (L 343) 2. Finally, the European Community has concluded Association
Agreements with the former Yugoslavs Republics of Macedonia and Croatia, 2001 OJ. (C 320) 1.
167. It is noteworthy that most WTO cases brought by the European Community that have reached
the stage ofadopted panel or appellate body reports have not in fact been the subject ofa prior Community
examination procedure under TBR framework. Since 1996, fourteen WTO Panel reports have been adopted
in which the EC had been a complainant and were not pursued following a Community examination
procedure. See Panel Report on Indonesia: Certain Measures Affecting the Automobile Industry,
WTIDS541R,WTIDS551R, WTIDS59/R, WTIDS64IR, available at http://www.wto.org (Jul. 2, 1998);
Report ofthe Panel on India: Patent Protectionfor Pharmaceutical andAgricultural Chemical Products,
WTIDS79IR, available at http://www.wto.org(Aug. 24,1998); Report ofthe Panel on Korea: Taxes on
Alcoholic Beverages, WTIDS751R, WTIDS84/R, available athttp://www.wto.org(Sept 17, 1998), (Report
of the Appellate Body, WTIDS75/ABIR, WTIDS84/ABIR, available at http://www.wto.org (Jan. 18,
1999»; Report of the Panel on Chile: Taxes on Alcoholic Beverages, WTIDS871R, WTIDSllOlR,
available at http://www.wto.org (June 15, 1999); Report ofthe Panel on Korea: Definitive Safeguard
Measure on Imports ofCertain Dairy Products, WTIDS981R, available at http://www.wto.org(June2I,
1999) (Report ofthe Appellate Body, WTIDS98/ABIR, available at http://www.wto.org(Dec. 14,1999»;
Report ofthe Panel on Argentina: Safeguard Measures on Imports ofFootwear, WTIDS 121/R, aval/able
at http://www.wto.org (June 25, 1999) (Report of the Appellate Body WTIDSI21/ABIR, available at
http://www.wto.org(Dec.14, 1999»; Report ofthe Panel on United States: Tax Treatmentfor "Foreign
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296
TEXAS TECH LA W REVIEW
[Vol. 35:269
cases, it may be desirable for the Ee to proceed directly to WTO action so as
to avoid possible additional delay resulting from a prior TBR proceeding and
to secure elimination of the alleged obstacle to trade more quickly. For
example, in cases where another WTO member has allegedly taken
antidumping, countervailing, or safeguard action inconsistently with WTO
rules, a need may arise to pursue WTO action as early as possible to obtain an
effective remedy because such measures are only imposed for a limited period
of time and remedies under WTO law are typically prospective in nature.
Also, when the facts and the legal merits of a case are clear cut, a TBR
procedure could be unnecessary. In still other cases, the decision to launch
WTO action may be motivated by political considerations.
Sales Corporations," WTIDSI081R, available at http://www.wto.org (Oct. 8, 1999) (Report of the
Appellate Body, WTIDS I 08/ABIR, available at http://www.wto.org(Feb. 24, 2000»; Report ofthe Panel
on United States: Sections 301-310 ofthe Trade Act of1974, WTIDS 152/R, available at http://www.wto
.org (Dec. 22, 1999); Report ofthe Panel on United States-Imposition ofCountervailing Duties on certain
Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom, WTIDS I381R,
available at http://www.wto.org (Dec. 23, 1999) (Report of the Appellate Body, WTIDS138/AB/R,
available at http://www.wto.org (May 10,2000»; Report ofthe Panel on Canada: Certain Measures
Afficting the Automotive Industry, WTIDS1391R, WTIDSI42/R.availableathttp://www.wto.org(Feb.ll.
2000) (Report ofthe Appellate Body, WTIDS139/ABIR, WTIDSI42/AB/R, available at http://www.wto
.org (May 31, 2000»; Report ofthe Panel on Canada: Patent Protection for Pharmaceutical Products,
WTIDSI14/R, available at http://www.wto.org(Mar. 17,2000); Report ofthe Panel on United States:
Import Measures on Certain Productsfrom the European Communities, WTIDS 165/R, available at http://
www.wto.org(July 17,2000), (Report of the Appellate Body, WTIDS I 65/ABIR, available at http://www
.wto.org (Dec. II, 2000»; Report of the Panel on United States: Definitive Safeguard Measures on
Imports ofWheat Glutenfrom the European Communities, WTIDS 1661R, available athttp://www.wto.org
(Jut 31, 2000) (Report of the Appellate Body, WTIDSI 66/ABIR, available at http://www.wto.org(Dec.
22,2000»; Report ofthe Panel on Canada: Patent Protectionfor Pharmaceutical Products, Complaint
by the European Communities and their Member States, WTIDS 1141R, available at http://www.wto.org
(Dec. 19, 2000); World Trade Organization, Disputes Chronologically, at www.wto.org (last visited Oct.
13,2003).
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