The External Powers of
the European Community
By Line Holdgaard and Rass Holdgaard
The subject of this student dissertation is the law on EC external powers an area, which has developed mainly through the case law of the European
Court of Justice. Part I describes the evolution of the case law - from the
controversial AETR case till now - and to a certain extent links this development with the general judicial and political climate of the EC (and EU).
The analysis of the case law shows that since the early 1990’s the EC has
applied a more restrictive approach to the legal doctrines of EC external
powers. Part II examines the law as it stands at present. The dissertation is
concerned with mainly two fundamental issues in the field of EC external
powers. Firstly, the identification of whether the EC is competent in a certain field; i.e. whether the EC Treaty contains express or implied external
powers. Secondly, the nature of these powers, i.e. mainly the determination
of whether EC powers are exclusive or shared with the Member States, and
what relevance this has to the ability of the EC and the Member States to act
autonomously in external relations. It is suggested that these doctrines are
closely interconnected and that the current law in the area is - and ought to
be - significantly more complex than the one originally expressed in the
case law of the European Court of Justice in the early 1970’s.
Table of Contents
Introduction
Part I: Evolution of the Law on EC External Powers
1. The Earliest External Activities
1.1 The Initial Position of the Court in the AETR Case
1.2 Organising and Applying the Initial Principle
1.2.1. The Notion of Implied Powers and Pre-emption of Member States
Action
1.2.2. The Scope of Common Commercial Policy and It’s a priori Exclusivity.
1.2.3. The Duty of Close Co-operation – Ruling 1/78
1.3 Concluding Remarks
2. Changing Community Priorities
2.1 Three Examples of Limiting External Community Competence
2.1.1. Opinion 2/91 – The ILO Opinion
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2.1.2. Opinion 1/94 – The WTO Agreement Opinion
2.1.3. Opinion 2/94 – The Second OECD Opinion
2.2 Shared Powers – an Area of Future Disputes
2.3 The Limits of Implied Powers – the ECHR Opinion
3. Concluding Remarks
Part II
Current Law of EC External Powers
4. Introduction
4.1 Some Definitions
4.2 Structure
5. The Sources of EC External Powers
5.1 Express External Powers
5.1.1. Concept and Rationale
5.1.2. Scope
5.1.3. Concluding Remarks
5.2 Implied External Powers
5.2.1. Concept
5.2.2. The Requirement of Parallelism
5.2.3. The Necessity to Act Externally
5.2.4. Concluding Remarks
6. The Nature of EC External Powers
6.1 Introduction
6.2 Exclusive External Powers
6.2.1. Concept
6.2.2. A priori Exclusivity
6.2.3. Classic Pre-emption
6.2.4. Special Pre-emption – the Rhine Navigation Principle
6.2.5. Legal Consequences of Exclusivity
6.2.6. Concluding Remarks
6.3 Non-Exclusive External Powers
6.3.1. Introduction
6.3.2. Definitions and Scope
6.3.3. A Typology of Shared Powers and Their Legal Effects on EC Decision-Making Powers
6.3.4. Other Legal Effects of Shared Powers
Conclusion
Bibliography
Table of Cases: Numerical
Table of Cases: “Popular Name”
Table of Abbreviations
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Introduction
The ability to conduct international relations with other states and thus to be
a subject of international law is a core element of state sovereignty.1 Therefore, there is an inherent sensitivity and controversy in questions relating to
the division of external powers between the Member States and the EC.2
Nevertheless, the Member States did not clearly settle these questions in the
EC Treaty, but left it for the judicial institution of the EC itself to define the
boundaries.
The aim of this dissertation is to give an account of the law on EC external powers. Thus, external relations law of the ECSC, Euratom, EU, and the
sovereign Member States will not be examined in any detail. This exclusion
is due not to a rejection of the interaction of these international actors with
the EC legal order; it is a necessity in order to demarcate the subject matter.
The importance of the environment surrounding the EC in the development
of Community law is, however, acknowledged in the whole structure of this
paper.
EC lawyers habitually stress (or assert as a truism) the importance of understanding the dynamic aspects of Community law and the interaction of
political and judicial processes. Many evolutionary accounts have been
given in other areas of EC law, e.g. general constitutional law, the law on
free movements and competition. This paper is in part meant as a contribution to this line of accounts particularly with respect to EC external powers.3
Part I will focus on the facts and legal reasoning of the Court’s central cases
on EC external powers from an evolutionary perspective. An historical account of the case law on EC external powers is in itself remarkable. It is,
however, also essential in understanding and applying the current law.
On the basis of the case law described in Part I, Part II examines systematically the legal doctrines on EC external competence. The legal problems arising out of the international relations of the Community are numerous, and legal writing on the subject is vast. In an attempt to avoid floating
on top of everything we have identified and examined particularly one central issue in relation to competence: the norm-setting powers of the EC and
the Member States. Hence, in Part II the scope of EC norm-setting powers
and the nature of these powers (the division of tasks between the EC and the
Member States) are analysed.
Part II will emphasise that, besides the well-known linkage between the
political and judicial machinery of the EC, there is another correlation be1
Akehurst (1998), pp. 79.
Traditionally, the battle has concerned Community (integrationist) interests versus ”national interests.” This simplistic picture of conflicting interests is also adopted in this essay
in order to explain legal doctrines. Admittedly, the ”integration versus sovereignty” notion
is employed here for reasons of convenience rather than for its accuracy. Today it is less
obvious that ”national interests” always counter integration and vice versa; see Hix (1999),
pp. 331.
3
Cremona (1999) gives an account of the development of the whole system of EU external
relations. Besides her Article - which is obviously much broader in scope than this paper there is (to our knowledge) no recent English or Danish portrayal of the evolution of EC external powers.
2
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tween the doctrines established within the EC legal order. For example, the
integrative effects of expanding interpretations of the scope of Community
competence depend on the legal nature of the competence thus conferred.
Together Part I and II will explain this second inter-play and show that the
Court is aware of it.
Thus, the aim of the ”matrix” structure, which Part I and II make up together, is to bring forth both an essential understanding of the relationship
between the different doctrines within EC external relations and their interdependence with the general judicial climate in the EC.
Part I
Evolution of the Law on EC External Powers
In what follows, the evolution of the case law of the ECJ will be scrutinized
with respect to the division of powers between the EC and the Member
States in international matters. Part I attempts to describe this development
particularly with respect to:
1)
2)
3)
4)
the scope of express powers (notably Article 133),
the doctrine of implied powers,
the notion of exclusivity, and
the notion of shared powers.
Roughly, Part I will be chronological, allowing, however, for minor deviations where it has been found to serve the structure of the presentation. This
type of presentation makes it possible to bring in mind the political and judicial context of the cases and opinions.4
1. The Earliest External Activities
“The external relations of any international organization are bound to take their impetus from its (internal) priorities and activities.”5
Clearly, the original aim of the three Treaties to create a common market
would inevitably have to manifest itself externally. The importance of the
4
It is beyond the scope of this essay to attempt to explain the outcome of the cases by reference to possible (hidden) political or socio-economic strategies in the Court. For a comprehensive overview of the existing theories on ”judicial politics” with respect to the ECJ,
see Hix (1999), pp. 99 with references. For an authoritative explanation of the evolution of
the EC legal order, see Weiler (1991). See also recently Arnull (1999), pp. 538. An interesting attempt to explain the influence of the type of proceedings on the Court’s decisions has
been made in Tridimas and Eeckhout (1994), pp. 144.
5
Cremona (1998), p. 69.
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external dimension of the three Communities became apparent right after
the entry into force of the first Community, the ECSC, on 25 July 1952.
From the outset, several circumstances contributed to this. The refusal of the
UK (among others) to join the ECSC was never considered to be permanent,
and a number of Association Agreements were concluded inter alia with the
UK (1954).6 The US government invited representatives from the High Authority to visit Washington where the parties reached an agreement concerning a loan of 100 million US dollars. Moreover, in the early 60’s successful
consultations were made with Japan concerning the situation on the world
steel market.
On January 1 1958, the two Rome Treaties entered into force. The Euratom, though limited in scope, contained important and innovative provisions
concerning its external relations. Notably, Article 101 (1) provides that “the
Community may, within the limits of its powers and jurisdiction, enter into
obligations by concluding agreements or contracts with a third state, an international organisation or a national of a third state”. In the very first years,
agreements were concluded under the Euratom Treaty with inter alia the
United States and Canada.
However, already at that time most attention was paid to the EC Treaty.
In the context of external relations, this is due to mainly two factors. First,
the EC Treaty established a customs union with common tariffs (now Articles 23 to 27) and a Common Commercial Policy (now Article 133). Second, and most important, the EC Treaty covered a wide range of activities
both in regard to products and in regard to policies. Again, it was obvious
from the outset that the creation and effective functioning of a customs union, including common external tariffs, between the six Member States necessarily involved interaction with third countries and international organisations. During the 50’s and 60’s the three Communities initiated a serie of
negotiations and entered into numerous agreements with third countries.
Examples are the Association Agreements concluded with Greece (1961)
and Turkey (1963) with the aim of future membership, the Yaoundé Convention (1963) with eighteen African states and Madagascar (the predecessor of the Lomé Conventions), the working out of a global Mediterranean
Policy, and agreements concluded with a number of Asian and Latin American countries. Parallel to this, the EC, though not a formal member, took an
active part in the great multilateral trade negotiations under GATT, known
as the Kennedy Round (1964-67).7
At the internal political level, the Community experienced a time of serious tension. While the Council and in particular the French President de
Gaulle favoured an intergovernmental Community, the Commission, chaired by Hallstein, took an activist approach. The result was seven months of
French ”empty-chair policy” from June 1965 to January 1966 and subse-
6
The agreement was also the first ”mixed” Community agreement, signed by both the
ECSC and the six Member States, J.J. Feenstra (1983), p. 212.
7
See, for a general account of the external activities of the EC at that time, Wellenstein
(1979), pp. 407, Pescatore (1979), pp. 615, MacLeod et al. (1996), pp. 3.
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quently the well-known Luxembourg Accords. De Gaulle had at this time
twice (in 1961 and 1967) blocked British applications for membership.8
1.1 The Initial Position of the Court in the AETR Case
Considering the expanding external activities of the EC during the first decade, it is surprising that the core question of the basis of external Community competence in international matters had not been tested before the
Court until 1970.
The express powers of the EC in the field of external relations were
originally rather fragmented. Internally, the EC Treaty in Part Three covers
a range of common policies with external implications; most notably the
common transport policy, the common agricultural policy, the provisions on
free movement, and the competition rules. The EC Treaty vests on the institutions extensive internal powers to regulate these areas. However, with respect to external powers, the Treaty is silent. The most prominent articles
regarding external relations were at that time Articles 228 [now 300] (on the
procedure to conclude international agreements), 238 [now 310] (on association agreements), and 113 [now 133] (on common international commercial policy). Clearly, these express external powers do not cover the whole
range of internal competencies.
One might wonder what the reason for the absence of express provisions
dealing with external powers could be. If we are to pay respect to the founders of the EC Treaty, it should readily be assumed that they must have considered the external aspects. The Euratom Treaty, which was concluded and
entered into force at the same time, contains express provisions in this respect. Article 101 Euratom in fact expressly authorises this Community to
conclude international agreements whenever it has the powers internally (in
effect an articulation of the principle of parallelism). Article 300 EC, on the
other hand, stipulates the procedure for concluding international agreements
only “[w]here this treaty provides for the conclusion of agreements between
the Community and one or more States or international organisations.” As
Hartley9 points out, such difference between the EC and the Euratom
Treaty, which entered into force at the same time, can hardly have been a
coincidence.10
Authors who supported this line of thoughts adhered to a strict interpretation of the principe d’attribution, the principle of conferred powers, now
expressly stated in e.g. Articles 5 and 7 EC. In particular, it was held that
powers in international relations are a core element of state sovereignty.
This fact necessitates a strict interpretation of the principle of conferred
8
Craig and de Burca (1998), pp. 13 with references at p. 48.
Hartley (1998), pp. 158.
10
Interestingly, this seems also to be the view of the ECJ itself in France v. Commission,
paragraph 39: “[T]he EEC and the Euratom Treaties were negotiated simultaneously and
signed on the same day; accordingly, if those negotiating the two treaties had intended to
grant the Commission the same powers, they would have done so expressly.”
9
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powers, which is, moreover, a common characteristic feature of the law on
international organisations.11
On the other hand, the majority of academics contended that it would be
at least very impractical had the Community not the possibility of pursuing
its objectives and policies also on the international arena. Indeed, it does
seem illogical if the common policies should stop right at the borders of the
Community. How could the EC, for example, lay down ”common rules applicable to international transport to or from the territory of a Member
State” (Article 75 (1) (a)) [now 71 (1) (a)] in a satisfactory manner, if it
could not enter into contractual relationships with third countries? Logically, therefore the external competence of the EC should cover the whole
range of internal competencies. This view supports the principle of parallelism of powers or in foro interno, in foro externo.12
Needless to say, while the Commission – as the integrationist impetus of
the Communities - supported the latter school mentioned above, the Council
– guarding Member States interests - supported the former.13
One should recall that whilst politicians and academics discussed the
limits of EC external powers and activities during the 60’s, the ECJ handed
down important judgments on the constitutionalisation of the EC legal order.14
After several battles in the 60’s between the Commission and the Council, some of which had found informal solutions,15 the Commission finally
took the step to ask the Court for annulment of the proceedings of the Council of 20 March 1970. These proceedings concerned the negotiations and
conclusion by the Member States of the European Agreement Concerning
the Work of Crews of Vehicles Engaged in International Road Transport
(AETR).16 In 1962, at a time when the EC had not adopted internal measures in the area, the Member States negotiated a first draft of the agreement. The Council decided on this basis that the Member States were to
continue the negotiations and the conclusion of the AETR.
Paragraphs 12 to 22 of the judgment have become the pivotal point of
departure in many subsequent cases relating to EC external powers. The
Court in these paragraphs settled the important dispute on division of external competence in the following way: First, the basic capacity of the EC to
enter into agreements with third countries over the whole field of Community objectives was established on the basis of Article 210 [now 281]. Next,
11
Tridimas and Eeckhout (1994), p. 149 with references in note 34; Akehurst (1998), p.
367.
12
Cremona (1999), p. 147 asserts: “It is just not possible any longer – if it ever was – for
the Community to pursue its own objectives solely within its own internal ‘space’.” See
also Gulmann (1995), pp. 230-233; Pescatore (1979), p. 618; Hartley (1998), p. 158, and –
more reluctant - Dashwood (1996), p. 125.
13
Weiler (1991), pp. 2431-2436 gives a comprehensive account of the similarly different
approaches to demarcation of competences in federal systems such as the United States and
Canada.
14
Most notably Case 26/62 Van Gend en Loos v. Nederlandse Administratie der Belastingen [1963] ECR 1 and Case 6/64 Costa v. ENEL [1964] ECR 585.
15
Hartley (1998), p. 159.
16
The Court has subsequently used this French abbreviation of the Agreement.
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the ECJ turned to the authority of the Community to enter into agreements,
i.e. whether powers were conferred in particular cases. In general such authority follows not only from express attribution of powers, but equally may
flow from other Treaty provisions and from measures adopted by the EC institutions.
By way of example, the ECJ explained that when the EC adopted measures laying down common rules with a view to adopt a common policy, the
Member States could no longer adopt measures, which affected those rules.
Hence, while giving an example of implied powers, the ECJ stated the important principle of pre-emption in respect of external relations, also known
as the AETR-principle. As a side-effect of determining the existence of
Community powers, the ECJ gave birth to the notion of exclusivity in external relations.17
To sum up the rationale of the law, the ECJ in paragraph 19 ruled that
the principle of parallelism is part of the EC legal order:18
“[T]he system of internal Community measures may not therefore be separated from
that of external relations.”
Having provided the analytical framework for the case at hand, the Court
came back to AETR itself. The ECJ had little trouble in deciding that AETR
fell within the scope of common transport policy, cf. Articles 3(e), 74, and
75 [now Articles 3(f), 70, and 71]; and that Regulation no. 543/69 (on the
Harmonization of Certain Social Legislation Relating to Road Transport)
constituted the common rules necessary for pre-emption of Member States
action. In conclusion, the Community had exclusive powers to conclude the
AETR agreement, and any step taken outside the framework of the Community would be incompatible with the unity of the common market.
The real subject matter of the case concerned the Council’s decision to
allow the Member States to continue to negotiate and conclude the Agreement. On this question, the ECJ stated that a possible annulment would
deem the Council proceedings non-existent as a result of which the parties
would have to restore their original positions. This would of course be
highly embarrassing and damaging for the EC as an international actor. As
mentioned earlier, the negotiations on AETR began in 1962 at a time when
the EC did not possess exclusive implied powers in this field. A substantial
part of the present agreement was also agreed upon at that time. Under these
circumstances, the Court said, it would jeopardize a successful outcome of
the current negotiations if the EC asserted a new distribution of powers visà-vis third countries. Thus, it was acceptable in this case to allow the Member States to continue their participation in the negotiations and conclusion
17
Dashwood (1998a), p. 118. The principle of pre-emption of Member States actions as a
result of expanding internal Community activities was not entirely new at this time. For an
account of this doctrine, see Waelbroeck (1982), pp. 548 and Weatherill (1994), pp. 13.
18
This approach was not self-evident even inside in the Court. Interestingly, AG Dutheillet
de Lamothe (at pp. 65) was in favour of the principle of conferred powers. He felt the principle would have to be interpreted strictly so as to pay respect to the founders of the Treaty,
and concluded that the decision-making rules in Article 235 would have to be complied
with. See Hardy (1977), p. 584.
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of the Agreement. Interestingly, the Court thus considered the role of the EC
vis-à-vis third countries as one factor that could influence exclusive EC participation in the Agreement.
In conclusion, the AETR judgment requires its place in the famous line of
constitutional decisions handed down by the Court.19 However, though the
judgment merits attention for its seminal position and innovative reasoning,
the legal principles enunciated are ”highly elliptical”20 and left many questions unsolved.
First and foremost, the proper scope of implied Community powers was
still unclear. In this case, the ECJ relied on Regulation no. 543/69, which in
fact in Article 3 expressly allowed for the EC to conclude agreements with
third countries.21 This could be interpreted to mean that internal measures in
some form were a prerequisite for the existence of implied powers.
Furthermore, two obvious problems arose with respect to pre-emption.
Firstly, the explanation of implied powers followed by an example of preemption of Member States action gave rise to assertions that the existence of
implied powers of the EC and the exclusivity of these powers ran parallel.
Secondly, pre-emption of Member States measures seemed in paragraph 17
to depend on an assessment of whether national measures would affect “the
whole sphere of application of the Community legal system.” Particularly,
this could be the case if common rules were adopted with a view to adopt a
common policy. However, in paragraph 22, the ECJ concludes that “to the
extent to which Community rules are promulgated for the attainment of the
objectives of the Treaty, the Member States cannot assume obligations
which might affect those rules or alter their scope.” The question arose
whether only common rules within areas of common policies could exclude
Member States action,22 or alternatively implied powers and pre-emption
applied whenever Community rules were adopted in order to attain any objective of the Treaty.
Notwithstanding this - and the fact that the actual case was dismissed the Commission had won a great victory on principles: The ECJ in this
judgment introduced ”constitutional” principles on the source and nature of
Community external powers.
1.2 Organising and Applying the Initial Principles
Thus equipped with a rather ambiguous skeleton for future Community action in international matters, disputes arose more frequently in the 70’s both
as regards the existence (or scope) of EC external powers and as regards the
nature of the external competence. Moreover, new problems emerged con19
Hix (1999), p. 111 notes that the AETR case created new ”state-like” properties for the
EC. Wide implied powers are well-known in federal systems, see for a comparative analysis: Weiler (1983), pp. 35; Weiler (1991), pp. 2414.
20
Dashwood (1998a), p. 116.
21
Article 3 read: “The Community shall enter into any negotiations with third countries
which may prove necessary for the purpose of implementing this regulation” (according to
paragraph 29 of the judgment).
22
This seems to be the view taken by Pescatore (1979), p. 619.
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cerning the joint participation of the EC and the Member States in international agreements.
At the political level, the enlargement of the Community in 1973 (with
UK, Ireland, and Denmark) brought hopes for enhancement of Community
activities. However, at the same time an intergovernmental forum for cooperation in foreign policy, the European Political Co-operation (EPC), was
established outside the framework of the EC institutions. The strengthening
of the EPC during the 70’s provides an illuminating example of the political
trend in the EC away from supranationalism. The political stagnation lasted
from the Luxembourg Accords until the conclusion of the Single European
Act in 1986.23
However stagnant the political decision-making process was considered
at this time, the EC experienced a continued expansion of its external activities. After the completion of the Customs Union by the end of 1969, the
Commission acted with a single voice on behalf of the Member States in the
Tokyo Round negotiations (1973-79), which concerned mainly tariff reductions. A free trade agreement was concluded with the remaining seven
EFTA States, and the EC began preferential trading relations with a number
of Southern Mediterranean countries (built on the Global Mediterranean
Policy mentioned earlier) and ACP countries (the first Lomé Convention entered into force in 1975).24
Parallel to this, during the 70’s and early 80’s, the ECJ broadened the
scope of Community internal competence and intervention in important policy areas such as free movement of goods25 and competition.26 Having settled the most pertinent doctrinal and constitutional questions in the 60’s and
early 70’s, the inter-institutional battles of the 70’s seemed to turn on the
substantive scope of Member States and EC powers (also) in EC external relations.27
23
Craig and de Búrca (1998), pp. 15, Kapteyn (1998), pp. 17.
Hix (1999), pp. 334 and references in note 7.
25
Case 8/74 Procureur du Roi v. Dassonville [1974] ECR 837; Case 120/78 Rewe-Zentrale
AG v. Bundesmonopolverwaltung für Branntwein (Cassis de Dijon) [1979] ECR 649. See
for a general account of the development of the free movement of goods: Weiler (1999), pp.
349.
26
In EC competition law, the ”high-tide” of EC intervention began in the mid 60’s and continued until the end of the 80’s. Particularly instructive in this respect is the interplay between protection of intellectual property rights – a matter mainly for the Member States, cf.
Article 295 EC, and the objectives of free competition in trade between Member States, cf.
Articles 81 and 82. Seminal judgments are Cases 56 and 58/64 Etablissements Consten SA
and Grundig-Verkaufs GmbH v. Commission [1966] ECR 299, Case 24/67 Parke, Davis v.
Probel [1968] ECR 55, Case 15/74 Centrafarm BV v. Sterling Drug Inc. [1974] ECR 1147,
Case 187/80 Merck v. Stephar [1981] ECR 2063. See for an account of this development:
Imelda Maher (1999), pp. 597.
27
Weiler (1991), p. 2453: “The principal feature of the period lasting from the mid-70’s
into the 80’s is that precisely in this period, one of political stagnation and decisional malaise, another important, if less visible, constitutional mutation – the erosion of the limits to
Community competences – took place.”
24
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1.2.1 The Notion of Implied Powers and Pre-emption of Member States Action
1.2.1.1 The Kramer Case
The first case in which the principles laid down in AETR were applied
reached the ECJ in 1976. Three joined cases were brought before the Court
by way of a preliminary ruling from a Dutch court. Dutch fishermen were
accused of having infringed in 1975 certain provisions aimed at ensuring the
conservation of the stocks of sole and plaice in the North-East Atlantic. The
infringed provisions were adopted by the Netherlands in order to fulfil its
commitments under the North-East Atlantic Fisheries Convention.
Under this Convention, a Commission was established with authority to
make recommendations binding on the Contracting Parties. Accordingly,
said Commission had issued a recommendation regarding the catching of
sole and plaice, which became obligatory in 1974. The Recommendation
fixed catch quotas and the allocation thereof, and prohibited fishing with
certain heavy vessels within a twelve-mile coastal area. The Dutch fishermen claimed that the Netherlands could not (anymore) enter into international agreements in this area, and hence it could not assume the obligations
flowing from the Recommendation.
Recalling its statement in AETR on the capacity and authority of the EC
to assume international obligations, the Court turned to the question of
whether authority existed for the EC in the particular case. The ECJ found
that external authority flowed both from Treaty provisions relating to agriculture, such as Articles 3(d), 38(3), 39, 40, and 43(2) [now 3(e), 32(3), 33,
34, and 37(2)], from Article 102 of the Act of Accession,28 from secondary
legislation such as Regulations 2141/70 and 2142/70, and from ”the very
nature of things.”
In conclusion, the Court stated:
“The only way to ensure the conservation of the biological resources of the sea both
effectively and equitably is through a system of rules binding on all the states concerned, including non-member countries. In these circumstances it follows from the
very duties and powers which Community law has established and assigned to the
institutions of the Community on the internal level that the Community has authority
to enter into international commitments for the conservation of the resources of the
sea.”29
Thus, the EC had implied powers to conclude agreements in this field.
In AETR common rules existed in the area of road transport, which was
the subject of the Agreement. The two regulations adopted within the area
of fisheries policy in Kramer, however, did not establish common rules in
the area covered by the Convention. In fact, they merely stated the Community policy objectives with respect to fisheries conservation and authorised
the Council to ”adopt the necessary measures.”30 Thus, the Court ruled that
28
Article 102 stipulates that the Council from the sixth year after accession (i.e. 1 January
1979) at the latest ”shall determine the conditions for fishing with a view to ensuring protection of the fishing grounds and conservation of the biological resources of the sea.”
29
Paragraphs 30/33.
30
Paragraphs 27-28 and 35-38.
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implied powers might exist even if internal powers had not yet been exercised in all areas covered by the Agreement.31
The Court then turned to the question of whether the Member States
could still act in a field in which the Community was competent, i.e.
whether Community competence would exclude Member States action.32 At
paragraph 39, the Court ruled that “the Community not yet having fully exercised its functions in the matter … at the time when the matters before the
national court arose, the Member States had the power to assume commitments” within the area of fisheries conservation.
However, Member States powers were subject to two qualifications. The
powers were only of a ”transitional nature” and would come to an end from
the sixth year after accession at the latest in accordance with Article 102 in
the Act of Accession. Furthermore, the Member States were ”now”33 - at the
time of the Court ruling - under a general duty of cooperation in accordance
with Article 5 EC [now 10] and a more specific duty to proceed by common
action within the Fisheries Commission, cf. Article 116 EC [now repealed].
The Kramer case first of all is important because it elaborates and de
facto extends the scope of application of the doctrine of implied powers in
AETR. It thus recognises the existence of implied powers where - though internal measures had been adopted - there are no common rules in the area
concerned. The Kramer case did not, however, settle the question of
whether adoption of internal measures was a prerequisite for the existence
of implied powers.
Furthermore, the case provides an instructive example of how the ECJ, at
that time, regarded Member States powers in a field where also the EC is
competent as being only of a transitional nature - sooner or later subject to
pre-emption as EC powers expand.34 The Kramer case may be considered
the originator of an implicit recognition of shared external competence in
the sense that both the Community and the Member States are at the same
time in a specific area competent to assume international obligations.
Above all, however, a cautious note should be made. The case has led to
considerable confusion in the literature. A comparative study of the commentaries on the case shows that many authors have slightly different opinions on the facts and the legal reasoning in Kramer.35 Arguably, it should
be accepted that Kramer provides only an enlightening example of the complex nature of EC external competence.
1.2.1.1 Opinion 1/76 – the Rhine Navigation Opinion
Three months after the Kramer case was decided, the Commission requested
the ECJ for an advisory opinion pursuant to Article 228 (6) EC [now 300
31
There is some disagreement in the literature about this, see Part 2, Section 5.2.3.2.2.
Though the ECJ in an earlier case had distinguished clearly between the existence and the
nature of Community powers (see below, note 49), in this judgment the Court did not
clearly separate the two questions.
33
See paragraphs 40, 42/43, and 44/45.
34
The Court has subsequently confirmed that the transfer of powers was permanent after
the expiry date on 1 January 1979, see Commission v. United Kingdom.
35
See below, note 222.
32
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(6)]. The Commission asked the Court for an opinion on whether the Draft
Agreement Establishing a European Laying-up Fund for Inland Waterway
Vessels was compatible with the EC Treaty.
The Draft Agreement had as its objective the rationalization of the economic situation of the inland waterway transport industry. The river of
Rhine and related rivers were included in the system, and thus the participation of Switzerland was considered necessary. The agreement was to be
concluded by the EC and some of the Member States who had entered into
related international agreements prior to the entry into force of the EC
Treaty (namely the Mannheim Convention of 1868 and the Luxembourg
Convention of 1956). The agreement established institutions with decisionmaking powers (a Supervisory Board) and powers of adjudication (a Fund
Tribunal).
The object of the agreement was clearly covered by Articles 74 and 75
[now 70 and 71] EC on common transport policy. Article 75 [now 71] explicitly empowers the Council to adopt rules relating to international transport. However, the provisions regarding the common transport policy do not
expressly authorise the EC to conclude agreements with third countries. The
Court noted as a preliminary remark that it would be impossible fully to attain the objective of regulating international transport in this area by means
of establishing only internal common rules pursuant to the express powers
in Article 75 [now 71]. Vessels from Switzerland, which was not a Member
of the Communities, played an important part in the rationalization of the
waterways, and would thus have to be included in the system.
The Court stated in broad principles its position in relation to the existence (or source) of EC external powers (at paragraph 3): Authority to conclude agreements (i.e. to use a specific instrument in external relations) may
not only arise from specific attribution of powers by the Treaty, but equally
may flow implicitly from its provisions, cf. most recently the Kramer case.
This implicit authority exists (inter alia) whenever EC law has created internal powers for the institutions for the purpose of attaining a specific objective and participation in an agreement is necessary to attain that objective.
Implied powers exist, as earlier stated, where “internal power has already
been used in order to adopt measures which come within the attainment of
common policies”.36 However, the Court said, implied powers in external
relations are ”not limited to that eventuality”.37 Even in the absence of any
exercise of internal powers at the time of negotiating or concluding the
agreement, the EC has external powers to conclude the agreement “in so far
as the participation of the Community in the international agreement is, as
here, necessary for the attainment of one of the objectives of the Community”.38 Thus, the Community had powers to conclude the draft Agreement
at the time of the proceedings.
The Court then turned to the fact that the Agreement was to be concluded
by the EC and by some of the Member States who were parties to older in36
Paragraph 4.
Ibid.
38
Ibid.
37
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ternational agreements.39 These Member States undertook to make the necessary amendments to the two older conventions. Article 234 [now Article
307] EC requires those Member States who are parties to agreements concluded before the entry into force of the EC Treaty to take all appropriate
steps to eliminate the incompatibilities. The Court found that:
“The participation of these Member States in the agreement must be considered as
being solely for this purpose and not as necessary for the attainment of other features
of the system.”40
The remaining legal effects of the agreement resulted ”exclusively” from
the conclusion of the agreement by the EC. In effect, the ECJ found that the
competence was exclusive of any Member States action.
However, the said agreement allowed in its statute for Member States
participation in other areas, not directly related to areas covered by older
treaties. Member States were sometimes to participate in the organs of the
fund instead of or along with the Community. Overall, the ECJ found that
the institutions of the EC played only a limited role in the decision-making
of the Supervisory Board. In particular the Commission, though chairing the
board, had no voting rights. Consequently, the Court found that:41
“The structure thereby given to the Supervisory Board and the arrangement of the
decision-making procedure within that organ are not compatible with the requirements of unity and solidarity which it has already had occasion to emphasize
in…AETR and…Opinion 1/75.”42
The Court expressed its concerns in broad terms:
“The possibility that the Agreement and the Statute, according to the statements of
the Commission, might constitute the model for future arrangements in other fields
has confirmed the Court in its critical attitude: The repetition of such procedures is
in fact likely progressively to undo the work or the Community irreversibly.”43
Hence, the Court seemed to allow for the use of mixed agreements only in
exceptional circumstances, possibly ”solely” for the purpose of amending
older treaties in accordance with Article 234 [now 307].
A third point should be noted, albeit not directly related to the problems
discussed here. The agreement established a Fund Tribunal, which was to
have jurisdiction to interpret matters falling within the agreement. The six
members of the ECJ were to sit at the Fund Tribunal.
The ECJ found that the jurisdiction granted to the Fund Tribunal would
either replace or run parallel with that of the ECJ. In case of the first solution, the ECJ did not expressly rule on the compatibility with the EC Treaty,
but merely stated its concerns with conflicting interpretations. In the second
39
Though the ECJ previously had occasion to do so, it is the first time it considered the use
of mixed agreements in principle.
40
Paragraph 7.
41
Paragraph 12.
42
Opinion 1/75 is considered below.
43
Paragraph 14.
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case of parallel jurisdictions, the ECJ turned to the issue of ECJ members
sitting in the Tribunal. This would conflict obligations to give impartial
judgments when the judges had first considered a case in one court and subsequently were to consider the same issue in the other court. Thus, the ECJ
ruled that members of the ECJ could not sit at the Fund Tribunal.
Conclusively, these various features of the laying-up fund for inland waterway vessels were considered incompatible with the EC Treaty.
With paragraphs 3 and 4 of the Opinion the doctrine of parallelism was
complete. Implied powers were not limited to common policies, but covered
all Treaty objectives,44 and did not necessarily depend on the prior exercise
of internal powers. The indication in Kramer that efficiency considerations
alone could form the basis of external powers was confirmed.45 In fact, one
(excited) commentator, interpreting paragraph 4 of the Opinion, claimed
that now “the Community has a choice in all areas where it has powers of
action between deciding whether to proceed through autonomous internal
action or to negotiate and conclude a treaty.”46
Secondly, implied powers could become exclusive on being exercised.
The consequence was exclusion of Member States in the agreement. Thus,
the ECJ seemed to take a fundamentally sceptical view on Member States
participation alongside or for the substitution of the EC where the EC is
competent.47
1.2.2 The Scope of Common Commercial Policy and Its a priori Exclusivity
While firmly establishing a broad doctrine of implied treaty-making powers
and a vague and spacious notion of pre-emption of Member States powers,
the ECJ at the same time on a number of occasions considered the scope and
the nature of the most important express external power in the EC Treaty,
Article 113 [now 133]. This Article requires that the Common Commercial
Policy “shall be based on uniform principles”, and to that end the Community may enter into international agreements, Article 133(3).
1.2.2.1 Opinion 1/75 - the Local Cost Standard Opinion
Before Kramer was decided, the ECJ handed down the Local Cost Standard
Opinion.48 The Opinion concerned the Community’s power to conclude the
OECD Understanding on a Local Cost Standard. The Understanding pro-
44
It is of considerable practical importance for the EC to have implied powers in other areas than those covered by Part Three of the Treaty. The common policies do not embrace
important spheres of Community activity in which external action could easily be envisaged – a paradigm example is the approximation of laws, Article 100 [now 94] (and later
Article 100a [now 95]). Approximation of laws provisions are included in many recent
(mixed) Community agreements, including the EEA Agreement and the Europe Agreements, see to this Cremona (1998), p. 86.
45
The Kramer case at paragraphs 30/33.
46
Hardy (1977), p. 588. See also Section 5.2.3.
47
For comments on this opinion, see: Hardy (1977), p. 561; Hartley (1998), p. 163; Dashwood (1998a), p. 118; Tridimas and Eeckhout (1994), p. 151; Cremona (1982), pp. 412.
48
Precise references cannot be given to quotations from this Opinion since the Court did
not divide it into paragraphs.
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vided for common standards of aid for exports, including measures concerning credits for the financing of local costs linked to export operations.
In contrast to the AETR and Kramer judgments, it is important to note
that the Court in this Opinion for the first time distinguished clearly between
the existence and the nature of EC powers.49 First, the Court ruled that the
Understanding fell within Article 112 [now repealed] and more generally
Article 113 [now 133] of the EC Treaty. Community powers in the field of
export policy covered the system of aid for export and the measures for financing such a system. Conclusively, EC powers existed in the field covering the Understanding.
Overall, the Court said, the Common Commercial Policy should be understood as a uniform concept, which has the same scope as if it applied to a
nation state. The commercial policy is made up by a combination of internal
and external measures. The Community does not need, in the field of Common Commercial Policy, to have adopted internal measures. Quite distinct
from the Court’s emphasis on internal measures with respect to the establishment of implied powers, there was little doubt that international agreements themselves can define the Common Commercial Policy. Thus, internal
measures are per definition not required. Furthermore, the Commercial Policy should be regarded as a dynamic concept - “the outcome of a progressive development.”
Secondly, having decided that powers existed for the Community to enter
into the agreement, the Court went on to consider the nature of these powers. In two paragraphs, the Court thoroughly stated its reasons why competence in this field should always be exclusive.
The Court began by noting that Article 113 [now 133] has as its aim the
proper functioning of the Common Market. The Common Commercial Policy thus requires exclusive Community competence for the following reasons: Member States’ autonomous actions would compromise the effective
defence of common interests. If unilateral actions were allowed (in the field
of export credits), it would distort competition between undertakings in different Member States. Autonomous actions by the Member States in this
field would, moreover, distort the institutional framework and question the
mutual trust (unity) within the Community.
A general rationale for the Common Commercial Policy to be exclusive
was hereby established.50 Thus, while implied exclusive powers seemed to
depend on the exercise of internal powers to the effect that Member States
action would gradually be excluded, the Community’s exclusive powers
with respect to Article 113 [now 133] did not depend on the prior exercise
of internal powers.
The reasoning is an interesting example of the characteristic teleological
interpretation of the ECJ. The Court found the rationale for external exclu49
The two sections of part B of the Opinion are titled “1. The Existence of Community
Powers to Conclude the OECD Understanding on a Local Cost Standard” and “2. The Exclusive Nature of the Community’s Powers.”
50
The Court had already in 1972 in the International Fruit case, paragraphs 14-16, ruled
that the Member States had conferred powers “in their entirety” with respect to the Common Commercial Policy.
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sivity in internal EC objectives. The outcome reflects a mixture of pragmatism and application of the principle of parallelism.51 At this time, case law
had established wide implied powers, pre-emption and exclusivity within
the Common Commercial Policy on the basis of internal considerations and
the effet utile of Community law.
Finally, one last aspect of exclusivity should be mentioned. The Court
contended that the fact that the financial burdens derived from the Understanding was borne directly by the Member States could not alter this conclusion:
“The ‘internal’ and ‘external’ measures adopted by the Community within the
framework of the common commercial policy do not necessarily involve … a transfer to the institutions of the Community of the obligations and financial burdens
which they may involve: such measures are solely concerned to substitute for the
unilateral action of the member states, in the field under consideration, a common
action based upon uniform principles on behalf of the whole of the Community.”
Thus, the requirement that the Common Commercial Policy measures
should be based on uniform principles in general cannot be threatened by
the particular fact that the Member States should bear the financial burden.
1.2.2.2 Opinion 1/78 - the Natural Rubber Opinion
Having established that after the transitional period any measure falling
within the Common Commercial Policy is exclusive a priori, from the outset, regardless of whether internal measures would be ”affected” by Member
States external action, the crucial question became its substantive scope of
application.
This was indeed the main subject of the advisory opinion of the ECJ
given in 1979. The question here was whether the Community could participate exclusively in the Draft International Agreement on Natural Rubber.
The agreement was a typical commodity agreement. The EC and the Member States had before concluded this type of agreements jointly.
The ”essential purpose” of the said agreement was to attain a ”balanced
growth between the supply and demand of natural rubber.” The function being to guarantee stable export earnings. The main instrument established to
achieve this aim was the setting up of a ”buffer stock”, which should purchase surpluses when prices were declining and sell from the stocks when
prices were rising so as to keep the price within a margin of fluctuation. The
financing of the buffer stock was not yet decided, but the draft Agreement
seemed to imply a public fund to be financed either by the EC or the Member States directly. Overall, the objectives of the agreement and the buffer
stock included economic co-operation and development considerations.
First, the Court examined the scope of the Common Commercial Policy.
Previous case law (Opinion 1/75) had shown the expanding and dynamic
nature of the Common Commercial Policy. The Court stated that the question had to be determined by reference to the scope and consequences of the
51
Cremona (1999), p. 154. See also Temple Lang (1987), p. 184.
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specific characteristics in the agreement in relation to the concept of Common Commercial Policy.
The objectives of the Draft Agreement were complex. Thus, the Court
began by stating that not only traditional aspects of international trade are
covered by Article 113 [now 133] but also ”more highly developed mechanisms” since otherwise the Common Commercial Policy would render ”nugatory” in the course of time.52 Also the wording (the non-exhaustive list of
subjects covered by Article 113 [now 133]) supports this finding.
The ECJ found some specific features, which fell particularly within Article 113 [now 133]. For instance, products other than rubber were covered
by the Agreement, and some of these products were produced in and exported from the EC.
Hence, that the Agreement was also concerned with development aid objectives could not in itself exclude it from the scope of Article 113 [now
133]. Likewise, the Court ruled that the fact that the Agreement had links to
general ”economic policy” and political dimensions, e.g. the reasons for the
building up of a buffer stock, did not prevent it from falling within Article
113 [now 133].
Some specific provisions relating to technological assistance, labour
conditions, etc. fell outside the scope of Common Commercial Policy.
However, these provisions could not change the fact that the ”essential objective” of the Agreement was of a commercial nature.
Conclusively, all these mixed factors, which not in themselves directly
relate to commercial policy, did not exclude the Agreement from falling altogether within the scope of Article 113 [now 133].
The second major point to observe is the influence of the financing of the
Agreement on the question of exclusivity. The Court ”felt” it had to make a
distinction between the above-mentioned specific provisions (which fell
within the ambit of Article 113 [now 133]) and the financing provisions.
The financing provisions occupied a ”central position” in the Agreement,
and thus created ”a more fundamental difficulty as regards the demarcation
between the powers of the Community and those of the Member States.”53
At the time of the Opinion there was still uncertainty as to whether the
EC or the Member States should bear the financial burden of the buffer
stock. The Court therefore concluded that, in case the financial burden
should be borne by the EC, then the EC would have competence exclusively
over the whole range of objectives and instruments covered by the agreements. By contrast, if the Member States were to bear the financial burden
directly, the competence to negotiate and conclude the agreement and the
day-to-day implementation (decision-making) of the Agreement would fall
partly within the Member States’ competence. Consequently, the EC would
not have exclusive competence and the Member States should participate.54
The judgement thus indicates a very broad scope for Common Commercial Policy, including as “ancillary” matters economic policy, political con52
Paragraph 44.
Paragraph 55.
54
Thus, apparently the ECJ came to a conclusion in conflict with the Local Cost Standard
Opinion. See below Section 2.1.2.
53
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siderations and other not directly commercially related specific clauses.
However, a determinant factor of exclusivity could be the financing of the
agreement, at least if this factor occupies a central position in the agreement.
Secondly, the consequence of the EC and Member States being jointly competent is their joint participation in the agreement. This latter conclusion
may follow naturally from the fact that we are here dealing with different
”compartments” of competence, i.e. respectively EC and Member States exclusive competence.55
Disputes over the scope of the Common Commercial Policy provide illuminating examples of the typical inter-institutional conflicts arising over
the scope of specific legal bases.56 In a line of other cases decided in the
70’s and 80’s, the ECJ accepted the non-exhaustive and dynamic nature of
the Common Commercial Policy. The most prominent cases are Massey
Ferguson and Donckerwolcke in which the ECJ repeated the exclusive nature of the Common Commercial Policy also with respect to autonomous
measures. In Diamantarbeiders, the ECJ found that elimination of national
disparities within the field of taxation, if it affected trade with third countries, was included in the scope of Article 113 [now 133]. This evolution
continued during the 80s. In particular, the Court has held that agreements
and measures including trade instruments should be based solely on Article
113 [now 133] regardless of whether they had strong links to either development policy or environmental objectives.57
1.2.3 The Duty of Close Co-operation - Ruling 1/78
The Court in the AETR case, the Rhine Navigation, and the Natural Rubber
Opinions concluded that also the Member States were to participate in the
agreement under review. Only in the Natural Rubber Opinion was the Court
presented with a question of ”shared” powers between the Member States
and the EC as a consequence of the financing of the buffer stock established
in the Agreement. However, on this occasion the Court merely ruled that
joint competence meant joint participation in the agreement. It was not
asked for its opinion on the possible consequences flowing from the joint
participation.
The first dispute before the Court concerning the consequences of joint
participation in international agreements arose within another Treaty, the
Euratom Treaty.
Similar to Article 300(6) EC, under the Euratom Treaty a competence for
the Court exists pursuant to Article 103 Euratom to give advisory ”rulings”
on the compatibility of international agreements with that Treaty. The only
use of this Article so far has been made by Belgium in 1978. The agreement
in question was the Draft Convention of the International Atomic Energy
55
See on this Section 6.3.3.1 and Cremona (1999), p. 153.
See also below the ILO Opinion, the WTO Agreement Opinion, and the India Agreement
case, and: Dashwood (1996), p. 113: “Much of my time at the Council was spent worrying
whether this or that proposal by the Commission was based on the correct Treaty provision.”
57
See e.g. the First GSP case (development policy) and the Chernobyl case (environmental
policy).
56
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Agency on the Physical Protection of Nuclear Materials, Facilities, and
Transport.
Belgium had asked a line of questions concerning the Community’s
competence to conclude the Convention. After a thorough analysis, the ECJ
found that the Convention concerned in part (exclusive) jurisdiction of the
Member States and in part exclusive jurisdiction of the Community.58 On
that basis it was necessary that both the EC and the Member States participated in the Convention as indeed Article 102 Euratom envisaged.
Belgium had particularly asked the Court for its opinion on the practical
consequences which would follow from Community’s participation in the
Convention with regard to implementation.59 The ECJ began its answer to
this question by emphasising the requirements under Article 192 Euratom,
(which is similar to Article 10 EC). Under circumstances of joint participation, the ECJ held that the Convention could only be implemented “by
means of a close association between the institutions of the Community and
the Member States both in the process of negotiation and conclusion and in
the fulfilment of the obligations entered into.”60 Once the Convention entered into force, its application would “entail close co-operation between the
institutions of the Community and the Member States.”61
Furthermore, the Court ruled, it was not necessary, regarding third parties, to determine the division of powers between the Community and the
Member States. In particular, this follows from the fact that the division of
powers would change in the course of time. Conclusively, the Court with
reference to AETR stressed “the necessity for harmony between international action by the Community and the distribution of jurisdiction and
powers within the Community”.62
The ECJ in this ruling referred to case law established under other
Community treaties (namely AETR). Thus, by implication, principles promulgated with respect to one Community treaty may apply to all three Community treaties. Consequently, the Nuclear Material Ruling is of significance also with respect to the external relations of the EC Treaty. However,
Article 102 specifically authorises the Euratom Community to enter into
mixed agreement, and thus the conclusions drawn from this Ruling should
be tentative with respect to EC law. In particular, it cannot be seen as a
change in course with respect to the critical view on mixed agreements expressed in the Rhine Navigation Opinion.
Notwithstanding this, the ECJ in this ruling for the first time considered
some of the complex legal and practical consequences flowing from the use
of mixed agreements.
58
Paragraph 31.
Paragraph 4.
60
Paragraph 34.
61
Paragraph 36.
62
Ibid.
59
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1.3 Concluding Remarks
The Court from the outset decided to regard the principle of parallelism as
the guiding principle of EC external relations with respect to both the source
and the nature of external powers.63
Implied external powers were held to extend to the whole range of internal activities. The Common Commercial Policy was regarded as a dynamic
and expansionist concept, and required exclusivity in the abstract. The Court
regarded the procedure of mixed agreements with suspicion and their scope
was carefully circumscribed. However, joint competence (in the sense that
both the Member States and the EC hold exclusive compartments of competencies) seemed to require joint participation in international agreements.
Thus, some introductory remarks were made in this period to the problems
of joint participation in international agreements.
During the 70’s an important method of interpretation of EC external
powers was established. The rationale underlying these principles is in part
the same. First, it is based on considerations of achieving specific internal
policy goals and in general the functioning of the Common Market. Secondly, efficiency had a great role to play in the establishment of new legal
doctrines at this time – also with respect to external relations.64
2. Changing Community Priorities
After the political stagnation during the 70’s and early 80’s, a political willingness to achieve greater European integration surfaced around the mid
80’s.65 In 1985, the Council requested the Commission for a programme on
the achievement of the single market by the end of 1992. The Commission’s famous White Paper, ”Completing the Internal Market”,66 led to the
signing of the SEA in 1986. Its objectives were primarily internal, focusing
on internal free movement, cf. for example Articles 8a and 100a [now 18
and 95] EC.67
The strong internal focus within the EC institutions caused a manifest
lack of attention to the external dimension of Community activities during
the 80’s. The concentration on internal matters has been explained as a general under-estimation of the role of EC external relations in the completion
of the internal market. However, the more probable explanation for this
omission is not concerned with ignorance, but with “a deliberate attempt to
63
Another type of parallelism between the internal and external dimension of the EC legal
order was established at that time. In the Haegeman case from 1974, the ECJ held that international agreements are ”an integral part” of the Community legal order, and in 1982, the
ECJ in the Kupferberg case ruled that international agreements are capable of having direct
effect in the Member States. The evolution of the doctrine of direct effect particularly with
respect to international agreements resembles many similar traits.
64
The most influential text on the case law on external relations at that time seems to be
Pescatore (1979). For other texts, see references in Weiler (1983), p. 70, note 119.
65
See for a general account of these changes note 27 with reference to Weiler (1991).
66
COM(85)310.
67
Craig and de Búrca (1998), pp. 1104; Kapteyn (1998), pp. 33.
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sidestep a potentially controversial issue at a delicate stage of the intra-EC
negotiations.”68
By the late 80’s, third countries had begun to accuse the Community of
building a protectionist “Fortress Europe”.69 This triggered the EC to focus
on the external dimension of Community activities. Furthermore, the completion of the internal market and the removal of internal borders required
common external frontiers and more coherent external policies. The Community became more aware of its role in and its possible influence on the international society.70
The Community momentum towards an ever closer union continued after
the entering into force of the SEA. Adverse, in the early 90s, the populations
of Europe increasingly voiced their opposition to the visions of their political leaders of a united Europe.71 Consequently, the TEU (signed in 1992)
was evidently influenced by this emerging resistance and by divergent
views on the direction of (what was now to be called) EU. The main focus
in the Maastricht negotiations became that of bringing the EC/EU closer to
its people, inter alia by formalising the subsidiarity principle in Article 3b
[now 5] EC.
The European Union was created as an inter-state co-operation with
strong intergovernmental features. The EU (the second and third pillars)
does not possess international legal personality. Instead, the Union was to
“assert its identity on the international scene”, cf. Article 2 TEU. Moreover,
the CFSP and JHA are not subject to the jurisdiction of the Court. However,
the division of tasks between the three pillars established by the TEU is
likely to influence the Court’s interpretation of Community powers.72
Broadly speaking, the second and third pillars deal with political issues
whereas the economic issues are dealt with in the EC Treaty.
Both the SEA and the TEU conferred new express external powers on
the EC.73 However, the EC had already assumed those powers in practice
through broad interpretations of Articles 235 and 113 [now 308 and 133]
EC.74
The TEU introduced what has been dubbed ”variable geometry” within
the EU where the Member States were allowed to participate in certain
68
Eeckhout (1994), p. 339, citing Loukas Tsoukalis: The New European Economy: The
Politics and Economics of Integration.
69
Cremona (1999), p. 142; Eeckhout (1994), pp. 339.
70
Cremona (1999), pp. 166 and Cremona (1998).
71
Weiler (1991), pp. 2466.
72
Craig and de Búrca (1998), pp. 24 and p. 118; Kapteyn (1998), p. 47; Cremona (1994b),
pp. 248.
73
It attained powers to ”foster co-operation” with third countries and international organisations in the fields of education (Article 126(3) [now 149(3)]) vocational training (Articles
127(3) [now 150(3)]), culture (Article 128(3) [now 151(3)]), public health (Article 129(3)
[now 152(3)]) and trans-European networks (Article 129c(3) [now 155(3)]) and powers to
”enter into international agreements” in the fields of research and technological development (Article 130m [now 170]), environment (Article 130r(4) [now 174(4)]), development
co-operation (Article 130y [now 181]) and monetary policy (Article 109 [now 111]).
74
See above, Section 1.2.2.2 at note 57, Craig and de Búrca (1998), p. 21; Kapteyn (1998),
p. 1255; Cremona (1999), p. 159.
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Community policies at different speeds.75 The recognition of a need for differentiated integration has continued with the Treaty of Amsterdam (where
Article 43 TEU on ”closer co-operation” was agreed upon) and the draft
Nice Treaty.
During the 90’s, the EC concluded important economic agreements like
the EEA and the WTO agreements, enlargement agreements were negotiated with some of the former EFTA countries and association agreements
with Eastern European countries (the “Europe Agreements”). The idea of
flexibility within EU (i.e. extending only selected parts of the Community/Union system to some Member States) has become apparent also in relation to third countries. The complex web (Byzantine structures) of differentiated integration into the Community system is reflected in the Community’s international agreements, where third countries to a different degree
take part in the EC system.76 The recent “EU” international agreements have
been characterised as multi-pillar and multi-faceted agreements. They contain subjects within all three pillars of the EU and concern many different
facets of the specific fields. Furthermore, they contain rights and obligations
being political, legal and economic in nature.77
2.1 Three Examples of Limiting External Community Competence
While the political institutions pushed hard for the completion of the internal market in the 80’s, the Court worked equally hard to secure the effet
utile of Community law in the internal sphere.78 In the 90’s, the popular reluctance against further integration seemed to pause the political strive towards an ever closer union and it might have eased the Court’s integrationist
approach as well.79
As within the political institutions, external relations also acquired a
more central position in the Court in the 90’s. The continuous expansion of
external activities called for further considerations on the law of external relations in order to catch up with Community practice. For example, the legality of mixed agreements - which are now widely used in practice - until
the mid-90’s relied only on the cautious and critical remarks made by the
75
The first step was taken at Maastricht and Edinburgh where Denmark and the United
Kingdom among other things decided to ”opt-out” of the third stage of the EMU. ”Variable
geometry” is also introduced with respect to social policy and the adoption of the Schengen
Convention. See in particular: Chalmer (1998), pp. 255-269 with references p. 269; Monar
(1998), pp. 320.
76
See e.g.: Cremona (1998), pp. 79; Cremona (1994a), pp. 508. See also Hix (1999), p. 339
who distinguishes different types of trade agreements depending on their degree of access
to the internal market.
77
Cremona (1999) p. 148, and pp.161; Cremona (1998), pp. 72, and pp. 79.
78
C-6 and C-9/90 Francovich & Bonafaci v. Italy and C-106/89 Marleasing SA v. La
Comercial Internacionale de Alimentacion SA.
79
Obviously, it is not possible to fix a date after which also the Court’s approach transformed. However, also at the internal level, several judgments contribute to this impression.
In relation to Member States’ liability: C-392/93 R. v. HM Treasury, ex parte British Telecommunication plc and joint cases C-178, 179, 188, 189 and 190/94 Dillenkofer et al. v.
Germany. See also Arnull (1999), pp. 181, esp. p. 184. As regards free movement of goods,
notably: C-267 and C-268/91 Keck & Mithouard. Compare above note 25.
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Court in the Rhine Navigation case and the Nuclear Materials Ruling concerning the Euratom Treaty. In this decade, the Court handed down seven
opinions (of a total of ten since 1958) pursuant to Article 300(6) EC.
The first two opinions handed down in the 90’s (the First EEA and Second EEA Opinions), concerned the limits of integration of third countries
into the Community legal system. In both Opinions, the Court considered
the compatibility of the European Economic Area Agreement with the EC
Treaty. The Opinions are of constitutional significance, and signal the
Court’s reluctance to reconsider the fundamental principles already established. In 1993, the ECJ handed down the first case in the 90’s, which rose
questions concerning EC external powers.
2.1.1 Opinion 2/91 - the ILO Opinion
The ILO (the International Labour Organisation) is a UN organisation established for the purpose of improving the conditions for workers and to promote social justice. According to the founding treaty of the ILO, only states
can be members of the organisation. Previously, the Member States of the
EC have made special arrangements with ILO, which allowed them to
authorise the Community institutions to act on their behalf.
During the negotiations of ILO Convention No. 170 on safety in the use
of chemicals at work, the Commission was authorised to represent the
Member States. After the conclusion of the Convention, the Commission
asked the Court for an opinion on whether the Community was competent to
conclude the agreement and, if so, what consequences this would have for
the participation of the Member States. The Commission claimed that the
EC held exclusive powers to conclude the Convention since the EC had already adopted internal measures in the areas covered by the Convention.
Before considering the question of EC competence in relation to the
Convention, the Court recalled some of the general rules on external competence of the EC laid down in previous case law. Here, the Court made a
clear distinction between the existence and the nature of external implied
powers. In the AETR case, these two principles were dealt with in one. The
Court made a clear distinction between the source and the nature of the EC’s
powers under Article 113 [now 133] EC in the Local Cost Standard Opinion, but such distinction between the existence and the nature of Community
powers has not been applied subsequently.
In general terms, the Court pointed out that external powers could arise
not only from express attribution of powers in the Treaty, they could equally
flow by implication from its provisions. Furthermore, the Court held that
”such authority could flow by implication from other measures adopted by
the Community institutions.”80 The Court noted that the EC had internal
competence in the field covered by the Convention, cf. Article 118a [now
137(2)] EC, and that this competence, moreover, had been exercised. The
Court thus concluded that the Convention fell within the EC’s external
competence.81
80
81
Paragraph 7 (own emphasis).
Paragraphs 14-17.
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Next, as regards the nature of the competence of the EC, the Court listed
two bases for exclusivity in the initial part of the Opinion: It may flow from
treaty provisions granting the EC express external powers, e.g. Article 113
[now 133] EC or it may be based on the principle of pre-emption (the AETR
principle).
The Court emphasised that pre-emption does not only apply within the
framework of the common policies listed in the Treaty. The duty of not
jeopardizing the attainment of Treaty objectives, cf. Article 5 [now 10] EC,
relates to any measure adopted for the purpose of attaining one of the Community objectives. The Court expressly stated what may be indicated in the
AETR case; namely that pre-emption applies to the whole scheme of the
Treaty, and not only to common policies.82
It then held that ”the provisions of Convention No. 170 are not of such a
kind as to affect rules adopted pursuant to Article 118a.”83 Both the Convention and Article 118a [now 137] EC provided only for adoption of minimum
regulations and both accepted that the Member States could adopt more
stringent measures. Nothing would therefore prevent the Member States
from applying Community law and being parties to the Convention at the
same time.
The Commission had argued that the practical difficulties in some situations in determining which of two rules was the most favourable for workers
should result in exclusive competence for the Community. The Court recognised the problem, but stated:
“Difficulties, such as those referred to by the Commission, which might arise for the
legislative function of the Community cannot constitute the basis for exclusive
Community competence.”84
After rejecting these internal efficiency considerations, the Court concluded
that the EC did not hold exclusive competence in the whole field covered by
the Convention on the basis of Article 118a [now 137] EC, or Article 100
[now 94] EC.
Subsequently, the Court considered Part III of the Convention concerning labelling, packaging and classification of chemicals. This part of the
Convention concerned an area already ”covered to a large extent by community rules with a view to achieving an ever greater degree of harmonisation”.85 The objectives of these rules were not only protection of human
health and environment but also removal of barriers to trade. The Court held
that the commitments arising from the Convention in this field could be of
such kind as to affect Community rules and therefore, Community powers
were exclusive in relation to that part of the Convention.
Hence, the Convention fell within both shared and exclusive EC competence. The Member States and the EC were therefore jointly competent to
adopt the Convention. The Court stated:
82
See note 44.
Paragraph 18.
84
Paragraph 20.
85
Paragraph 25.
83
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“In such a case, negotiation and implementation of the agreement require joint action by the Community and the Member States.”86
The Court recalled the duty of close cooperation between the EC and the
Member States, which flows from the requirement of unity in the international representation of the Community, cf. the Nuclear Material Ruling.
The Court further stipulated that cooperation was all the more necessary
in this case in view of the fact that the EC ”cannot, as international law
stands at present, itself conclude an ILO convention” but must use the
Member States as a medium.87
Conclusively, as perhaps indicated in the AETR case, it was spelled out
here that the principle of pre-emption relates to ”all areas corresponding to
the objectives of the Treaty”.88 The extent to which national rules would be
excluded because they may affect Community rules is still uncertain.
Compared to previous case law, e.g. the Kramer case, internal effet utile
was not regarded as the only relevant factor in relation to recognition of exclusivity in this case. Concurrent competence was introduced in the Kramer
case; however, in that case Member States competence was regarded as being of a transitional nature.89 For the first time, in this Opinion, the Court
held that the mere existence of Community rules does not necessarily preempt national measures.
The Court did not recall its reluctant approach towards mixed agreements presented in the Rhine Navigation Opinion. This is particularly interesting in view of the fact that this opinion as the former concerned a question of concurrent competence. The Natural Rubber Opinion where the
Court accepted joint participation concerned different compartments of
powers.90
Finally, the ”duty of close co-operation” was introduced within the
framework of the EC Treaty, though it was not clarified what this duty actually entails.91 Is it a general requirement of joint participation whenever
competence is shared, or is it merely a requirement of co-ordination between Community and Member States action? It appeared that the importance of unity differs depending on the situation – whatever legal effect this
will produce.
2.1.2 Opinion 1/94 - the WTO Agreement Opinion
The negotiations in the Uruguay Round on the development and expansion
of the multilateral trade system introduced by the GATT, started in 1986
and lasted 8 years. The European Commission was authorised by the Council and the Member States to act as the sole negotiator on behalf of the EC
and the Member States. However, a statement was made in the minutes that
86
Paragraph 12.
Paragraph 37.
88
Paragraph 10.
89
The Kramer case, paragraph 40.
90
Se above, Section 1.2.2.2 at note 55.
91
For comment on this opinion, see MacLeod et al. (1996), p. 51, and pp. 58; Cremona
(1999), pp155; Tridimas & Eeckhout (1994), p. 152 and 155; Neuwahl (1996), pp. 683.
87
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this did not pre-judge the division of competence between the Member
States and the EC.
The result of the Uruguay Round was the WTO Agreement. It established an institutional framework for the management of trade relations
among the Member Countries. Annexed to the framework WTO Agreement
were a number of agreements laying down substantive rights and duties, notably the Multilateral Agreements on Trade in Goods (including GATT), the
General Agreement on Trade in Services (GATS) and the Agreement on
Trade Related Aspects of Intellectual Property Rights (TRIPs).
Simultaneously, during the negotiations leading to the conclusion of the
TEU, the Commission argued in support of a redrawing of the external economic policy of the EC, which included the traditional matters within the
Common Commercial Policy as well as other fields, inter alia services, intellectual property and establishment.92 It was also considered whether to
include trade in services and intellectual property under Article 113 [now
133] EC. Neither of these ideas was adopted by the conference.
After the conclusion of the Uruguay Round negotiations, the Council decided that both the Member States and the Council should sign the final
WTO Agreement. The Commission, claiming that the Community alone
should conclude the Agreement, requested the Court for an opinion on
whether the Community held competence to conclude the WTO Agreement
and how this would influence the Member States’ participation in the
Agreement.
Express powers - the scope of Article 113 [now 133]
The Commission, encouraged by the Court’s earlier opinions (the Local
Cost Standard opinion and the Natural Rubber opinion), ambitiously argued
that all the annexed agreements fell within the scope of Article 113 [now
133] EC and therefore, in accordance with these opinions, required exclusive Community participation. Apparently, the Commission sought to
achieve judicially what it had not achieved during the negotiations of the
TEU.
There was a general consent that the main parts of the Multilateral
Agreements on Trade in Goods, fell within the scope of Article 113 [now
133] EC. Focusing on the issues subject to disagreement between the Commission and the Member States, the Court held that the general character of
the agreement required the use of Article 113 [now 133] EC, although the
Agreement covered goods under the ECSC Treaty and the Euratom
Treaty.93 Furthermore, since the aim of the Agreement on Agriculture was
to establish a world wide trading system, external powers should be based
on Article 113 [now 133] EC, not Articles 39 and 43 [now 37 and 33] EC
which granted the EC powers to adopt internal measures in the areas covered by the Agreement.
As regards GATS, the Court recognised that the service sector was becoming a dominant sector of the economy of developed countries:
92
93
Cremona (1999), p. 157 n. 89.
Paragraphs 22-30.
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“Having regard to this trend in international trade, it follows from the open nature of
the common commercial policy, within the meaning of the Treaty, that trade in services cannot immediately, and as a matter of principle, be excluded from the scope
of Article 113.”94
Nevertheless, the Court did not consider GATS en bloc as falling within the
ambit of Article 113 [now 133] EC. Only one of four modes of supply of
services included in GATS - the cross-frontier supply of services, which did
not involve any movement of persons - could be regarded as falling within
the scope of this Article.95 The determining factor was that this mode was
”not unlike trade in goods.”96 Since the activities listed in Article 3 [now 3]
EC distinguished between movement of natural and legal persons (Article
3(d) EC) and common commercial policy (Article 3(b) EC), and since the
movement of natural and legal persons was dealt with in a specific title in
the Treaty (Title IV), the Court held that the intention was to keep the two
matters separated. Thus, the other three modes of supply of services did not
fall under Article 113 [now 133] EC.
The Court then paid special attention to services comprising transport. It
pointed to the fact that transport was subject to a specific title (title IV [now
title V]) in the EC Treaty. It noted that the idea underlying the AETR judgment and the Rhine Navigation Opinion was that all international agreements regarding transport were to be concluded on the basis of the transport
provisions, not Article 113 [now 133] EC. A practice of the Council according to which international agreements on transport had been concluded on
the basis of Article 113[now 133] EC could not change this.
Except for the section on counterfeit goods, also the TRIPs fell outside
the scope of Article 113 [now 133] EC. The Court recognised its effect on
international trade but held that protection of intellectual property rights, did
not specifically relate to international trade. It affected ”internal trade just as
much, if not more.”97 Furthermore, the main objective of TRIPs, harmonisation of protection of intellectual property, was not an aim of the Common
Commercial Policy. In this connection the Court stressed that if external
competence for the EC in this area was recognised on the basis of Article
113 [now 133] EC it would be possible for the EC to escape the procedural
constraints laid down in Articles 100, 100a and 235 [now 94, 95 and 308]
EC which were the bases of internal powers in the area of TRIPs.98
Before this opinion, the EC had concluded a number of agreements on
the basis of Article 113 [now 133] EC, which contained clauses on protection of intellectual property. The Court noted that these clauses were only
ancillary provisions, which moreover did not impose any obligation on the
Community;99 they did not alter the fact that TRIPs fell outside the scope of
Article 113 [now 133] EC. In any case, an institutional practice of including
94
Paragraph 41.
The other three being 1) consumption abroad; 2) commercial presence; and 3) the presence of natural persons.
96
Paragraph 44.
97
Paragraph 57.
98
Paragraph 60.
99
Paragraphs 67 and 68.
95
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provisions on intellectual property protection in agreements concluded under Article 113 [now 133] EC could not affect this conclusion. Thus, TRIPs
did not fall within the scope of Article 113 [now 133] EC.
The Local Cost Standard and Natural Rubber opinions as well as the
new trends of trade in services as the dominant sector in the economies of
developed countries gave the Commission valid reasons for its claims. The
Court in this Opinion recalled the dynamic nature of the Common Commercial Policy and reconfirmed what had already been established. Those factors did not, however, influence the Court to make wide extensions of the
scope of the Common Commercial Policy. On the contrary, in this Opinion,
the Court expressed the hitherto most restrictive interpretation of Article
113 [now 133] EC.100 Apparently, this Article now covered mainly traditional economic areas.
Implied powers
In the alternative, the Commission argued that the Community held exclusive competence to conclude the WTO Agreement on the basis of the doctrine of implied powers. According to the Commission, exclusive implied
powers could be based on Treaty provisions,101 the AETR principle or the
Rhine Navigation principle.
Possibly on the basis of these assertions, the Court did not in its answer
distinguish clearly between the questions of, on the one hand, whether implied powers existed and, on the other hand, the exclusive nature of these
powers. The Court first considered the Commission’s claims in relation to
GATS and then turned to TRIPs. In so far as the conclusions of the Court
correspond, they will be dealt with jointly.
First, the Court held that the rationale behind a priori exclusivity in relation to Article 113 [now 133] EC, cf. the Local Cost Standard Opinion, did
not apply to powers arising from the specific internal provisions in the area
covered by GATS.102 Furthermore, the chapters regulating the right to establishment and the freedom to provide service did not contain provisions concerning relations arising from international law. Presumably, the Court recognised the existence of implied powers in these fields103 on the basis of
these provisions but rejected that exclusive external Community powers to
conclude the GATS could exist a priori on this basis.104
As regards the valiant claim that Article 100a and Article 235 [now 95
and 308] EC could create exclusive Community competence in the fields of
GATS and TRIPs the Court held that:
100
See the Local Cost Standard Opinion, Section 1.2.2.1.
Most ambitiously, the Commission claimed that the EC held exclusive competence
solely on the basis of Articles 100a and 235 [now 95 and 308] EC.
102
Paragraph 78.
103
Paragraph 90 also supports that understanding. See in general Part 2, Section 5.2 (particularly at note 209) and Section 6.3.3.2.2. Dashwood (1998a), p.121 seems to imply that
implied powers did not exist at all.
104
Paragraph 81. No provision in the Treaty deals specifically with the fields covered by
TRIPs.
101
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“Save where internal powers can only be effectively exercised at the same time as
external powers […], internal competence can give rise to exclusive external competence only if it is exercised.”105
Since internal measures had not been adopted within the whole field covered by GATS or TRIPs, exclusivity did not flow from these provisions.
Secondly, the Court held that exclusivity on the basis of the Rhine Navigation (or Opinion 1/76) principle could not be achieved with respect to
GATS because:
“attainment of freedom of establishment and freedom to provide services for nationals of the Member States is not inextricably linked to the treatment to be afforded
in the Community to nationals of non-member countries or in non-member countries
to nationals of Member States of the Community.”106
Thus, the requirement in the Rhine Navigation Opinion that external powers
may become exclusive on being exercised if this is necessary for the attainment of a Community objective was (now) limited to situations in which
achievement of a Community objective is ”inextricably linked” to external
action.
Thirdly, the Court considered whether exclusivity could be based on
classic pre-emption principles. In relation to GATS, the Court identified
three situations in which the EC achieved exclusive external competence on
the basis of pre-emption: Where internal measures contain provisions 1)
regulating the treatment of nationals of non-member countries, 2) expressly
conferring powers upon the EC to enter into commitments vis-à-vis third
countries, or 3):
“where the Community has achieved complete harmonization, because the common
rules thus adopted could be affected within the meaning of the AETR judgement if
the Member States retained freedom to negotiate with non-member countries.”107
Following the ILO Opinion, the Court seemingly restricted the application
of the AETR principle further by laying down more specific requirements,
which had to be met in order for Community rules to pre-empt Member
State action.108
In conclusion, the Court held that the EC had not achieved exclusive external competence in the areas covered by either GATS or TRIPs.109
After concluding that EC powers in the fields of GATS and TRIPs were
not exclusive, the Court addressed the Commission’s emphasis on the importance of not undermining the Community’s action vis-à-vis the rest of the
world and thereby weakening its negotiating powers. The Court stressed
that:
105
Paragraph 89.
Paragraph 86, emphasis added.
107
Paragraph 95, emphasis added.
108
The phraseology used here brings pre-emption close to situations of direct conflicts of
rules where also the doctrine of supremacy is available. See Section 6.2.3.2 at note 267 and
Bourgeois (1995), pp. 780; Dashwood (1998a), p. 122.
109
Paragraphs 97 and 102 to 104.
106
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“any problems which may arise in implementation of the WTO Agreements and its
annexes as regards the coordination necessary to ensure unity of action where the
Community and the Member States participate jointly cannot modify the answer to
the question of competence, that being a prior issue. As the Council has pointed out,
resolution of the issue of the allocation of competence cannot depend on problems
which may possibly arise in the administration of the agreements.”110
Another important point in relation to exclusivity was made with regard to
the role of financial provisions. The Court held that financial burdens could
not alone justify participation of the Member States in the Agreement. The
determining feature was that the contributions merely concerned an operational budget, not a financial policy budget.111 The Court thereby gave an
example of when financial provisions occupied a ”central position”, cf. the
Natural Rubber Opinion.
As a last point, the Court elaborated on the consequences of shared competence. It recalled the mutual duty of close co-operation, cf. the ILO opinion and stipulated that this duty was all the more imperative in this case
because of the inextricably inter-linkage of the Agreements annexed to the
WTO Agreement and the cross-retaliation measures.112
In addition to the constrained interpretation of the ambit of Article 133,
the Court set up strict qualifications to be met for the EC to acquire exclusive powers on the basis of pre-emption. It could be hard to find a real difference between pre-emption of external powers and the doctrine of supremacy (in external relations).
The WTO Agreement Opinion has been subject to numerous comments
and severe criticism from traders and academics.113 It is by many observers
seen as a land-mark case in the trend away from communitarisation apparent
in the recent case law of the ECJ.114
2.1.3 Opinion 2/92 - the Second OECD Opinion
Less than six months after the WTO Agreement Opinion, the Court rendered
another opinion also concerning the scope of Article 113 [now 133] EC.
This time with regard to a decision adopted within the framework of the
OECD.
In December 1991 the Council of the OECD adopted ”the Third Decision”, which was part of a larger package called “the Strengthened National
Treatment Instrument”. The Decision concerned the treatment of foreign
controlled undertakings in relation to their establishment on the territory of
an OECD Member State. The intent of this Decision was to secure undertakings of nationals of any OECD countries a treatment no less favourable than
that accorded domestic undertakings.
110
Paragraph 107, emphasis added.
Paragraph 21.
112
Paragraph 109.
113
See e.g. Bourgeois (1995), pp. 763; Tridimas & Eeckhout (1994), pp. 159; Jacobs
(1996), pp. 5-10, Konstadinidis (ed.) (1996), pp. 63-120; Hartley (1998), pp. 165; Pescatore
(1999); Maunu (1995). There are, however, commentators who welcomed the Opinion, see:
Dashwood (1996), pp. 102.
114
Arnull (1999), p. 554.
111
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The Commission, which negotiated the Decision on behalf of the EC, requested the Council to authorise the Commission on the basis of Articles 57
and 113 [now 47 and 133] EC to participate in the Decision. The Presidency
of the Council (the Netherlands) stated that in so far as the Decision related
to matter within Community competence115 the Member States would be
bound by it as soon as the EC acceded the Decision. Belgium requested the
Court for an opinion on the proper legal basis for the EC’s participation in
the Decision. Supported by the Commission, Belgium argued that Article
113 [now 133] EC alone would constitute the correct legal basis. Four other
Member States (Spain, France, the Netherlands and United Kingdom) and
the European Parliament claimed that the EC and the Member States were
jointly competent.
First, the Court examined the scope of Article 113 [now 133] EC in relation to the Decision by determining the essential objective and the content
of the Decision. The Decision related ”only partially to international trade
with non-member countries; it affected internal trade to the same extent as
international trade, if not more so.”116
Some of the fields covered by the Decision fell within the internal market rules, not Article 113 [now 133] EC. Furthermore, the Court stated that
as far as the Decision concerned transport it fell within the scope of the
common transport policy, cf. the WTO Agreement Opinion.
Since Article 113 [now 133] EC could not grant the EC exclusive external competence in the areas of the Decision, the Court went on to consider
whether exclusive external competence could be achieved on alternative
bases. The Commission argued that the Community held competence on the
basis of implied powers to adopt the Decision on its own, since external
powers could be inferred from its internal powers on the basis of the AETR
principle or the Rhine Navigation principle.
The Court emphasised that exclusive external competence did not flow
automatically from the power to lay down rules internally in the field of the
Decision. The Member States are only excluded from acting ”when there are
common rules, which could be affected by such obligation.”117
Briefly stating that the Rhine Navigation principle did not apply in this
case, the Court recalled the situations referred to in the ILO and WTO
Agreement Opinions118 in which the EC might achieve exclusive external
competence, i.e. where internal legislation either 1) contained provisions on
the subject matter, 2) expressly granted the EC competence to negotiate
with non-member countries in this area, or 3) effected complete harmonisation in the area covered by the Decision.
The Court held that in some of the areas covered by the Decision the EC
had adopted measures, which could pre-empt Member States participation
but not in the whole field of the Decision:
115
Part I, paragraph 6.
Part IV, paragraph 9. The argument was based on considerations similar to those, which
made the Court reject that TRIPs fell within Article 113 [now 133], see the WTO Agreement Opinion, paragraph 57.
117
Part V, paragraph 3.
118
The ILO Opinion, paragraph 25 and the WTO Agreement Opinion, paragraph 96.
116
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“It follows that the Community is competent to participate in the Third Decision but
that such competence does not cover all the matters to which that decision relates.”119
This statement concludes the reasoning of the Court in relation to the exclusive nature of the Community competence.120
Finally, in relation to Article 235 [now 308] EC, the Court recalled its
statement in the WTO Agreement Opinion. Generally, the requirement that
internal powers must be exercised in order to create exclusive external powers applied a fortiori to Article 235 [now 308] EC. Furthermore, the Court
repeated that only where no other provision of the Treaty gives the EC necessary powers, recourse to Article 235 [now 308] EC is justified. It spelled
out that as a general rule implied external powers may only be exclusive
when internal powers are exercised.
Conclusively, the Court held that the Community and the Member States
”shared joint competence” to adopt the Decision.121
In conclusion, the ILO, WTO Agreement and Second OECD Opinions
limited the broad principles on external Community competence laid down
in the 70’s.
The dynamic nature of the Common Commercial Policy was reconfirmed; however, the Court was reluctant to extend the scope of the Common Commercial Policy, an area in which EC holds exclusive competence,
far beyond the traditional aspects of commercial policy.
Likewise, exclusivity based on pre-emption was confirmed as being
broad in scope, but the application of this principle was narrowly construed
compared with the AETR case and Rhine Navigation Opinion.
Competence was stressed as being an issue prior to efficiency considerations, which seemed to be the point of convergence when the Court established the basic principles of EC external relation law in the 70’s. Moreover,
the practical use of mixed agreements, which had been looked upon by the
Court with great caution, cf. the Rhine Navigation Opinion, may now be regarded as accepted also in principle. Those cases left the impression that
joint competence necessitates joint participation. Apparently, the duty of
close co-operation is a general consequence of joint competence, but the actual content of this duty is, however, still unclear.
2.2 Shared Powers - an Area of Future Disputes
In the 70’s, case law had provided only an outline of the notion of shared
powers. Another approach has been followed in the 90’s, where the Court
initially seemed to take the stand that whenever competence was shared,
joint action was required.122 The Member States in the SEA and TEU ex119
Part V, paragraph 7.
An independent reading of this statement could leave the impression that the Court established a general requirement that internal powers must be exercised before implied external powers can be acquired by the EC. See further Section 5.2.3.2.1 at note 215.
121
Operative part of the judgement, (1).
122
The ILO Opinion, paragraph 12.
120
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pressed a preference for shared powers. Recognition of shared powers was
evident in the last three cases discussed, and the three cases to follow confirm this practice. The cases just below contribute to a more refined view of
the consequences of non-exclusive competence.
In the Bangladesh case, the Court considered the possibility for the
Member States to act collectively outside the framework of the EC in an
area where competence was expressly shared.
Meeting in the Council, but acting in their capacity as states, the Member
States decided to provide humanitarian aid to Bangladesh following a natural disaster. The Parliament claimed this decision an act of the Council and
because such decision contains budgetary implications it should have been
adopted in accordance with Article 203 [now 272] EC, conferring a prerogative on budgetary matters on the Parliament.
In relation to the question of competence, the Court merely stated that
the Community did not hold exclusive competence in the field of humanitarian aid and therefore the Member States could exercise their competence
collectively inside or outside the Council. It seemed to be assumed that concurrent competence needed not necessarily be exercised by joint action.123
Autonomous action by the Member States in a field where competence
was expressly shared between the EC and the Member States was considered more thoroughly in the Fourth Lomé Convention case, which concerned the same question.
In this case, the Court held that since Community competence in the field
of development co-operation was not exclusive, Member States were competent to enter into commitments vis-à-vis non-member states either
individually, collectively or jointly with the Community.124 It emphasised in
that connection the duty of the Member States and the EC to co-ordinate
their policies on development co-operation and to consult each other on
their aid programmes and for the possibilities of joint actions, cf. Article
130x [now 180] EC.125
These cases show that also in fields where competence is expressly
shared, the Member States may individually or collectively act outside the
framework of the EC. This is in line with the general rule that where the
Community does not have exclusive competence the Member States may
act autonomously, cf. for example the Kramer case and the Second OECD
Opinion.126
The other side of this question was more controversial. It was still doubtful whether the Community could exercise its powers within these fields
without the participation of the Member States, and what consequences that
123
Paragraph 16, AG Jacobs is equally short on this matter (paragraph 28 in his opinion);
Tridiman & Eeckhout (1994), pp. 169.
124
Paragraph 26. AG Jacobs elaborated more on the consequences of concurrent competence in this field. He stated that the principle of pre-emption applied, but emphasised that
the exercise by the EC of its powers does not exclude Member States actions where competence is concurrent (paragraphs 46 and 49-51). See also Tridimas & Eeckhout (1994), pp.
171.
125
Paragraph 27.
126
The Second OECD Opinion, section V, paragraph 3.
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might produce on Member States powers. This was the issue in the India
Agreement case.
Originally, EC development co-operation agreements were based on Article 113 [now 133] EC in conjunction with Article 235 [now 308]. Articles
130u to 130y [now 177 to 181] were adopted by the TEU with the intention
of providing the EC with a legal instrument to conclude the so-called ”third
generation” agreements, which are broader in scope. The India Agreement
case arose from the first series of ”third generation” agreements.
The Council concluded the Co-operation Agreement between the Community and India on Partnership and Development on the basis of Articles
113 and 130y [now 133 and 181]. Respect for human rights was stated as an
”essential element”127 of the Agreement, cf. Article 1(1). Furthermore, the
Agreement contained provisions concerning co-operation inter alia in the
fields of energy, culture, intellectual property and drug abuse control. Portugal claimed that the Agreement should have been concluded as a mixed
agreement and that recourse should, furthermore, be had to Article 235 [now
308] EC. Thus, the Council decision on the conclusion of the Agreements
was invalid.128
First, the Court considered the human rights clause. Article 130u(2) [now
177(2)] explicitly required that respect for human rights and democratic
principles must be endorsed in the Community’s policy on development cooperation. The clause in Article 1(1) was part of the basis of the Agreement
and, thus, a subordinate principle to the specific fields of action included in
the Agreement. Respect of human rights did not constitute a specific field of
co-operation,129 and therefore the clause did not exclude Article 130y [now
181] EC as the proper legal basis for the Agreement.
Before the Court turned to the substantive provisions, it considered the
general nature of Title XVII of the Treaty (on development co-operation).
The Court took the view that, even though EC competence under that title
was complementary to that of the Member States, Article 130y [now 181]
EC would be ”devoid of substance”130 if the EC could never exercise powers under that Article without Member States participation. It was thus established that the EC on its own could conclude agreements on the basis of
Article 130y [now 181] EC.
In this connection, the Court emphasised that Article 25 of the Agreement explicitly stated that the Agreement did not affect the powers of the
Member States to undertake bilateral activities with India. The Court held
that the Agreement did not therefore pre-determine the division of powers in
the field of development cooperation.131
127
C-268/94, Paragraph 5.
Paragraph 13.
129
Paragraphs 24-29.
130
Paragraph 38.
131
Paragraph 47. AG Pergola in his opinion argued that concurrent competence in the field
of development policy did not conflict with Declaration 10, attached to the TEU, according
to which the AETR principle also applies to the field of development policy. Only ”where
the Community has adopted common rules for the achievement of a common policy, the
Member States … no longer have the power, acting either individually or collectively to
undertake obligation with third countries which affect those rules or alter their scope.” He
128
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Whether Article 130y [now 181] EC would suffice as a legal basis for
the Agreement depended on whether development co-operation could be regarded as its essential objective, cf. the well-established procedure laid
down in the Natural Rubber Opinion.
The Court held that the provisions concerning specific co-operation matters merely established the framework of co-operation between the contracting parties in these fields, since they did not contain any specification on
how co-operation should be implemented.132 The provisions did not, therefore, constitute objectives distinct from that of development co-operation.133
On this basis, the Court concluded that the Agreement fell within the scope
of Article 130y [now 181] EC and therefore the EC could conclude the
Agreement alone.
Thus, shared powers do not generally call for joint action. The legal consequences of non-exclusive powers seemed to depend on the nature of this
non-exclusivity.134 The India Agreement case hence established another
situation in which the mere existence of Community measures does not preempt Member States actions, cf. also the ILO Opinion. Moreover, the Court
applied an expansive interpretation of Article 130y [now 181] EC in the India Agreement case, which recalls the reasoning in the Local Cost Standard
and Natural Rubber Opinions,135 a method of interpretation, which the
Court had recently turned away from in relation to Article 113 [now 133]
(in the WTO Agreement and Second OECD Opinions).136
2.3 The Limits of Implied Powers - the ECHR Opinion
In France v. Commission, the Court stated that the principle of parallelism
does not extent to the division of powers between the institutions of the
Community. Parallelism only applies to the Community as such. Unless
other rules of procedure are expressly stated in the relevant Treaty provision
or in secondary legislation, international agreements are to be concluded on
the basis of the procedure laid down in Article 228 [now 300] EC regardless
of how internal measures should be adopted in that field.137
It was also in this period that the Court for the first time considered an
international agreement as falling wholly outside EC competence. The
scope ratione materiae of the principle of parallelism was at issue in the famous ECHR Opinion.
All the Member States of the EC are parties to the European Convention
on Human Rights along with a number of other countries. Despite the fact
found that this was not the case with the Development Cooperation Agreement with India.
See AG Pergola, paragraph 18, and generally paragraphs 14-20. On Declaration 10, see
Cremona (1999) p.156.
132
Paragraph 45.
133
With regard to the areas of co-operation scrutinised by the Court: Paragraphs 54, 63 and
76.
134
See further below, Section 6.3.3.2.
135
See above Section 1.2.2.
136
For comments on the India Agreement case, see: Cremona (1999), pp. 159; Burrows
(1997), pp. 594; and http://www.europa.eu.int/en/comm/dg17/28zapate.htm (30.10.2000).
137
See Kingston (1995).
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that a majority of the Member States supported the EC’s accession to the
Convention,138 doubt as to the legality of such accession made the Commission request the Court for an opinion on EC’s capability to accede the Convention before initiating negotiations on a possible accession.139
The Court pointed to the principle of conferred powers, formalised in Article 3b [now 5] EC, namely that implied external powers necessitate internal powers to attain the objective concerned.140 Since the Treaty did not contain express powers in the area of human rights, the Court considered
whether Article 235 [now 308] EC could constitute a proper legal basis for
accession.
It held that the purpose of Article 235 [now 308] EC was to fill the gaps
where no specific powers had been conferred to the Community but where
action was necessary in order for it to attain one of the objectives laid down
in the Treaty. Article 235 [now 308] EC could not be used outside the
framework created by the provisions of the Treaty and therefore it could
only constitute the legal basis for accession if protection of human rights
was regarded as an objective of the Community.
The Court held that respect for fundamental human rights formed part of
the general principle of law. Furthermore, respect for human rights is a prerequisite for Community acts to be lawful. However, accession to the Convention would substantially change the EC’s system of protecting human
rights and the EC would act beyond the framework of the Treaty.
Despite the central position human rights had in Community law, protection of human rights was not an objective of the EC. Furthermore, accession
would presuppose institutional changes of constitutional significance.141
Conclusively, a Treaty amendment was required before the EC would be
able to accede the Convention.142
The Court thus clarified the limits of implied powers by making an explicit link between the principle of conferred internal powers and that of implied external powers.143 For the first time in Community history, the Court
concluded, that the EC was not competent in a specific area.144 Recently, the
Court has made a corresponding conclusion in relation to internal powers,
cf. the Tobacco Directive case.
138
Eight of the fifteen EC Member States approved of an accession to the Convention for
the EC (Belgium, Denmark, Finland, Germany, Greece, Italy, Sweden and Austria). Five
(France, Portugal, Spain, Ireland and United Kingdom) expressed their opposition against
an accession due to the lacking legal basis, as well as they regarded human rights as being
contentiously protected by Community law as the law stood at that time.
139
The question of Community powers does not concern constraints in international law, cf.
also the ILO Opinion. According to the Convention only states can become parties.
140
Paragraphs 24-26.
141
Paragraphs 33 and 35.
142
After the Treaty of Amsterdam, the Community has powers to take action against discrimination, cf. Article 13 EC.
143
For Comments on this opinion see Cremona (1999), p. 150; Hartley (1998), pp. 169.
144
See to this: Weiler (1991), p. 2447.
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3. Concluding Remarks
Politically, the Member States in the SEA and TEU have recognised the
principle of parallelism by conferring express external powers in many new
areas of Community competence. All the new express external powers conferred to the EC in recent Treaty amendments are expressly shared. In addition, a new approach to harmonisation in internal market matters created a
legislative flexibility, which left room for autonomous Member States action. Finally, a new approach also to international agreements required
Member States participation in an increasing number of external activities.
During the 90’s, the Court gave a strict interpretation of the scope of Article 133. On the other hand, the old doctrine of the ”essential objective”
was adopted with respect to development policy, one of the new express
powers, and thus included in this policy could be a range of ancillary matters not directly related to this area. The reason for this difference will be
explored throughout Part II.
The conditions for the existence of implied powers have not been separately considered since the Rhine Navigation Opinion, apart from a superficial remark in the ILO Opinion. Existence of implied powers has been considered as part of the question of the exclusive nature of those powers. This
has contributed to basic doctrinal discrepancies in the literature on implied
powers, some of which will be examined below. Importantly, however, the
Court has now marked out the limits of the doctrine of implied powers.
The Court has developed less severe rules on exclusivity. A priori exclusivity with respect to Article 113 [now 133] still applies but the scope of the
Article has been narrowly construed. This new narrow interpretation of that
Article has raised legitimate concerns that the EC does not have a Common
Commercial Policy corresponding to that of a nation state.145 With Declaration 10, attached to the TEU, pre-emption was recognised politically also
with respect to some of the new express powers. Notwithstanding this, in a
line of recent cases, the Court limited the scope of the doctrine of preemption, thus restricting further the situations in which Member States loose
their powers. The principles on exclusivity established in the 70’s and the
Court’s practical application of these principles in the 90’s seem almost in
contradiction with one another. Part II, section 6.2 attempts to reconcile
principles and practical application in the area of exclusivity.
While the scope of a priori exclusivity and pre-emption was circumscribed, shared powers and joint action were the order of the day in the 90’s.
The use of mixed agreements seemed acceptable also within the framework
of the EC Treaty whenever competence is shared. Moreover, autonomous
actions both by the EC and the Member States are accepted in some situations of ”complementary” powers. Along with an increasing acceptance of
shared powers and mixed agreements came the introduction of the ”duty of
close co-operation” within the EC Treaty. This case-law created duty applies particularly to situations of shared powers. Presently, the law on shared
145
Bourgeois (1995), p. 779.
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powers is sketchy leaving basic questions still unanswered. Section 6.3 provides an answer to one of the core legal issues in future international relations involving situations of shared competence.
Conclusively, borders and legal reasoning clearly transformed in the law
of EC external powers during the 90’s. Part II will attempt to capture and
take into consideration these changes when presenting the current law of EC
external powers.
Part II
Current Law on EC External Powers
4. Introduction
The first part of this essay did not attempt to structure and consider in detail
the reasoning and consequences of the strong principles flowing from the
Court’s case law. Some legal principles have been firmly established while
others are still uncertain. The above version of the evolution of certain important features of EC external powers should now provide a useful background for examining the law in this area.
4.1 Some Definitions
Legal theory seems to agree to distinguish, for analytical purposes, between
competence and powers.146 Competence is normally understood as the legal
authority to act in a certain field of policy. Thus, competence is usually considered to relate to a given subject matter, e.g. agriculture, transport, trade
etc. Powers, on the other hand, are in the literature often defined as the legal
authority to use a particular legal instrument (and to the legal procedures)
by which competence is exercised. In EC external relations, powers may refer to e.g. conventional powers - (powers to conclude treaties with third
countries e.g. in the field of foreign trade, Article 133 (3)) or powers to act
autonomously (e.g. the use of measures to interrupt economic relations on
the basis of a common position or joint action taken pursuant to the TEU
according to Article 301 EC). In addition, powers may be subdivided into
norm-setting, executive, and judicial powers.147
Notwithstanding academic analysis, the EC Treaty seems to use both expressions interchangeably. Thus, with respect to the general limits of EC action, it refers to ”powers conferred” (e.g. in Articles 5, 7, and 300), whereas
in some of the new express external powers it refers to ”the Member States’
competence to negotiate in international bodies and to conclude international agreements” (e.g. Article 181). Likewise, the ECJ in its case law has
146
MacLeod et al. (1996), pp. 38 and Neuwahl (1991), p. 718. See also Tridimas and Eeckhout (1994), p. 144 and Dashwood (1996), p. 114.
147
See Neuwahl (1991), p. 718.
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avoided distinguishing in any consistent way between the two concepts.148
Apparently, the two words are used in the same sense as powers were described above.
In accordance with conventional legal theory, Part II will refer to the
more narrow concept of ”powers” conferred.149 It would lead to inaccuracy
to describe the EC as competent in a field without having regard to the specific powers vested in the institutions in this field. First, in no field of
Community activity are the powers defined by reference solely to subject
matter. Secondly, powers will always be subject to the more or less circumscribed objectives expressed,150 the law-making structures, and the legal instruments available in the EC Treaty.
The legal analysis in this part of the paper is concerned principally with
the norm-setting powers of the Community to act internationally, whether
by conventional or unilateral measures.151 Part II will focus primarily on the
extent to which the EC and the Member States, respectively, have (autonomous) decision-making powers to adopt measures or enter into international
agreements concerning a specific subject matter. Notwithstanding this conception of the core subject matter of EC external powers, the principles often do apply also to other external powers of the Community, e.g. executive
powers.152
4.2 Structure
The Court of Justice is the supreme interpreter of the law of the Community,
cf. Article 221 and the First EEA Opinion. Consequently, the structure in
this part of the essay will be guided by the ECJ’s own analytical approach.
In the ILO Opinion, the Court introduced its methodology in paragraphs 712. The opening words were:
“Before examining whether Convention No. 170 falls within the scope of the Community’s competence and whether the Community’s competence is exclusive...”153
Thus, Part II will have as its analytical basis a separation of two questions:
Do powers exist for the Community to act externally; i.e. is the Community
148
For instance, in the AETR case, paragraph 28, the ECJ held that the Community had
“power to enter into any agreement with third countries relating to the subject-matter,”
while in the India Agreement case, paragraph 36 it stated that “the Community has specific
competence to conclude agreements with non-member countries.” This confusion of the
terms is even more evident in France v. Commission where the ECJ in the same judgment
uses the two terms interchangeably; compare paragraphs 37 and 42. See also Tridimas and
Eeckhout (1994), p. 144.
149
In quotations, the word ”competence” will of course be used when necessary.
150
In Title XII on culture, for example, Article 151(2) carefully limits the areas in which
the EC may act.
151
This is also sometimes referred to as the scope of powers ratione materiae.
152
Particularly, the notion of exclusivity seems to be regarded as a limitation on the Member States only with respect to their norm-setting powers. See Neuwahl (1991), p. 719. By
contrast, the question of existence of powers seems to apply to a variety of different powers, including executive and judicial powers.
153
Paragraph 7, emphasis added.
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authorised to act in a given area at all? If so, what is the legal nature of these
powers; i.e. are they exclusive or non-exclusive?
5. The Sources of EC External Powers
The natural starting-point in an analysis of the external powers of the EC
should be the principle of conferred powers. The Community may act only
within the limits of the powers conferred to it, both in the internal and the
external sphere, cf. Articles 5 and 7 and the ECHR Opinion.154 Thus, the
presumption is that general competence in external relations lies with the
Member States, and only if and in so far as the Treaty confers specified
powers to the EC will the institutions be authorised to act.
The Court established in its earliest case law that the EC has legal capacity to undertake international commitments within the whole field of objectives covered by the Treaty, cf. Article 210 [now 281], see Sections 1.1 and
1.2.1.1. The authority to conduct external activities may be either expressly
stated in or flow by implication from the provisions of the Treaty.155
In principle, nothing prevents one measure from having several legal
bases, but where different legal bases call for distinct decision-making procedures it is necessary to choose between them.156 The importance of this
choice is obvious: Some procedures are supranational in character whereas
others essentially resemble intergovernmental decision-making. Also the
complex decision-making processes within the EC show varying degrees of
supranationalism; compare Article 133 (common commercial policy) with
Article 67 (immigration, asylum etc).157
The procedural requirements for exercising external powers are contained in Article 300 EC. The general rule is that the Council shall act by
qualified majority in this sphere. However, where the substantive legal basis
requires unanimity for adoption of internal measures, the Council shall act
unanimously also in the external field, cf. Article 300 (2) EC.
There have been attempts in legal theory to set up a hierarchy within the
power-conferring provisions,158 but the Court has not followed this approach. Instead, the proper legal basis has been determined by comparing
the ”essential objective” of the (envisaged) act to the objectives of the relevant power-conferring rules.159 The Court has applied this principle in order
to choose between two apparently equally adequate legal bases both with respect to internal (see notably the Titanium Dioxide and the Waste Directive
cases) and external measures (the Natural Rubber Opinion and India
Agreement case).
154
Paragraphs 23 and 24.
The AETR case, paragraphs 13-16 and the Kramer case, paragraphs 17/18 and 19/20, the
ILO Opinion, paragraph 7.
156
MacLeod et al. (1996), pp. 84 and Dashwood (1998b), pp. 1023.
157
Cremona (1994b), pp. 247. See with respect to the interplay between the EC and the EU
in immigration matters, Monar (1998), esp. pp. 323.
158
Chalmers (1998), pp. 213.
159
Chalmers (1998), p. 220; MacLeod et al. (1996), p. 82. Generally on the choice between
different legal bases: Emiliou (1994).
155
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5.1 Express External Powers
5.1.1 Concept and Rationale
That the Community holds ”express external powers” means that the EC
Treaty has explicitly transferred powers to the Community to act in the external sphere.
The powers available for the Community vary depending on the particular field.160 For instance, in the field of common commercial policy, the
Community has powers to conclude international agreements as well as to
enact autonomous measures. In other areas only very limited powers are
transferred to the Community to pursue its objectives, e.g. within the fields
of culture and public health the Community has powers to ”foster cooperation”, cf. Articles 151(3) and 152(3) EC.
Originally, the EC Treaty contained only few provisions expressly conferring external powers.161 Recently, the Member States have acknowledged
the advantages of conferring external powers expressly by the Treaty instead of relying on the doctrine of implied powers. This may also be due to
a political recognition of the interrelationship between the internal and the
external sphere.162 Compared to implied powers, express conferment of
powers enables the Member States to control more precisely the transfer of
competence and e.g. to provide the Community with different powers internally and externally.163 However, the Court has applied a doctrine of implied powers also to purely internal powers.164 From a Member States point
of view there is a ”risk” that the doctrine will apply likewise to express external powers with the consequence that the ECJ will allow for the use of
other external powers than those expressly conferred.165 A thorough outlining of the limits of express Community powers arguably reduces the scope
of implied powers.166
5.1.2 Scope
The exact scope of the Community’s express external powers cannot be laid
down in the abstract but is determined on a case-by-case basis.167 From the
160
For further elaboration on different legal instruments to pursue Community objectives in
the external sphere, see MacLeod et al. (1996), pp. 45.
161
Articles 113 [now 133], 228 [now 300], and 238 [now 310].
162
Cremona (1999), pp. 147.
163
Article 133 (5) ToA is probably an example. The Article allowed the Council by unanimity to create external powers (in the field of services and intellectual property), which
the EC arguably does not possess internally. Dashwood (1998b), p. 1022.
164
The Immigration case.
165
MacLeod et al. (1996), pp. 47 and p. 297 argue that in fields where the Community has
express powers to foster co-operation, powers to conclude international agreements to secure such co-operation may flow by implication from these provisions.
166
Craig and de Búrca (1998), p. 114; Dashwood (1996), p. 122. The tight drafting of the
powers conferred by the Maastricht Treaty should restrict the existence of implied external
powers. For instance, in the fields of culture and education the Treaty contains an explicit
prohibition of the use of external harmonisation measures (see Articles 149(4) and 151(5)
EC). A more recent example of this is the Draft Article 133 adopted in Nice.
167
Neuwahl (1991), pp. 723.
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Court’s case law, it is possible to identify some general factors relevant for
the interpretation.
Generally, the Court has used a teleological interpretation of the Treaty
in order to secure the effective functioning of Community law and the attainment of Community objectives. However, the effet utile principle has recently competed with a stricter interpretation of the principle of enumerated
powers and more pragmatic considerations in the Court’s case law, cf. inter
alia the WTO Agreement Opinion.168
The scope of express external powers depends first and foremost on the
objectives of the particular Article and the principles underlying that policy.169 Moreover, also other less objective factors may influence the limits
of specific Community powers. Furthermore, the fact that Member States
hold external powers within the areas covered by the second and third pillars of the TEU may affect the interpretation of the scope of EC external
powers.170
5.1.2.1 Objective Criteria
In order to facilitate judicial review of the legality of Community activities,
the Community must state the reason on which it bases its actions, cf. Article 253, and it must identify its choice of legal basis. The Court has established that this choice must be based on objective criteria.171
The scope of the power-conferring Articles is determined by comparing
the aim and content of an international act with the objectives of the relevant
Treaty Articles. For this purpose, the Court has developed the ”essential objective” doctrine. According to this, a power-conferring Article also embraces international acts concerning matters, which do not strictly fall within
the objective of the power-conferring provisions. As long as the essential
objective of the act falls within the scope of the relevant Treaty Article,
”ancillary matters” may be included if they cannot be regarded as distinct
from the essential objective.
In the Natural Rubber Opinion the Court held that the essential object of
the Agreement was to stabilize prices for natural rubber. The fact that the
agreement covered subject matters such as labour conditions and technological assistance and that it had links to general economic policy did not
exclude the application of Article 113 [now 133] EC. More recently, the
Court held in the India Agreement case that ”the fact that a development cooperation agreement contains clauses concerning various specific matters
cannot alter the characterization of the agreement, which must be determined having regard to its essential object and not in terms of individual
clauses”.172 Thus, clauses on inter alia intellectual property, energy and re-
168
Dashwood (1996), pp. 115; Chalmers (1998), p. 208; Tridimas & Eeckhout (1994), p.
149.
169
Chalmers (1998), pp. 220.
170
See Section 2 at note 72.
171
The Titanium Dioxide case. Chalmers (1998), p. 214; Emiliou (1996), p. 305; Emiliou
(1994), p. 492.
172
Paragraph 49.
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spect for human rights were included under the scope of Article 181 EC on
development policy.
5.1.2.2 Other (Pragmatic) Factors
Some authors suggest that also pragmatic reasons influence the Court in EC
external relations, and the development of the Court’s case law seems to
support this. The issues discussed just below are not strictly legal since
pragmatism has, obviously, never been explicit in the case law of the
ECJ.173
Legally, the existence (or scope) of Community competence is determined before the question of exclusivity is considered. However, the two issues may in practice interact. This interaction could be a possible explanation of the remarkably different reasoning in the WTO Agreement Opinion
and the India Agreement case: The conservative interpretation of Article
133 EC in the WTO Agreement and the Second OECD Opinions174 contrast
with the expansive interpretation of Article 181 EC in the India Agreement
case. It is possible that pragmatic considerations on the effects of exclusivity
may influence the scope of Community powers. Community powers under
Article 133 are exclusive a priori, whereas exercise of Community powers
under Article 181 did not exclude Member State powers.175 Member States
are more inclined to transfer powers to the Community if at the same time
they retain powers themselves; hence an expansive interpretation of Community competence is less controversial in areas where powers are shared.
MacLeod et al. (1996) explain the lack of express powers to conclude
agreements in e.g. the fields of culture and public health, by the Member
States being particularly sensitive in relation to those areas.176 Presumably
the political sensitivity of the issue in question will influence the Court’s
teleological interpretation of the Treaty. An explicit prohibition of adoption
of harmonisation measures or a limited conferral of external power in an
area may signal sensitivity, and thus influence the interpretation of the scope
of these power-conferring provisions.
5.1.3 Concluding Remarks
Whether an (envisaged) external act can be based on a specific express external power depends on the aim and the content of the act in question. The
essential objective of the external act has to fall within the objectives of the
power-conferring Article and it must be based on the principles underlying
the policy to which relates. However, an understanding of the Court’s teleological interpretation and practical approach to EC external relations is imperative when considering the limits of express powers.
173
Tridimas & Eeckhout (1994); Cremona (1999), p. 152.
Bourgeois (1995), pp. 779 held that after the WTO Agreement Opinion, the Common
Commercial Policy could no longer be regarded as corresponding to that of a nation state.
175
The Member States conferred several new external powers on the Community by the
SEA and the TEU, but these powers were expressly shared with the Member States. This
indicates that the Member States are not concerned with conferring powers. They are however keen on retaining concurrent powers.
176
MacLeod et al. (1996) pp. 47 and p. 297.
174
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There is a tendency, possibly as a result of the Court’s expansive interpretation of Community powers in the 70’s, to draft new provisions on powers narrowly and to spell out what the Community is not empowered to
do.177 Furthermore, whenever new internal powers are conferred upon the
Community parallel express external powers are often given simultaneously.
5.2 Implied External Powers
5.2.1 Concept
It is now well-established that external powers may not only arise from express attribution in a Treaty article, but equally may flow by implication
from other parts of the Treaty or from internal measures adopted pursuant to
the Treaty.
The rationale for implied external powers has been examined in some detail in Section 1.1. Essentially, it is based on the effective functioning of the
Community, the effet utile principle.178 There is a strong argument for regarding the internal objectives and powers of the EC Treaty as implying a
parallel power to act externally whenever it is necessary to achieve these objectives. It would be impractical if the common policies had to stop at the
Community’s borders. Moreover, in some instances, it would be impossible
to achieve Community objectives without entering into international commitments.179
Implied powers are powers not expressly conferred in the Treaty, but following from interpretation of the Treaty. The Court has consistently held
that to determine in a particular case whether the EC has authority to act internationally, regard must be had both to the whole scheme of the Treaty
and to its substantive provisions.180 Besides this broad statement, the Court
has provided only small guidance for determining when implied external
powers exist. On several occasions, the ECJ has added that:
“whenever Community law has created for the institutions of the Community powers within its internal system for the purpose of attaining a specific objective, the
Community has authority to enter into the international commitments necessary for
the attainment of that objective.”181
177
Dashwood (1996), p. 122.
Dashwood (1996), p. 125: “The natural way of interpreting an express grant of powers is
that they are to apply as needed, internally or externally, in furtherance of the objectives
specified in the relevant Treaty Articles.” See also Kapteyn (1998), p. 1257, Dashwood
(1998a), pp. 114 and MacLeod et al. (1996), p. 48, and more generally Weiler (1983) and
Weiler (1991). For an account of the rationale and scope of implied internal powers, see
Kapteyn (1998), pp. 240, Craig and de Búrca (1998), pp. 110, Hartley (1998), pp. 102-103.
179
The Rhine Navigation Opinion.
180
The AETR case, paragraph 16; the Kramer case, paragraphs 19/20; the ILO Opinion,
paragraph 7.
181
The Rhine Navigation Opinion, paragraph 3, the ILO Opinion, paragraph 7, the ECHR
Opinion, paragraph 26. This is sometimes referred to as the Rhine Navigation or Opinion
1/76 principle. However, in accordance with the Court’s vocabulary (the WTO Agreement
Opinion, paragraph 99) we have reserved this expression for pre-emption, see Section
6.2.4.
178
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However, on these occasions the introductory words to this formula have
consistently been: “The Court has concluded inter alia that…”; “The Court
concluded, in particular, that…”; “The Court has held, in particular,
that…”182 Thus, on its face, the ECJ launches only an example of when implied powers may arise, and other situations may appear in the future. Notwithstanding this, it is difficult to imagine any situation in which implied
external powers exist without these basic conditions being satisfied. Accordingly, on the only occasion where the ECJ has held that the EC was not
competent to enter into an international agreement and that this could not be
cured, the ECJ refused the existence of implied powers solely because these
conditions were not met.183 Hence, contrary to the cautious wording of the
case law, it is assumed that the Court here stipulates general criteria for the
existence of implied external powers.
Consequently, the above quotation, originating from the Rhine Navigation Opinion, must be regarded as the guiding concept of implied powers in
EC external relations. For analytical purposes, the sentence can be divided
into two distinct conditions. First, Community law must have created powers within its internal system to attain a specific objective and, secondly, it
must be necessary to exercise external activity for the attainment of this objective.
5.2.2 The Requirement of Parallelism
The first condition can be subdivided into two related but distinct requirements.
First, defining the purpose and scope of the Treaty objectives or policies
conferring internal powers is the first step in determining whether the EC
has external powers by implication. Accordingly, the Court has in its case
law often started by referring to the objectives or effects of the disputed or
envisaged external act and compared this to certain Treaty objectives or
policies.184
These objectives constitute of course the outer boundaries of implied
powers. In the ECHR Opinion, the Court ruled that enacting rules on human
rights were outside the scope of the Treaty objectives, and thus implied
powers could not exist. Similarly, in the WTO Agreement Opinion, the
Court made clear that the EC Treaty provides internal powers to regulate
matters relating to establishment and provision of services of nationals of
Member States within the internal market. However, the objectives do not
include powers to pursue the objective of regulating similar matters relating
to third country nationals. Thus, the EC cannot pursue new external ends
with reference to similar internal ends.185
182
Ibid.
The ECHR Opinion, paragraphs 26-28. This seems also to be the foundation of implied
internal powers, see the Immigration case, paragraph 28.
184
See e.g. the AETR case, paragraphs 23-27 and the Kramer case, paragraphs 21/25.
185
This is implied in Paragraph 81 of the Opinion. In the particular situation, the ECJ did
not conclude that there were no external powers within the field of first establishment of
non-Member nationals, compare paragraph 90.
183
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153
Secondly, the Community must have parallel internal powers.186 It has
sometimes been asserted that the EC needs to possess express internal powers to act in order for implied external powers to exist.187 The reason for this
is of course also founded on the principle of conferred powers. There need
to be indications that the Treaty has empowered the EC to act in the relevant
field.188 Arguably, the ECHR Opinion could be read as stating that there was
no express internal (or external) powers to enact rules on human rights, and
that therefore implied external powers did not exist.189
However, the Court’s statement in the Rhine Navigation Opinion is
broader in principle, allowing for external powers whenever Community
law has created within its internal system powers to achieve a certain objective. The ECHR Opinion has to be considered in light of the fact that there
are neither express nor implied internal powers in the field of human rights.
Should the EC need to pursue a Treaty objective where it has adopted internal measures on the basis of the doctrine of implied internal powers, nothing
in the Court’s case law excludes the possibility that parallel external powers
exist if they are necessary for the attainment of this objective. On the contrary, there are sound reasons for this interpretation of the principle of parallelism.190 Consequently, the doctrine of implied external powers probably
also applies to situations where the EC only possesses internal powers by
implication.
Furthermore, Article 308 can in principle constitute the necessary legal
basis for implied external powers.191
5.2.3 The Necessity to Act Externally
The second condition requires that in order for implied external powers to
exist it must be necessary to act externally for the attainment of an objective
laid down by the EC Treaty. This is in harmony with the underlying rationale of implied powers. Furthermore, it is in accordance with the principle of
186
There is a requirement of parallelism also with respect to internal and external legal instruments. For example, Article 137 allows only for adoption of minimum requirements.
This restriction applies also with respect to international agreements, cf. the ILO Opinion,
paragraph 18. Parallelism between internal and external powers only applies to the Community as such. The inter-institutional division of powers is not subject to the principle of
parallelism, cf. France v. Commission.
187
Dashwood (1998a), p. 122.
188
Independent express external powers will of course suffice even in the absence of parallel internal powers; see Section 5.1.1.
189
Paragraphs 27-28.
190
An example can be modelled on the Immigration case. In this case, the ECJ held that the
EC (even in the absence of express provisions in the Treaty) had internal powers to establish by a binding decision an information system in relation to Member States migrant policies affecting third country national workers. Should the EC need to include third countries
(e.g. applicants for membership to the EU) in this information system by means of international agreements in order to make the system more effective, it is unlikely that external
powers by implication do not exist.
191
The ECHR Opinion, paragraph 28ff, the WTO Agreement Opinion, paragraphs 89 and
99.
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subsidiarity, cf. Article 5.192 It should thus apply in every situation of implied Community powers.193
However, the substantive requirements contained in this necessity-test
remain the focal unsolved problem with respect to implied powers. The basis should probably be a comparison of, on the one hand, the Treaty objectives pursued and the established internal system with, on the other hand,
the (envisaged) external act. Thus, it is not completely within the political
discretion of the legislative institutions to decide to exercise parallel external powers.194 Nor is it, however, a rigid ”proportionality” test where the EC
should prove that this is the only way to achieve Community objectives.195
As case law stands at present, it seems that a number of related factors contribute to the need to have implied external powers in a particular case. A
case-by-case examination, well known in other areas of Community law, is
required.
It is important to remember that the factors discussed below are not exhaustive. There may be other circumstances contributing to the existence of
implied external powers. In general the Court has stipulated that implied
powers may flow either from Treaty Articles (Section 5.2.3.1) or from
measures adopted by the institutions pursuant to the Treaty (Section
5.2.3.2).196 The relevance of the second situation remains, however, questionable.
5.2.3.1 Implied External Powers Flow Directly from Treaty Articles
Whether Treaty articles in themselves provide the sufficient basis for implied powers depends on their nature and the intensity with which they regulate a particular subject matter. Some areas of policy have strong external
implications, such as transport197 and fisheries,198 whereas others do not
necessarily entail external activity, e.g. freedom of establishment for Com192
See Chalmers (1998), pp. 221-233; Craig and de Búrca (1998), p. 127. The substantive
requirements (if any) of subsidiarity in the legislative process are different from the ”necessity”-criterion.
193
This is probably also the case with implied internal powers, Immigration case, paragraphs 27-28.
194
Subsequent to the legal debate about the Rhine Navigation Opinion, but before the case
law of the 90’s, Weiler (1983), p. 70, at note 120, concludes: “It is difficult to establish
whether ”necessary” is a political concept leaving absolute discretion to the institutions (effectively Council) or whether it can be given a binding juridical content.” See also Hardy
(1977), p. 588, and Section 1.2.1.2 at note 46.
195
Bourgeois (1995), p. 780, annoyed with the whole outcome of the WTO Agreement
Opinion, concludes: “The criterion of “necessity” of Opinion 1/76 on which the existence
of implied external powers depended is now supplemented by a “proportionality” test, i.e.
even if external action by the EC may be necessary, one should assess whether the aim
could not be achieved by e.g. a concerted action of Member States.” The flaw in this reasoning is considered below.
196
Thus, a distinction within the concept of implied powers can be made between (1) powers flowing solely by ”implication” from a Treaty Article (e.g. the Rhine Navigation Opinion, paragraph 5), and (2) powers ”derived” from a Treaty Article by virtue of adoption of
internal measures (e.g. the AETR case, paragraph 28). See to this MacLeod et al. (1996), p.
45, note 42.
197
The AETR case, paragraphs 25-27, the WTO Agreement Opinion, paragraph 81.
198
The Kramer case.
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munity nationals within the Community.199 Some Treaty Articles lay down
detailed rules on the policy to be pursued and on the internal powers conferred.200 These Articles sometimes in themselves imply that the EC has a
corresponding external power.
The Rhine Navigation Opinion provides the most obvious example of internal powers implying an external power. The Court in that case held that
implied exclusive powers exist if Treaty objectives could not be attained
without acting internationally. Articles 70 and 71 include in the objectives
of the common transport policy the rationalisation of inland waterways, and
they allow the Council to lay down “any other appropriate provisions.” In
the Rhine Navigation Opinion,201 the Court held that implied powers existed
with respect to rationalisation of inland waterways, solely with reference to
these Treaty Articles.
Authors have subsequently considered this situation as a special case of
existence of implied powers.202 As mentioned, the underlying rationale for
the existence of implied powers are broad efficiency considerations. The
more obvious it is that the EC cannot achieve its objectives solely by adopting internal measures, the more obvious is the existence of parallel external
powers. If the Treaty objectives cannot at all be achieved without the EC entering into international commitments, then the necessary powers exist from
the outset, before the exercise of internal powers. However, the relevant
question is still whether a Community objective can be facilitated by the exercise of external powers.203 Thus, in terms of legal principles, the facts of
the Rhine Navigation Opinion cannot be considered a special category of
implied powers. The Court has recently reiterated the so-called Opinion
1/76 principle in relation to the question of exclusivity, cf. the WTO Agreement and Second OECD Opinions (see below, Section 6.2.4). With respect
to pre-emption, the facts of the Rhine Navigation Opinion still merit special
attention.
Less obvious situations exist. EC competition policy, cf. Articles 81 to
89 has many external implications, and is extensively regulated in the EC
Treaty. It is generally accepted that the EC possesses external powers to enter into international agreements solely on the basis of these Articles in order to achieve the objectives of EC competition policy. In the Second EEA
Opinion,204 the Court recognised the existence of implied powers flowing
from the provisions relating to competition.
Another area where external powers flow directly from Treaty Articles
conferring internal powers is the field of fisheries conservation. This area is
not regulated in detail in the Treaty. However, the nature of a common policy on fisheries conservation is such that it would be pointless to regards
this as solely an internal enterprise. In the Kramer case205 the Court held
199
The WTO Agreement and Second OECD Opinions.
E.g. the rules on competition.
201
Paragraph 5.
202
Bourgeois (1995), pp. 780, quoted above, note 195. A less extreme view is expressed in
MacLeod et al (1996), pp. 50.
203
Dashwood (1996), p. 125.
204
Paragraphs 32 and 33. See Burrows (1993), p. 66.
205
Paragraphs 30/33. MacLeod et al (1996), p. 53.
200
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that even though the regulations adopted did not cover the relevant field, Article 102 in the Act of Accession206 created the necessary basis for implied
powers.207
At the other end of the scale are situations in which the external dimension of an internal policy is less evident.
At present it is unclear whether also broad power-conferring Treaty Articles in themselves provide implied external powers to pursue all ends potentially covered by these Articles. In the WTO Agreement Opinion some
Member States alleged that the EC was not competent at all to enter into the
TRIPs Agreement. The Court replied:
“The Community is certainly competent to harmonize national rules on those matters, in so far as, in the words of Article 100 [now 94] of the Treaty, they ”directly
affect the establishment or the functioning of the common market”. But the fact remains that the Community institutions have not hitherto exercised their powers.”208
Conclusively, the Community and the Member States were jointly competent to conclude the TRIPs. The Court’s answer is unclear. However, the
reasoning could imply that a conferred internal power in itself creates implied external powers (see below, Section 5.2.3.2.1).209 If this is the case, the
requirement that it should be necessary to act externally in order to pursue a
Treaty objective involves only an abstract interpretation of the Treaty Articles.
External efficiency, cohesion, unity, common identity etc. have sometimes been suggested as supporting the existence of implied external powers. In the AETR case, the ECJ considered third countries’ point of view,
and the effect of the division of powers on the successful outcome of international negotiations. In that case, these circumstances led to the conclusion
that the Member States could negotiate and conclude the agreement in question. Conversely, in recent cases, the Commission has argued that the
Community should possess exclusive powers to conclude an agreement
alone because of the need to ensure unity and efficient action in the international sphere. However, here the ECJ held that the Community could not
acquire powers solely because it would be more convenient or efficient that
the EC acted alone in international matters. The allocation of competence
between the EC and the Member States cannot depend on problems in the
implementation of an international agreement, the former being a prior issue.210 Consequently, external efficiency considerations cannot give rise to
new implied powers.
206
Though, strictly speaking, the Act of Accession is not part of the EC Treaty, its provisions have the same legal status as Treaty Articles.
207
See also Commission v. United Kingdom.
208
Paragraph 24.
209
This reading of the WTO Agreement Opinion also finds some support in recent cases law
relating to the TRIPs Agreement. In the Hermes and Christian Dior cases, the ECJ assumed
jurisdiction over the whole area covered by TRIPs. This seems to imply that the EC has potential implied powers over the whole field.
210
The WTO Agreement Opinion, paragraph 107. Though the argument was put forward
with respect to exclusivity, it applies also to the question of whether implied powers exist.
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It is in these latter situations in which the need for external action is less
obvious or justified that the principle of ”derived” implied powers might be
applicable.
5.2.3.2 ”Derived” Implied Powers – Internal Measures May Create New
External Powers
5.2.3.2.1 The Theoretical Dispute
Part I shows that the case law on implied powers focuses to a large extent on
the internal rules laid down in the area. In academic literature on this problem, there seems to be basic doctrinal discrepancies concerning the importance of internal measures covering the area in which the EC wishes to act
externally. The question is whether exercise of internal powers may sometimes be necessary for the existence of implied external powers. MacLeod
et al. (1996), p. 49 hold that:
“In principle, the adoption of internal measures by the Community can give rise by
implication to a power to act externally in the area covered by the measures” (emphasis added).211
Dashwood (1998a), p. 122, on the other hand, asserts that:
“The procedure to follow in particular cases may be summarised as follows: first,
determine the particular scope of the objective for which competence to act by way
of an internal Community measure has been expressly conferred; then, consider
whether external action of the kind contemplated by the proposed agreement would
contribute towards the attainment of that particular objective in any of its aspects; if
so, there will be implied competence to enter into the agreement.” 212
As can be seen, Dashwood does not in general consider the adoption of internal measures of relevance to the question of existence of implied powers.213 Potential internal powers seem to be the determinant factor.
Some reasoning in the case law seems to support the views of Dashwood, Tridimas and Eeckhout. Broad power-conferring Treaty Articles, e.g.
Articles 94, 95, and 308, may in themselves provide the necessary basis for
the existence of implied external powers (see above, Section 5.2.3.1). In the
WTO Agreement Opinion, the Court dealt with the question of whether implied powers were exclusive. However, paragraphs 73-105 could be read as
indicating that the Community is potentially competent to enter into the
GATS and TRIPs Agreements on the basis of inter alia Article 100a [now
211
See also MacLeod et al. (1996), p. 45, note 42; and Bourgeois (1995), p. 779.
See also Tridimas and Eeckhout (1994), p. 154: “The principle of parallelism does not
mean that the Community is conferred competence over external trade in services simply
because of its competence in relation to internal movements of services. The principle only
means that the Community may conclude an agreement on services in so far as the subjectmatter of that agreement falls within its competence” (emphasis added). See also Gulmann
(1995), p. 233.
213
He does, however, hold that in the special situations where a directive expressly authorises the negotiation of agreements, the adoption of internal measures may be relevant in itself. See below, Section 5.2.3.2.2.
212
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95], but that this competence is shared with the Member States.214 Arguably,
if the need to act externally can be derived solely from these bases, internal
measures have no importance (any more) to the question of existence of implied powers.
In the Second OECD Opinion, the Court held that the EC did not (at that
time) have exclusive implied powers to conclude the Third Decision on the
basis of inter alia Articles 57(2) and 100a [now 47 (2) and 95]. The measures adopted “do not cover all the fields of activity to which the Third Decision relates. It follows that the Community is competent to participate in
the Third Decision, but that such competence does not cover all matters to
which that decision relates.”215 The Court at first sight concludes that there
is no competence due to the fact that there are no internal rules in the area.
However, the ECJ considered the question of implied powers and exclusivity at once. Thus, probably the statement only relates to exclusive Community competence, cf. Section 2.1.3.
In the ILO case, the Court held:
“The Community thus enjoys an internal legislative competence in the area of social
policy. Consequently, Convention No 170, whose subject-matter coincides, moreover, with that of several directives adopted under Article 118a, falls within the
Community’s area of competence.”216
By using the word “moreover”, the Court seems to treat the fact that directives in the area are adopted as evidence supporting the existence of external
implied powers.217
Notwithstanding these ambiguous passages, several statements by the
Court clearly suggest that the adoption of internal measure may create new
external powers. The Court has repeatedly said:
“Such authority may equally flow implicitly from measures adopted by the Community institutions.”218
This directly indicates that internal measures are sometimes necessary for
the existence of implied powers. In light of the fact that the ECJ distin214
See paragraph 104 quoted above. Rosas (1998), pp. 131, particularly note 35. Tridimas
and Eeckhout (1994), pp. 173.
215
Section V, paragraphs 6-7. Emphasis added.
216
Paragraph 17, emphasis added.
217
See, however, Weatherill (1995), p. 143, who suggests that the fact that directives coincided with the subject matter of Convention 170 was regarded by the Court as merely confirming that also the Convention fell within the subject matter of Article 118a [now 138].
This reading of the ILO Opinion is questionable. In the WTO Agreement Opinion the Court
held that institutional practice could not alter the division of competence between the EC
and the Member States. In the light of this statement, the Court’s reference to directives in
the ILO Opinion cannot be seen as merely confirming that the Convention was within the
scope of Community competence.
218
The Kramer case, paragraph 20, and repeated in the ILO Opinion, paragraph 7. In the
AETR case at paragraph 28, the Court said: “[T]he bringing into force…of Regulation No.
543/69…necessarily vested in the Community power to enter into any agreement with third
countries relating to the subject-matter governed by that Regulation.” See also paragraph
66.
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guished clearly in the ILO Opinion between the existence and the nature of
Community powers, and that paragraph 17 is concerned solely with the
existence of powers, it is clear that internal rules are not in general regarded
as a condition for the existence of implied powers.219 However, it must be
assumed on the basis of particularly the ILO Opinion, paragraph 7, and the
Kramer case, paragraph 20, that internal measures may in some situations
create a new need to act externally.
It is easy to understand the reason why the Court should emphasise the
position of internal rules. Implied powers have not been conferred expressly, and it is therefore a prerequisite for their existence that they are
necessary in order to facilitate the attainment of explicit objectives. The implementation of an internal system of binding rules often creates new needs,
including a need to enter into international commitments in the area. With a
view to determine whether a policy objective can be facilitated by adopting
external acts, the EC in general has to elaborate on its policy by means of
internal measures. Thus, the better view at this time of the day is probably
that exercise of internal powers may sometimes be necessary for the existence of implied powers.220
5.2.3.2.2 Internal Powers Exercised in the Field
Potentially wide internal powers, such as Articles 94, 95, and 308, will in
principle be able to serve as a basis for implied external powers.221 However, it may appear that such Treaty Articles in themselves do not provide
sufficient evidence of the need to act externally. In this case, the exercise of
internal powers, e.g. the adoption of directives or regulations in the field,
may over time create a need to enter into international commitments. As and
when internal measures make it necessary to assume international commitments in order to achieve a Community objective, the ECJ has held that the
EC possesses the powers to achieve these objectives.
Among the academics who contend that implied powers may be derived
from internal measures there seems to be some disagreement on what is important: Is the relevant issue the mere adoption or putting into force of
measures or is it the exercise of powers within the area in question?222 Con219
The Rhine Navigation Opinion, paragraphs 3 and 4. This is a clear example of a difference between the doctrine of implied powers and pre-emption, cf. Section 6.2.4.
220
The importance of exercising internal powers in order to create implied external powers
may also depend on the nature of the external powers in question, cf. Section 5.1.2.2.
221
See respectively the WTO Agreement Opinion, paragraph 104, the Second OECD Opinion, paragraphs 6and 7, and the ECHR Opinion, paragraph 29ff.
222
In Kramer regulations had been put into force in the field of fisheries policies, though
these regulations did not cover the whole scope of the Recommendation in question; see
Section 1.2.1.1. MacLeod et al. (1996), pp. 49 suggest that ”adoption of internal measures”
was one factor determining that the EC possessed implied external powers. Pescatore
(1979), pp. 619 likewise assumes that the question concerns the importance of ”the prior
putting into force of internal rules”. Another reading of the case is implicit in Hardy (1977),
p. 586, Waelbroeck (1982), p. 569, Cremona (1999), p. 140, Hartley (1998), p. 163, and
Dashwood (1998a), p. 119. These authors contend that powers had not been ”exercised” or
”used” in the field (and therefore the facts of Kramer were similar to the Rhine Navigation
Opinion). See also Tridimas and Eeckhout (1994), pp. 150 and, interestingly in opposition
with her more recent account of the case, Cremona (1982), pp. 395.
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sidering the reasons for allowing internal measures to create new external
powers (i.e. evidence in support of a need to act) and the general rationale
for implied powers (i.e. efficient achievement of Community objectives) the
proper view must be that the existence of external powers sometimes depends on whether internal powers have been exercised in the field concerned. It cannot be of relevance for the efficient achievement of Treaty objectives whether some other question within the same area of policy is regulated prior to the external activity. The relevant question is whether the
adoption of internal measures in order to achieve any Treaty objective creates a (new) need to engage in international activity. Is this the case, then
external implied powers are created.
The most obvious evidence of this is where internal measures provide
explicitly for the EC to act externally in the area in question. Since the dawn
of the doctrine of implied powers, the Court has treated situations in which
an internal act expressly confers powers to the Community to enter into international commitments as a special case. In the AETR case, the Court held
that Article 3 of Regulation No 543/69, which allowed explicitly for the EC
to enter into international commitments, was a factor determining that the
EC had exclusive powers by implication. The Court has repeated this in the
WTO Agreement223 and the Second OECD224 Opinions as a reason for exclusive implied powers. It appears from these cases that the situation is closer
related to pre-emption than to the prior question of existence of Community
powers. With respect to the question of existence of implied powers, the
relevant consideration is still whether the Community policy objectives pursued require that the EC acts externally – regardless of whether the EC has
adopted measures, which expressly provide for this. Notwithstanding this, if
an internal act expressly confers powers to act externally, this is a strong
factor pointing at a need for external powers to pursue the relevant objectives.
Dashwood (1998a), p. 122 asserts that “directives…which expressly
authorise the negotiation of agreements with third countries on matters incidental to the well-functioning of the internal market, but which the Community does not have power to pursue as ends in themselves” may give rise to
external powers by implication. It should be stressed, though, that an express conferment of external powers in an internal act is subject to the limits
of the Treaty objectives, just as much as other implied external powers are.
An internal measure can never empower the Community to pursue new external ends. Consequently, there are no legal reasons for treating this sitution as a special case in an analysis of the question of the source of external
powers.
If the WTO Agreement Opinion should not be read as suggested in Section 5.2.3.1, arguably the subject-matters covered by the GATS and TRIPs
Agreements require that the EC establishes an internal system of rules (i.e.
exercises internal powers) first in order to determine whether external powers to conclude these agreements exist.
223
Paragraph 95. Further examples on such regulations are given in the WTO Agreement
Opinion in paragraph 94.
224
Section V, paragraph 5.
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Finally, the field of classification, packaging and labelling of products
could be mentioned. With respect to mainly dangerous products, the EC has
regulated extensively on this. Arguably, due to the internal regulation, the
EC has acquired a parallel external competence to enter into international
commitments regarding this subject matter.225
However, future will show whether the Court will develop a distinct and
broad approach to the source of implied powers based on an abstract application of the principle of parallelism, as suggested by Dashwood. If so, this
will leave futile internal measures as a basis for external powers, and the
adoption of internal measures will be of relevance only to the question of
exclusivity.
5.2.4 Concluding Remarks
In case law and academic writing, the existence of implied external powers
still has a high degree of correlation with the question of whether Member
State action is pre-empted.
The reason for a number of theoretical discrepancies concerning the creation of external powers probably stems from the evolution of the Court’s
case law, and in particular the tangled treatment of the questions of implied
powers and pre-emption as described in Part I. The Court still in recent
cases from the outset considers whether the Community has exclusive implied powers without separately laying down the criteria for implied powers
to exist.226 Thus, no clear tools are provided for the proper separation of the
question of existence of implied powers from the question of the nature of
those powers. Possibly due to this, some authors consider that implied powers may arise in special situations (which henceforth are treated as special
cases by these authors) apparently on the ground that there is here particularly evident or strong justification for external action in order to achieve
Community objectives.227 This treatment of the doctrine of implied powers
seems to miss the essence of the concept of necessity, and its requirement of
a case-by-case examination.228
It is suggested above that the law on implied powers is the following: In
the absence of an express attribution of powers, implied external powers exist when (1) internal powers have been conferred to the EC for the purpose
of attaining a specific Treaty objective, and (2) it is necessary that the Community acts externally to achieve this objective. Hence, first, the scope of
the internal powers will have to be examined in order to see whether the EC
is competent to pursue the ends in question. A positive answer to this
question will lead to an examination of the necessity to act externally. The
need to act externally is in principle based on efficiency considerations, and
may in the specific case be established on the basis of a non-exhaustive
225
The ILO Opinion, paragraphs 22-26. Importantly, the ECJ at this place considered
whether the EC held exclusive powers. See MacLeod et al (1996), p. 49 at note 69.
226
See above on the AETR case, the Second OECD, and the WTO Agreement Opinions.
227
See above on (1) the Rhine Navigation Opinion and (2) situations where an internal
measure expressly confers external powers.
228
The presentation in MacLeod et al (1996), pp. 47 (on implied powers) and pp. 56 (on
exclusive powers) arguably connects the two questions too rigorously. This seems to lead to
some inflexibility with respect to implied powers.
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number of factors, in particular: the nature and intensity of regulation in the
Treaty provisions, and the exercise of internal powers in the relevant area,
including possible internal legislation expressly conferring powers to enter
into international commitments.
Notwithstanding the soundness of including internal measures in the
question of existence of powers, it does seem difficult to reconcile the view
that implied powers may arise from the exercise of internal powers with the
fundamental principle of conferred powers. Logically, the Community being
a creation of the sovereign Member States can only have powers flowing
from the Treaty establishing the EC. The notion of competence is constitutional. In principle, therefore, it would be contrary to the principle of conferred powers if the EC could acquire new powers by adopting internal
measures. Thus, importantly, implied external powers should be understood
as being founded on - or ”derived” from - the Treaty.229
At present, it is unclear what role, if any, internal measures play in the
question of existence of implied powers. Probably it will be a matter of time
before the Court will be asked to distinguish properly the conditions for the
existence of implied powers from the nature of these powers.230 Notwithstanding this, academic writing shows that it is sensible to take pain to discern properly the existence of powers from the nature of those powers, and
to examine them on their own premises.231
Recently, the practical importance of implied powers has been substantively reduced due to the introduction of express powers by the SEA and
TEU.232
6. The Nature of EC External Powers
6.1 Introduction
In this section, the legal nature of EC external powers will be analysed.
Having established that the EC is empowered either expressly or by implication from the EC Treaty to act in a certain field, the next step will be to determine what these powers consist of. Part I has already demonstrated the
practical political importance of the nature of powers.
229
See Tridimas and Eeckhout (1994), p. 155. The argument is put forward by the authors
in relation to the nature of powers, i.e. the question of when exclusivity arises. However, it
applies a fortiori to the question of whether Community powers exist at all.
230
The question is likely to appear in the conclusion or implementation of a mixed agreement, cf. the Hermes and Christian Dior cases.
231
Bourgeois (1995), pp. 779 concludes that the WTO Agreement opinion is a ”step back”
in relation to the existence of implied powers as defined in the Rhine Navigation Opinion.
However, the Court in the WTO Agreement Opinion considered the principle in the Rhine
Navigation Opinion only with a view to ascertain whether the EC held exclusive implied
powers. Dashwood’s dubious conclusions in Dashwood (1998a), p. 122 are probably
founded on a confusion of the two questions.
232
This trend has continued also in the Treaty of Amsterdam, see Dashwood (1998b), and
in the draft Nice Treaty, notably Articles 133 and 181A.
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The Court has distinguished between two broad categories of powers in
external relations: EC external powers can be either exclusive or nonexclusive.233
The principle of conferred powers has been mentioned above. It creates a
(theoretical) presumption that the Member States, and not the EC, have
powers unless sources of Community powers exist. The other major assumption guiding EC external powers is that EC external powers are nonexclusive.234 Though there exists no clear precedence, presumably EC powers are as a general rule non-exclusive unless special factors point to the opposite result. The Court’s case law seems in general to require reasons for
EC powers to be exclusive.235
6.2 Exclusive External Powers
6.2.1 Concept
Exclusive EC powers denote that the Member States cannot take independent action. Exclusivity is thus defined by its legal consequence, the absence
of an autonomous norm-setting power of the Member States. Exclusion of
the Member States’ norm-setting powers does not necessarily entail that
they will loose other powers, i.e. executive or judicial powers,236 cf. for example the Natural Rubber Opinion.
The basic rationale for excluding Member State powers is efficiency, but
the more specific reasons for developing a concept of exclusivity vary according to the particular type of exclusivity. Therefore, it is helpful for analytical purposes to subdivide exclusivity into different categories.
In the ILO Opinion, the Court stated that exclusivity may flow from
Treaty provisions “but it may also depend on the scope of measures which
have been adopted by the Community … and which are of such kind as to
deprive the Member States of powers they were able to exercise previously
on a transitional basis.”237
These two basic forms of exclusivity will be dealt with in turn: Exclusivity from the outset (a priori) and exclusivity as a result of the Community
exercising the powers conferred upon it (pre-emption). Since pre-emption as
a result of exercising external powers (the so-called Rhine Navigation principle) has been treated as a special case by the Court, this will be dealt with
separately.
233
ILO Opinion, paragraph 9.
Tridimas & Eeckhout (1994), p. 154, MacLeod et al. (1996), p. 64, note 143.
235
This is implicit in the Court’s reasoning in e.g. the Natural Rubber Opinion and the
WTO Agreement Opinion. AG Jacobs in the Fourth Lomé Convention case, paragraph 40:
“In the absence of any indication to the contrary, it can be accepted that the Community and
the Member States share competence in that field.”
236
Neuwahl (1996), p. 671: “If anything, it is submitted, it denotes the nature of the procedure which needs to be followed for decision-making: it has to involve a Community decision.”
237
Paragraph 9.
234
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6.2.2 A priori Exclusivity
A priori exclusivity is based directly and solely on the EC Treaty. Teleological interpretations of particular Articles as well as the whole scheme of
Community law may lead to the conclusion that EC powers are exclusive
from the outset. Exclusion of Member States norm-setting powers in certain
areas from the outset (with no need for further action) constitutes the
strongest real transfer of powers from the Member States to the Community;
irrespective of whether the EC institutions decide to act in an area or not, the
Member States can no longer act.
The reasons for this type of exclusivity are partly political. A priori exclusivity enhances the adoption of Community legislation. If the Member
States lack norm-setting powers, they will be more inclined to develop
Community rules within the EC institutions.
Legally, the Court explained in the Local Cost Standard Opinion238 that
the effective defence of common interests requires that Community powers
in the field of common commercial policy are exclusive from the outset
without any further need to take action. Concurrent Member States powers
would distort competition and the functioning of the Common Commercial
Policy and prevent the Community from carrying out its tasks. The Court
has in its case law pointed to the obligation on the Community to adopt
common policies in two areas; the Common Commercial Policy and the
area of fisheries conservation. At the end of the transitional periods laid
down in the EC Treaty and the Act of Accession the Community has assumed sole responsibility of the functioning of those policies and thus concurrent Member State powers are excluded.239
Arguably, extensive regulation within the Treaty itself may also result in
exclusive Community powers from the outset. For instance, in the field of
EC competition law it appears that there is no room for concurrent Member
States action.240 The reason for exclusive Community powers in this field
resembles the rationale underlying pre-emption (see below).
Prior to the SEA some scholars argued on the basis of the Court’s case
law that express external powers in general were exclusive a priori.241 The
fact that external powers expressly transferred to the Community subsequently have been made explicitly shared could support this idea. On the
other hand, the Court has reached the conclusion that Community powers
were exclusive a priori by interpreting the particular Treaty Article in question. At present, it seems that external powers (whether express or implied)
are shared in the absence of any indication to the contrary.242
The scope of a priori exclusivity and the scope of the relevant powerconferring Treaty Article are identical; see above on the scope of express
powers. Of the two areas in which the Court has established that the EC
238
See above Section 1.2.2.1.
With regard to Common Commercial Policy: International Fruit case and the Local
Cost Standard Opinion. Fisheries conservation: Commission v. United Kingdom and the
Kramer case. Bieber (1988), pp. 149.
240
The Second EEA Opinion, summary paragraph 6; MacLeod et al. (1996), p. 57.
241
Cremona (1982); pp. 399, Pescatore (1979), pp. 622, esp. p. 624.
242
See above Section 6.1 and below Section 6.3.3.2.
239
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holds exclusive powers a priori the scope of the Common Commercial Policy has been subject to most attention. This issue has been touched upon in
Part I and earlier in this section.243
Though the reasoning in the Local Cost Standard Opinion seemed to introduce a new and powerful tool for achieving Community objectives, today
there are only few areas in which EC powers are exclusive from the outset.
Clearly, there are drawbacks related to this type of exclusivity. If the at
times politically stagnated EC law-making structures end in dead-locks,
there will be no external policy within the EC area. Where the risk of such a
legislative vacuum is foreseeable, the effective functioning of Community
law is often better secured by more flexible mechanisms. This is particularly
so in politically sensitive areas where the Community may be burdened with
tasks out of step with the current level of integration. The current preference
for flexible legislation and shared powers makes it unlikely that exclusivity
a priori will be established in new areas. The doctrine of pre-emption offers
a less extreme transfer of powers, which in many situations is more desirable.
6.2.3 Classic Pre-emption
6.2.3.1 Concept
Exclusivity in the form of ”classic pre-emption” flows from the adoption of
internal measures by the Community. Thus, the mere conferment of powers
to the Community in the EC Treaty does not from the outset exclude Member States from taking independent actions. Member States powers will exist
concurrently, but on a transitional basis; i.e. when the Community exercises
its powers the Member States will be barred from acting in ways, which
might affect Community rules or alter their scope.244
The word ”pre-emption” originates from United States constitutional law
and has been used by academics in EC law though the Court has never itself
used the term.245 In this essay, ”pre-emption” is used to describe the situations defined above.
The reasons for adopting a doctrine of pre-emption in the Community legal system are the same as in the US. On the one hand, autonomous actions
by a Member State in fields where common rules are adopted would jeopardise the effective functioning of Community law and prevent the Community from carrying out the tasks conferred upon it. It is therefore necessary to prevent Member State actions in so far as they could interfere with
those rules. On the other hand, concurrent Member State powers prevent a
243
The literature on this subject is vast; see e.g. Eeckhout (1994); MacLeod et al. (1996),
chapter 12; Jacobs (1996), pp. 5; Kapteyn (1998), pp. 1275; Pescatore (1999) with references.
244
The Kramer case, paragraphs 35-40, see also the ILO Opinion, paragraph 9.
245
Soares (1998), pp. 132. In the AETR case, the Court stated that the Member States ”no
longer have the right” and that the Community ”alone have the right,” paragraph 17 and 18.
In the ILO Opinion, the Court held that Community rules were of such kind as to ”deprive
the Member States of an area of Competence which they were able to exercise previously
on a transitional basis”, paragraph 9. MacLeod et al. (1996), pp. 58 also refrain from using
”pre-emption” to describe these situations.
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legislative vacuum where the Community has not exercised its powers.246
This flexible type of exclusivity secures supremacy of Community law
without depriving the Member States from exercising their powers where
this does not impede the well functioning of common rules.
The rationale of pre-emption is thus similar to supremacy. The doctrine
of supremacy of Community law requires that where national rules are in
conflict with Community rules, Community law prevails.247 Internal Community measures also create ”pre-emption”. However, this pre-emption
seems to be merely a mechanism to identify situations in which supremacy
secures prevalence of Community law. Pre-emption of internal Member
States powers excludes the Member States from acting in fields occupied by
internal Community measures. Thus, the doctrine of pre-emption is probably identical to the doctrine of supremacy with respect to internal measures.248 Externally, the application of the doctrine of pre-emption is broader.
Member State powers are excluded to the extent autonomous Member
States actions might affect Community rules or alter their scope.249
The reason for giving pre-emption a broader scope in external relations is
that international law is involved. In case of conflict between an autonomous Member State action and a Community measure, Community law
takes precedence internally. However, externally the Member States will
still be bound by the international obligations undertaken.250 Thus, the doctrine of supremacy is insufficient to secure the effective functioning of
Community law externally. It is necessary also to prevent these conflicts
from occurring.251
6.2.3.2 The Scope of Pre-emption
The doctrine of pre-emption applies to the whole range of Treaty objectives,
cf. the ILO Opinion.252 Also where the Member States and the Community
hold expressly shared powers, Member State powers may be subject to preemption to the extent the exercise of Member State powers in these fields
may affect Community rules or alter their scope.253
In literature and case law “common rules”254, “measures”, and “rules”255
are used interchangeably to describe the Community rules, which may cause
246
The AETR case, paragraphs 18 and 19, The ILO Opinion, paragraph 11, the Kramer
case, paragraph 39. Neuwahl (1991), pp. 722.
247
Craig & de Búrca (1998), pp. 256; Gulmann (1995), p. 185; Chalmers (1998), pp. 236.
248
Chalmers (1998) pp. 277; Soares (1998), pp. 133; Weatherill (1994), p. 14. See on the
other hand Maunu (1995), p. 119.
249
The AETR case, paragraph 20, the WTO Agreement opinion, paragraph 96. Neuwahl
(1991), p. 722. MacLeod et al. (1996), p. 58 argue that the scope of pre-emption of normsetting powers in the external sphere is no more than the result of supremacy internally.
Temple Lang (1987), pp. 183 seems to reach the same conclusion.
250
Cf. the Vienna Convention on the Law of Treaties, Article 46. Only in exceptional cases
will the Member States not be bound by international commitments.
251
Cremona (1982), pp. 397.
252
Paragraph 10.
253
Declaration 10, attached to the TEU.
254
The AETR case, paragraph 17, The WTO Agreement Opinion, paragraph 96.
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pre-emption of Member States powers. Seemingly, the different terms do
not express a difference in the application of the principle. In general all
Community measures are included “which are of such kind as to deprive the
Member States of an area of competence”.256
Numerous authors have tried in the abstract to define the concept of preemption.257 In practice, whether Member State powers to undertake certain
international commitments are pre-empted depends on a case-by-case examination. In recent case law,258 the Court has listed three typical situations
in which internal Community actions will deprive the Member States their
individual powers to undertake international commitments. The Court considered in those cases whether the Community had exclusive implied powers, but these situations are equally applicable to express external powers,
cf. e.g. Declaration 10 attached to the TEU. It is not definitively settled
whether the Court’s listing represents an exhaustive list but the Second
OECD Opinion could be read as an indication of that.259 This section will
examine the situations where internal measures create exclusive external
Community powers.260
255
The Court in the ILO Opinion uses rules and measures interchangeably: see paragraph 9,
10 and 17. In the Second OECD Opinion, the Court uses ”common rules” and ”rules”, sections V, paragraph 3 and 5.
256
The ILO Opinion, paragraph 9. Neuwahl (1991), p. 720 describes the measures as ”rules
(which are generally called common rules).”
257
Bourgeois (1995), p. 781 regards the result of the WTO Agreement Opinion as a requirement of direct conflict between national and Community law. Hartley (1998), p. 168
holds that exclusive Community power may exist even if there will be no direct clash between Community rules and the international agreement in concern. Temple Lang (1987),
pp. 183 apparently regards the principle as having the same content as that of supremacy.
MacLeod et al. (1996), p. 58 and p. 60 seem unsure on the actual scope of this principle.
Tridimas & Eeckhout (1994), p. 165 state that the notion of inconsistency with Community
law has not been interpreted broadly. Cremona (1999), pp. 155 holds that Member States
action is excluded to the extent it jeopardises Community objectives. She has earlier stated
that concurrent Member States powers may be accepted to the extent the do not ”impede
Community objectives”, Cremona (1982), pp. 395. Emiliou (1996) p. 307 cites the Court’s
statement in the WTO Agreement Opinion and holds that the Court by this statement did not
avoid future disputes concerning the content of this principle. AG Jacobs states in his opinion on the Fourth Lomé Convention case (paragraph 49) that the exact limit of this principle
cannot be laid down in the abstract.
258
The ILO, WTO Agreement, and Second OECD Opinions.
259
In Section V, paragraph 5, the Court states that ”in those circumstances the Community
has exclusive competence to enter into international agreements,” (emphasis added).
260
Pre-emption of Member States external powers may also happen in other situations, e.g.
where the Community has introduced minimum regulation. However, where Member
States powers are not entirely excluded from the areas covered by an agreement, competence will be shared to some extent. Those situations will be considered below, Section
6.3.3.2.2. For a thorough consideration on the different types of internal measures that may
cause pre-emption of Member States powers to conclude international agreements, see
Temple Lang (1987), pp. 190.
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External matters regulated in an internal act
Where the Community explicitly in an internal measure has regulated relations with non-member countries or international organisations,261 the
Member States are excluded from acting in fields covered by these provisions.
This situation is closely related to situations of direct conflict of rules in
the internal sphere. Member States powers are excluded because Community measures occupy the area. Unilateral actions by the Member States are
no longer acceptable since such actions would distort effective implementation of Community measures and prevent the protection of common interests. The Member States’ treaty-making powers are excluded where an international agreement might affect internal provisions.
Internal measures effecting complete harmonisation – the AETR principle
Where Community rules cover an area to a large extent and are continuously adopted with a view to achieve an even greater degree of harmonisation, e.g. to implement a common policy, the Member States are excluded
from exercising their powers individually or collectively outside the framework of the Community. This type of exclusivity is now referred to as the
AETR principle.262 Pre-emption in this situation not only prevents the Member States from undermining existing common rules. Member States
autonomous norm-setting powers are excluded also if they will evidently interfere with future rules, which the Community has (clear) intention of
adopting.263
Originally, Member State powers were excluded “each time the Community…adopts provisions laying down common rules, whatever form these
may take.”264 This statement has been regarded as excluding Member State
powers within the entire area as soon as Community rules are adopted.265
However, later case law has restricted (or refined) the AETR principle. In
the ILO Opinion the Court stated that Member States powers were excluded
“if an area is covered to a large extent by Community rules with a view to
achieving an ever greater degree of harmonisation.”266 The Court in the
WTO Agreement Opinion held that Member State powers, according to this
doctrine, could only be excluded “where the Community has achieved complete harmonisation.”267 In the Second OECD Opinion it stated that Member
261
See e.g. the WTO Agreement Opinion, paragraphs 92 and 93 for internal measures regulating the right of establishment and the right to provide services with regard to companies
from non-member countries.
262
This situation may correspond to what Chalmers (1998) refers to as ”field occupation”
in the internal field, pp. 239.
263
The ILO Opinion, paragraph 25. Se also the AETR case, paragraphs 17 and 18 and the
Second OECD Opinion, section V, paragraph 5.
264
The AETR case, paragraph 17.
265
Cremona (1999), p. 153; Waelbroeck (1982), p. 568.
266
Paragraph 25 and 26.
267
Paragraph 96. This seems to be nothing more than the doctrine of supremacy. See also
Bourgeois (1995), p. 781.
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State powers were pre-empted where Community rules were “effecting
complete harmonisation.”268
The Court has by its choice of phraseology established a flexible principle, the exact scope of which depends on the particular situation at hand.
The content of the AETR principle seems to be found somewhere between
the original statement (in AETR itself) and the WTO Agreement Opinion; on
the one hand, it is (now) of importance which form the Community rules
may take while, on the other hand, a clear intention of establishing exhaustive regulation is sufficient to exclude Member State action.269 It is not required that Community rules contain provisions explicitly regulating relations with non-member countries to exclude the Member States’ treatymaking powers.
External powers expressly conferred in an internal act
Where the Community is explicitly empowered in an internal act to undertake negotiations with third countries or international organisations the
Member States are excluded from concluding international agreements in
these areas regardless of whether the Community has made use of such
powers.270
The rationale underlying pre-emption in these situations has not been
considered separately by the Court. In the AETR case, the Court concluded
that the regulation granting the EC express powers to negotiate with third
countries excluded Member States powers. Pre-emption of Member States
powers was not solely based on the explicit conferment of external powers
since the regulation also regulated the matter on the internal level.271
However, if internal measures had not occupied the field before an internal measure conferred express external powers the situation would be different. Accordingly, the Court in the WTO Agreement and the Second
OECD Opinions separates the situation where internal regulation occupies
the field from the situation where external powers are expressly conferred in
an internal act. The Court affords no explanation for this distinction.272 In
this situation, Member State powers seem to be excluded regardless of
whether the Community has laid down internal rules in the area (effecting
complete harmonisation) and whether the Community has made use of its
external powers. Arguably, therefore, the reason for excluding Member
State powers within these areas is similar to the rationale underlying exclusivity a priori; exclusion of Member State powers could be regarded as em-
268
Section V, paragraph 5. It hereby confirmed what was stated in the ILO Opinion cited
above.
269
Bieber (1988), pp. 154.
270
The WTO Agreement Opinion, paragraph 95 and the Second OECD Opinion, section V,
paragraph 5. For examples of such power-conferring measures, see the WTO Agreement
Opinion, paragraph 80.
271
The AETR case, paragraphs 28-31.
272
The WTO Agreement Opinion, paragraph 95 and the Second OECD Opinion, Section V,
paragraph 5.
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phasising the importance of unity in international negotiations and it may
enhance the adoption in common external rules.273
Case law seems to imply that exclusivity of Community powers in these
situations applies to all areas of Community competence alike and regardless of the type of internal measure.274 However, as pointed out by MacLeod
et al. (1996), the scope of exclusivity probably depends on whether the
power-conferring Treaty Articles in question expressly allow for Member
States powers. Furthermore, the EC institutions must be able to state expressly in an internal measure that external powers are shared with the
Member States.275
6.2.4 Special Pre-emption – the Rhine Navigation Principle
“Save where internal powers can only be effectively exercised at the same time as
external powers, internal competence can give rise to exclusive external competence
only if it is exercised.”276
Where it is impossible for the Community to attain a certain objective by
adoption of internal measures alone, the Community has exclusive powers
to enter into international agreements necessary for the attainment of that
objective also before internal measures have been adopted.277 The Rhine
Navigation principle is thus an exception to the general requirements of
classic pre-emption.278
In the WTO Agreement Opinion, the application of this principle was further restricted. The Court held that this principle only applies where the attainment of Community objectives is inextricably linked to the regulation of
the matter by international agreements.279
In the Rhine Navigation Opinion, participation of the Member States in
the Agreement was justified only because their participation was needed for
the amendment of older Conventions. The Court emphasised that the normsetting powers were exclusively with the Community.280 It was not explicitly
stated that Member State powers were excluded in this area, but it is presupposed.
Where it is clear that a Community objective cannot be effectively attained by internal measures alone, the requirement of exercising internal
273
Temple Lang (1987) p. 210, cf. also above for the rationale underlying a priori exclusivity. By expressly empowering the Community to undertake international negotiations it
could be argued that the Member States have committed themselves only to enter into international negotiations within the framework of the Community and have thereby precluded the complicated procedures connected to use of mixed agreement.
274
The WTO Agreement opinion, paragraph 95 and the Second OECD opinion, section V,
paragraph 5.
275
MacLeod et al. (1996), p. 60.
276
The WTO Agreement Opinion, paragraph 89, the Second OECD Opinion, section V,
paragraph 8.
277
The Rhine Navigation Opinion, paragraph 4.
278
Cremona (1999), p. 153.
279
The WTO Agreement Opinion, paragraph 86.
280
The Rhine Navigation Opinion, paragraph 7. For the reasoning of the Court, see Section
1.2.1.2 at note 40.
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powers before (implied) external powers become exclusive would produce
an unnecessary delay to the achievement of that objective. The EC therefore
has exclusive external powers before adopting internal rules.
There is some disagreement about when this type of exclusivity sets in. It
is uncertain whether Community powers become exclusive already from the
time when it is clear that Community objectives cannot be attained by internal measures alone or when external power are exercised.281 The Court in
the Rhine Navigation Opinion seemed to exclude Member State powers before the Community has exercised its external powers. The introductory
quotation to this section taken from the WTO Agreement and Second OECD
Opinions seems to support this view. However, earlier in the same two opinions the Court held “that external powers may be exercised, and thus become exclusive.”282
Considering the rationale underlying pre-emption, probably pre-emption
of Member States powers is established as a result of the exercise of external Community powers.283 The Member States retain their external powers
until the Community enters into international commitments without the participation of the Member States. It is assumed in this paper that this is the
only situation in which international agreements can pre-empt Member State
powers.284
The Court has not recognised a case of pre-emption on the basis of the
Rhine Navigation principle since it was established in 1977 (in the Rhine
Navigation Opinion).285 Recent practice expressly states that powers conferred to the Community are shared with the Member States. Furthermore,
in recent case law the Court has rejected that pure efficiency consideration
could affect the division of powers.286 This and the strict requirements in the
WTO Agreement Opinion make it difficult to imagine new situations where
exclusivity could be established on the basis of this principle.287
281
See Hartley (1998), pp. 158 for a thorough discussion on the matter. MacLeod et al.
(1996) seem to presuppose that Community competence is exclusive as soon as it is clear,
that Community objectives cannot be attained without conclusion of an international
agreement, pp. 60. Neuwahl (1991), p. 726 implies that Community powers become exclusive when the EC has concluded an international agreement.
282
The WTO Agreement Opinion, paragraph 85 (emphasis added) and likewise repeated in
the Second OECD Opinion, Section V, paragraph 4.
283
Neuwahl (1991), pp. 729; Waelbroeck (1982), p. 568 and p. 570; MacLeod et al. (1996),
p. 73. Hartley (1998), pp. 168 supports this conclusion, but bases it on the fact that only the
first of the Court’s statement in the WTO Agreement Opinion was repeated in the Second
OECD Opinion.
284
If unnecessary delay in the achievement of a Treaty objective should be effectively prevented it is required that the Community in these situations has powers to conclude the
agreement alone. For further considerations on the Community’s ability to undertake international commitments alone in areas where Member States and Community powers are
concurrent, see below Section 6.3.3.
285
The Commission in the WTO Agreement and the Second OECD Opinions claimed that
the exclusive Community powers could be based on this principle.
286
The ILO Opinion, paragraph 20 and the WTO Agreement Opinion, paragraph 107.
287
Cremona (1999), pp. 153.
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6.2.5 Legal Consequences of Exclusivity
6.2.5.1 Loss of Norm-Setting Powers
The focal legal consequence of exclusivity is the same regardless of the basis for exclusivity. Whenever the Community has exclusive powers within a
certain field, the Member States are deprived their norm-setting powers in
that field. They are thus under an obligation to abstain from entering into international commitments outside the framework of the Community.288 The
Member States cannot undertake actions in these fields without proper authorisation289 from the Community or safeguard clauses, which allow for
autonomous Member State measures.290
As case law shows, the Member States are not entirely excluded from
participating in international agreements in areas where the Community has
exclusive powers. Different practical considerations have led to acceptance
of Member States participation, regardless of whether they have no autonomous norm-setting powers, cf. for example the AETR case, the Natural
Rubber Opinion, and the ILO Opinion.291
The Member States are regarded as having certain limited powers to act
without Community acceptance after Community powers have become exclusive. Those powers can only be exercised in the interest of the Community and in close consultation with the Commission.292 This duty to protect
the interests of the Community is based on Article 10 EC.293
6.2.5.2 Restoration of Powers
The possibility for the Member States to restore their powers in areas where
the Community has exclusive powers on the basis of the doctrine of preemption has not yet been subject to considerations of the Court. Whether
restoration of Member State powers is possible probably depends on the reason for exclusivity.
Where Community powers are exclusive from the outset, the Member
States will not be able to restore their powers where they are transferred to
the Community.294 The rationale underlying exclusivity a priori precludes
restoration of Member States powers. If the Member States wish to restore
their own powers in these fields, this will only be possible by way of Treaty
amendment.
The reason for granting the Community exclusive powers on the basis of
pre-emption is to prevent unilateral actions of the Member States from undermining Community law. Once the Community has exercised its normsetting powers within a certain field, arguably, those rules can only be
288
The Kramer case, paragraphs 44/45.
The Donckerwolcke case.
290
See e.g. Reg. No 2603/69, Article 11 which allows the Member States to impose quantitative restrictions on export of oil to non-member countries. See e.g. the Centro-Com case.
291
Paragraph 37. In this case, powers were shared between the Member States and the
Community, but the same practice could be applied in situations where the Community
hold exclusive powers.
292
Neuwahl (1991), p. 720; MacLeod et al. (1996), p. 63.
293
Commission v. United Kingdom, paragraph 28.
294
Commission v. United Kingdom, paragraph 20.
289
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amended by adoption of new common rules.295 However, there are sound
reasons for avoiding legislative vacuums also where Community rules have
existed but are now repealed. The reason for excluding Member States action is no longer present where the Community has altered the scope of an
internal act. Thus, pre-empted Member State powers will probably be restored if the EC withdraw legislation in a field.
6.2.5 Concluding Remarks
The Court has established three ways in which the Community powers may
become exclusive. Recent case law has shown that, at present, the most
practical type of exclusivity is classic pre-emption. Practical considerations
of convenience cannot themselves alter the division of powers and therefore
cannot affect the exclusive nature of Community law.296 Moreover, the
preference in recent Treaties for expressly sharing powers hinders the establishment of new areas where Community powers are exclusive from the outset or where the conditions for applying the Rhine Navigation principle are
fulfilled.
Classic pre-emption requires that Member States do not adopt measures,
which may “affect or alter the scope” of Community rules. Thus, with respect to external powers the doctrine of pre-emption lies somewhere in between the narrower doctrine of supremacy and the general duty to facilitate
the achievement of the Community’s tasks, cf. Article 10. On the one hand,
pre-emption of Member State powers is based on the loyalty obligation expressed in Article 10 EC.297 However, Article 10 not only applies where EC
powers are exclusive, cf. below on shared powers. On the other hand, the
doctrines of pre-emption and supremacy are founded partly on the same
grounds. Nevertheless, the scope of pre-emption in EC external relations
needs to be broader than the doctrine of supremacy. Due to the involvement
of third countries and international law, the doctrine of pre-emption also has
as its aim the prevention of future conflicts of rules.298
6.3 Non-Exclusive External Powers
6.3.1 Introduction
The rationale for creating a system of overlapping (shared) competencies in
the EC legal system is sound. From a Community perspective, it essentially
reflects the legal and political needs of a decision-making system of non-
295
Neuwahl (1991), p. 720.
The WTO Agreement Opinion, paragraph 107.
297
The Kramer case, paragraphs 42/43; the AETR case, paragraphs 21 and 22; the ILO
Opinion, paragraph 10.
298
It has been argued that where the EC has clear intentions to initiate negotiations with
non-member countries the Member States are under a duty not to undertake international
commitments in that field. This obligation of not interfering with future initiatives of the
Community should be based on Article 10 EC. However, the evidence of such future initiatives will probably need to be quite clear in order to exclude Member States powers.
MacLeod et al. (1996), p. 74; Waelbroeck (1982), p. 570; Temple Lang (1987), pp. 189;
Bieber (1988), pp. 156.
296
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unitary actors:299 Since the EC was not established as a static legal order,
complete from the outset, shared powers are used to remedy a transitional
legislative vacuum. However, in some areas the sharing of powers are not
only transitional, e.g. within the fields of environment and development policy. The Community would weaken itself if it cut off national support by
requiring exclusivity in areas where there are political and constitutional
limits to the adoption of Community legislation. Furthermore, the EC Treaty
in general interrelates with the national legal orders, requiring e.g. Member
State implementation of EC legislation. This in part necessitates Member
State legislative powers along with the Community.
In addition to the acquis communautaire reasons for sharing powers in
order to facilitate the building of a balanced Community, from a Member
State point of view, important political reasons favour shared powers;
Member States are more willing to transfer powers to the EC if they retain
powers themselves. This is reflected in the new express powers in the SEA
and TEU and most recently in the new draft Article 133, subparagraphs 5
and 6 in the Nice Treaty.300
There are, however, also considerable disadvantages of recognising an
increasing use of shared competence. There are serious practical problems
related to the conclusion of a mixed agreement. Ratification in (at present)
15 Member States is a lengthy process.301 Furthermore, the problems of
practical co-ordination under the uncertain ”legal” requirements of the ”duty
of close co-operation” have at times been substantive.302
Due to a recent focus - in the case law and in the Treaties adopted since
the SEA - on the advantages of shared competence, areas of exclusive EC or
Member States competence have become increasingly rare, leaving shared
or concurrent competence as the general practical situation.303
Notwithstanding that the Court in recent case law has been prepared to
accept the concept of shared powers and joint action,304 legal and practical
problems are still unresolved. Despite the apparent untroubled statements by
the Court that the EC and the Member States in a number of situations share
competence to act externally, the legal and practical issues arising in connection with a sharing of powers are numerous.
This section is limited to an analysis of what we have suggested to be the
core question in relation to EC external powers, i.e. whether the Member
States or the EC have autonomous decision-making (norm-setting) powers,
299
See for the advantages of shared powers inter alia Bieber (1988), pp. 147; Weiler
(1983), pp. 35; Weatherill (1994), pp. 13.
300
A (still unofficial) version of and comment on the new Article 133 is available at the
home page of the Directorate General of Trade: http://europa.eu.int/comm/trade/faqs/rev
133_en.htm (13.12.2000).
301
Rosas (1998), p. 134 mentions the extreme example of the customs and co-operation
agreement with San Marino, which was signed in 1991, and - partly due to the enlargement,
which required ratification of all 15 Member States of a new protocol attached to the
Agreement – is still not in force.
302
The practical co-ordination within the ILO Convention and the Ozone Layer Convention
are described in Neuwahl (1996), pp. 678 and Temple Lang (1986), pp. 157.
303
Weatherill (1994), p. 21.
304
The ILO and WTO Agreement Opinions, Bangladesh case, Fourth Lomé Convention
case, India Agreement case.
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cf. Section 4.1. Whereas in the doctrine of exclusivity, the distinctive feature
is a lack of Member States norm-setting powers, the principal question in relation to areas involving non-exclusive powers is, it is suggested here, the
extent to which the Community can act autonomously; i.e. whether it has
autonomous norm-setting powers. To what extent does a sharing of powers
require the EC to have recourse to joint action in Community external relations?
The Court has settled the complementary question; i.e. whether Member
States have autonomous norm-setting powers in areas where powers are
shared. Member States cannot act within areas where the EC has exclusive
competence. In all other areas, the Member States retain an autonomous
norm-setting power,305 subject (only) to the “duty of close co-operation”306
and the general duty to facilitate the achievement of the Community’s tasks,
cf. Article 10.
6.3.2 Definitions and Scope
On the basis of the Court’s case law, it appears that non-exclusive (or
shared) powers exist whenever the EC has powers over at least some part of
a subject-matter, but does not hold exclusive competence over the whole
area in question.307 Accordingly, non-exclusive powers are defined in negative terms. Apparently, in the case law of the ECJ, non-exclusive powers are
distinguished by either a lack of existence of Community powers (i.e. an existence of exclusive Member States powers) or a lack of exclusive EC powers over the whole area in question. Thus, the international acts falling
within the scope of non-exclusive Community powers cover a variety of different types of power-division structures, which may have different legal
consequences.308
Two factors contribute to the legal uncertainties inherent in the notion of
shared powers.
Firstly, the ECJ seems to use the terms “non-exclusive,”309 “shared,”310
“joint,”311 “concurrent,”312 and “complementary”313 powers interchangeably. The Court has never ruled expressly that different types of shared
305
This was evident from the outset, cf. the AETR case, paragraph 17. See also Commission
v. United Kingdom, paragraphs 17ff, the Fourth Lomé Convention case, paragraph 27.
306
See below, Section 6.3.4.
307
The Court has never given a clear definition, and thus our definition is based on the facts
and reasoning in cases where the Court has held shared powers to exist, notably the Kramer
case, the Natural Rubber Opinion, the Nuclear Materials Ruling, the ILO Opinion, the
WTO Agreement Opinion, the Second OECD Opinion, the India Agreement case.
308
MacLeod et al. (1996), pp. 63 identify five situations.
309
E.g. the ILO Opinion, paragraph 9.
310
This is the most commonly used expression by the Court and in academic literature, see,
inter alia, the ILO Opinion, paragraph 12, the WTO Agreement Opinion, paragraph 98
(with respect to GATS), the FAO case, paragraph 40.
311
E.g. the WTO Opinion, paragraph 105 (with respect to TRIPs), the ILO Opinion, paragraph 39.
312
The Local Cost Standard Opinion (Part II of the Opinion).
313
The India Agreement case, paragraph 36.
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powers have different legal consequences.314 Nevertheless, it is obvious that
the power-division combinations resemble very different legal situations.
Some academics have attempted to classify different types of power structures under different headings.315 However, there is no general academic
consensus about the classification of different groups of power-division or
the vocabulary to be used in situations of non-exclusive powers.
Secondly, the wide use of mixed agreements in recent years has contributed to a clarification of some of the questions in relation to shared powers,
but has also led to further confusion. First of all, situations of shared powers
relate to any type of international action, whether autonomous or conventional. Secondly, the confusion stems from the fact that the concept of
“mixed agreement” may be different from the concept of “shared powers.”
Mixed agreements can be defined with reference to either normative or descriptive criteria. Schermer defines a “mixed agreement” as “any treaty to
which an international organisation, some or all of its Member States and
one or more third States are parties and for the execution of which neither
the organisation nor its Member States have full competence.”316 However,
non-legal reasons (from the point of view of Community law) may also dictate participation of the Member States in an international agreement; e.g.
the rules of an international organisation or political expediency within the
EC.317 Strictly speaking, any international agreement to which the Community and the Member States are parties is a mixed agreement. Temple Lang
uses such a descriptive definition: “International agreements are described
as “mixed” when both the European Community and some or all of its
Member States become, or are intended to become, parties.”318 Thus, the institutional practice and the ECJ’s case law on mixed agreements do not always reflect situations in which shared powers exist.
6.3.3. A Typology of Shared Powers and Their Legal Effects on EC Decision-Making Powers
This section is structured so as to serve the core subject matter, i.e. to determine which structures of overlapping norm-setting powers require that
the EC and Member States act jointly in international matters. The case law
suggests that the EC in some instances is under a duty to act together with
the Member States in external relations. This was the case for instance in the
ILO Opinion,319 which concerned partly Community exclusive competence
and partly shared competence. In other situations in which powers are
314
Neuwahl (1996), p. 669: ”[T]he Court seems to use the expression as a term of art, without explaining in detail what it exactly entails, and why there is a need to investigate the
deeper meaning of the term.”
315
See e.g. Rosas (1998) with references, esp. p. 132; Schermer (1983), pp. 23; Bieber
(1988), p. 148.
316
Schermer (1983), p. 25. This definition does not focus on the international reality, but
relies on the internal EC legal reasons for mixity. The reference to internal competence necessitates an introduction of ”false” mixed agreements (p. 27), where mixity is used only
for political and not strictly legal reasons. See also MacLeod et al. (1996), p. 143.
317
Neuwahl (1991), p. 717.
318
Temple Lang (1986), p. 157
319
Paragraph 12.
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shared, the EC is not required to act jointly with the Member States but may
exercise its non-exclusive powers autonomously, e.g. the India Agreement
case. This section will attempt to examine what legal considerations distinguish these situations. The ECJ has not ruled on this, and there is scarcely
academic writing on the subject.320
It is not possible in the abstract to determine the exact scope of shared
powers and their legal consequences. The legal effects depend on the situation at hand. Thus, the issue of this analysis will be an (envisaged) international act, whether an international agreement or an autonomous measure.
Depending on both the scope of the international action in question and the
power-conferring Treaty Articles on which it is based, the following 4 types
of powers can be distinguished:
1) In some areas, the EC is exclusively competent to act; e.g. within the
traditional scope of Article 133).
2) In other areas, the Member States are exclusively competent to act;
e.g. with respect to defence policy, some immigration matters etc.
3) In practice, many international acts are wholly covered by the Community’s potential norm-setting powers, but since these powers have
not been fully exercised, the Member States share competence with
the EC until the conditions of pre-emption have been satisfied. This
was the case in the WTO Agreement Opinion, e.g. in the important
areas of transport, services, establishment, and intellectual property
harmonisation. EC external powers in these situations are characterised by an absence of present exclusivity. However, the powers carry
a potential for some pre-emption within the relevant subject matter.
4) Finally, some international agreements or autonomous external activities are construed in such a way that, according to EC law on exclusivity, pre-emption is not legally possible. This category of shared
powers is found primarily within some of the new express powers introduced by the SEA and TEU (most notably development cooperation where powers expressly are complementary, cf. Article
181, but possibly also cultural co-operation, cf. Article 151(3). This
situation of a permanent sharing of powers where pre-emption is not
legally possible also embraces another international area in which
separate norm-setting powers exist for the EC and the Member States
over exactly the same matter. The classic example is trade marks,
where both the EC and the Member States have powers individually
to develop rules relating to trade marks.321
With these four types of possible norm-setting powers as bases (all of which
may occur in different fields of Community activity), an international act
may, depending on its scope, combine various categories of powers with the
result that a sharing of powers exist between the EC and the Member States.
320
The literature on mixed agreements is helpful. See in general David O’Keeffe and Henry
G. Schermer (ed.) (1983); Rosas (1998), pp. 128-133; Tridimas and Eeckhout (1994), pp.
173; MacLeod et al (1996), pp. 63 and pp. 142; Neuwahl (1991).
321
See on this MacLeod et al. (1996), p. 66 with note 157.
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When examining these combinations, a first distinction can be made between international acts over which the EC does not posses powers as regards the whole subject-matter in question and international acts in which
the EC does possess powers over the whole external act in question, but
these powers are – at least partly – non-exclusive.
6.3.3.1 Compartments of Exclusive Competencies - A ”False” Sharing of
Powers
An international activity may contain subject-matters, which are within both
EC and Member States exclusive competence. Within these situations, an
analytical distinction has been made between ”horizontal” and ”vertical”
distribution of exclusive powers.322 An international agreement may be concluded where the EC has exclusive powers over some part, e.g. some questions of external trade in goods, cf. Article 133, and the Member States have
exclusive powers over some other part of the agreement, e.g. defence policy
instruments. This situation resembles a “horizontal” sharing of powers because the power-division is sectorial. MacLeod et al. (1996), p. 65 suggest
that there are no truly “shared” powers, since powers are exclusive on each
side.323 In principle, therefore, it would be possible to separate the agreement into two agreements, which both parties would be able to conclude individually. Exclusive compartments of competencies also appear as a ”vertical” distribution of powers, e.g. where the whole subject-matter, e.g. fisheries conservation, fall within EC exclusive competence, but some of the instruments for enforcement, e.g. the surveying of coastal areas, are within
Member States competence.324
It seems that the distinction between horizontal and vertical distribution
of exclusive powers has no legal relevance, and it is difficult to see what legal clarification it would bring.325 Furthermore, it is difficult to categorise
external actions in practice as involving either vertical or horizontal shared
powers. The determinant factor is that Member States have exclusive powers over some part of the external act.
The lack of Community competence cannot be ”repaired” by the doctrine
of pre-emption, and therefore Member State participation will always be required in an international act involving this power-division. There is a lack
of existence of EC powers.326 In a situation in which an (envisaged) external
322
See Rosas (1998), p. 130 and Neuwahl (1996), pp. 674.
Likewise, the general assumption that powers are shared if nothing points to exclusivity
(see above, Section 6.1.) does not apply to this situation. However, the ECJ has held that
powers are shared in this situation, cf. the Nuclear Materials Ruling.
324
A vertical distribution of powers seemed to exist in the Nuclear Materials Ruling where
the EC was competent with respect to some parts relating to the handling nuclear materials
whereas the Member States were exclusively competent to adopt rules on e.g. extradition,
see above, Section 1.2.3. Another possible example is the financing system in the Natural
Rubber Opinion.
325
Neuwahl (1996), p. 674 contends that this distinction is difficult to make in practice.
Both Rosas and Neuwahl find no distinct legal consequences, which could justify the distinction.
326
Save, where, of course, the ”essential objective” of the act is within the EC exclusive
powers, and Member States powers are only of an ”ancillary” nature. See above, Section
5.1.2.1.
323
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action involves both EC and Member States exclusive powers, obviously the
consequence will be a legal duty to act jointly. In case either the EC or one
of the Member States acts separately, it would be contrary to the powers it
holds, and the act would be void (EC acts would be ultra vires) under EC
law.327
This type of power-division has been dubbed “co-existent competences.”328
6.3.3.2 EC Has Powers Covering the Whole Subject Matter
The second situation relates to external acts in which the EC has potential
competence over the whole field.329 In cases where the EC does not hold
exclusive powers over the whole field, the Member States retain some powers over the same matter.
In these situations of shared powers, it is fair to assume that there is a
presumption that EC powers are non-exclusive, and that EC exclusivity requires that certain conditions are met.330 Presumably, it is also the general
rule that pre-emption to some extent is possible according to the powerconferring Treaty provisions, unless specific factors point to another result.
In order for pre-emption to be legally impossible, some indications in the
Treaty have to support this finding, cf. e.g. Articles 181 (“without prejudice
to Member States” competence) and 151(2) (“supporting and supplementing
their action”).
It is with respect to international acts where the EC has powers over the
whole subject-matter, but non-exclusive powers over some part, that the
question of the scope of EC autonomous norm-setting powers is still unresolved. In a line of cases, handed down in the 90’s, the facts were present,
but the procedures prevented the question from being solved. In, for example, the WTO Agreement and the Second OECD Opinions, the Council had
already decided that the agreements should be mixed, and therefore the applicants argued that Community powers were exclusive of Member States
action.
Two cases provide the only precedence to date. In the ILO Opinion, the
Court held that the sharing of powers ”required” joint action.331 The sharing
of powers in this case concerned the ”social provisions” of the EC Treaty
according to which only adoption of minimum requirements is possible. The
India Agreement case concerned a development co-operation agreement. In
327
Neuwahl (1996), p. 672.
Rosas (1998), pp. 130.
329
If the Community is exclusively competent over the whole field, there is no sharing of
norm-setting powers. In some international agreements, Member State participation is still
necessary due to the rules of the international agreement in question or the rules of an international organisation (e.g. the UN organisations ILO and FAO, where the EC cannot become a member). In such situations, the need for Member State participation is not due to
the internal EC power-division but to international law. In the ILO Opinion, paragraph 37,
the ECJ held that in such cases, the Member States must act as media for the Community.
330
See above, Section 6.1.
331
Paragraph 12. Arguably, the Court found a requirement of joint action (also) because the
rules of ILO did not allow for EC participation. This question is, however, dealt with separately at paragraph 37.
328
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this case, the Court held that the powers conferred to the Community by Article 181 in the Treaty would in effect be ”nugatory” if the EC could not
conclude international agreements without Member States participation. On
their face, the two cases apparently point in opposite directions, and the
Court’s broad notion of “shared powers” provides no answer. The reason for
the different outcomes may be explained by the different nature of the international agreements in question.
6.3.3.2.1 The Source of EC Powers - Implied or Express External Powers
One reason for allowing unilateral EC action in the India Agreement case
while requiring joint action in the ILO Opinion could be the different legal
bases for external Community competence. The Co-operation Agreement
with India was based on an express Treaty provision, Article 130 y [now
181], whereas the ILO Convention no. 170 was based partly on the doctrine
of implied powers. If this was the crucial issue for the Court, the scope of
autonomous EC action when powers are shared should be found in the
source of powers. According to this view, external action based on the doctrine of implied powers requires joint action unless internal measures have
pre-empted the subject-matter in question. On the contrary, express external
powers confer an autonomous decision-making power on the EC in order
for the express powers not to become “nugatory” as independent legal
bases.
Considering the development of the doctrine of implied external powers,
this distinction is, however, probably not determinant. First, implied powers
may be both exclusive and shared in the same way as express powers.332
Hitherto, the Court has not distinguished the legal consequences depending
on whether the powers were express or implied.333 Moreover, this distinction does not consider the relevance of the nature of the international act.
Finally, the draft Article 133 apparently allows the EC to act to some extent
autonomously within the fields of services and intellectual property,
whereas subparagraph 6 explicitly requires the EC to act together with the
Member States in the fields of inter alia trade in cultural services. In conclusion, neither the present case law, nor the (future) EC Treaty itself supports a distinction based on the source of powers, i.e. whether powers are
express or implied.
6.3.3.2.2 A Possibility of Pre-emption
The more likely explanation of the different outcome of the two cases concerns the nature of the division of powers in the two agreements. Interna332
At an earlier stage of the development of EC external powers, some academics thought
the distinction express/implied powers to be of relevance to the question of whether EC
possessed a priori exclusive competence. Express external powers meant a priori exclusivity. The SEA, the TEU, the ToA and the new draft Article 133 in the Nice Treaty have explicitly rejected this view. See Section 6.2.2 at note 241.
333
Compare: the ILO, WTO, and Second OECD Opinions (implied powers) with the India
Agreement, and the Fourth Lomé Convention cases (express powers). Furthermore, in Declaration 10, attached to the TEU, the Member States acknowledge the application of the
AETR-principle, which has been developed in the area of implied external powers, in relation to Articles conferring express external powers.
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tional activities over which the EC holds non-exclusive powers over the
whole field can be subdivided into two categories depending on their “capability” to pre-empt Member States powers. As mentioned above, this possibility depends partly on the power-conferring Treaty provisions and partly
on the international act in question.
Pre-emption not possible – parallel competence
As a result of the power-conferring rules (e.g. Article 181)334 and of the type
of international act in question (e.g. Article 25 in the Co-operation Agreement with India explicitly stated that the Agreement would not limit Member States powers),335 in some circumstances no pre-emption (exclusivity)
can be envisaged.
In situations in which the international act in question in no way affects
Member State powers, a rationale for a legal duty to act jointly seems difficult to establish. In the India Agreement case, the Court in paragraphs 46-48
recalled that the Agreement was only a framework agreement, and that Article 25 in the Agreement stated that ”neither the Agreement nor any action
taken thereunder is in any way to affect the powers of the Member States.”
Therefore, the EC could conclude the Agreement alone. Accordingly, it
seems rather uncontroversial to establish that the EC may act alone if these
conditions are met. Rosas calls this a situation of “parallel” competence.336
Pre-emption possible
In areas where the EC is competent, Member State powers may be only of a
transitional nature because the EC still has not adopted internal rules in the
area. This was the situation in the early cases brought before the Court in the
70’s, e.g. the AETR and Kramer cases. Furthermore, this seems to be the
situation in the WTO Agreement Opinion with respect to the GATS and
TRIPs Agreements and in the Second OECD Opinion regarding establishment. As soon as the conditions for pre-emption are satisfied, the EC will
have exclusive powers over the whole area covered by the external act. The
social provisions in ILO Convention No. 170 also fall within this category
of competence. Admittedly, the ”social provisions” of the EC Treaty only
allow for minimum regulations, cf. Title XI, Chapter 1, and the Court expressly mentioned this in the ILO Opinion.337 However, though Member
States retain their norm-setting powers to develop more protective measures
within the area covered by Title XI, EC activities still to some extent preempt Member States action. Though there can be no complete pre-emption,
there is a possibility that at least some of the areas of shared powers would
be pre-empted, either as the result of concluding the Convention or as a result of the decisions taken subsequently within the framework of the International Labour Organisation.338 Areas in which pre-emption is possible
334
The India Agreement, Bangladesh, and Fourth Lomé Convention cases.
Mentioned in The India Agreement case, paragraph 11.
336
Rosas (1998), p. 129. The expression is appropriate in the sense that ”parallelism” implies that things move alongside each other without ever meeting.
337
Paragraph 15.
338
See Part V of the ILO Opinion.
335
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cover most (or all) of the core Community activities such as services, establishment, some parts of intellectual property rights, transport, and agriculture (apart from fisheries conservation, cf. Commission vs. United Kingdom).
Tridimas and Eeckhout in 1994 claimed that the WTO Agreement could
have been concluded by the EC alone even though the whole agreement was
not covered by exclusive EC competence.339 They argued that the fields
covered by the WTO Agreement did not require co-operation in the same
way as did, for example development co-operation, thus relying on the “old”
efficiency considerations apparent in the case law of the 70’s (see above,
Section 1). The Court, in 1996, partly rejected this assertion, and decided
the opposite, namely that the EC could act individually within the sphere of
development policy.340 As Part I has shown, recent case law has rejected the
claim that efficiency could alter the division of competence.341 Instead, the
(new) legal principles relating to shared powers must pay attention not to
violate the power-divisions that the Treaty founders have favoured, and thus
have recourse also to Member States interests.
This paper suggests that the extent to which the EC has a duty to act together with the Member States in international relations or, alternatively,
has an autonomous norm-setting power depends on the nature of powers involved. The distinguishing factor is an international act’s capability of preempting Member States powers. If an international agreement, together with
the relevant power-conferring articles in the EC Treaty, allows the Member
States to retain their powers in the area, the EC must be allowed to act individually.342
This explains the different outcomes of the ILO Opinion and the India
Agreement case. In the ILO Opinion some pre-emption was a possibility
even within the social provisions if (theoretically) the EC became a member
to the Convention alone, whereas there was no such risk in the India Agreement case. If this is accepted, the WTO Agreement and Second OECD
Opinions should be read as implying a duty of joint action on the EC.
The solution here suggested necessitates a subdivision within the concept
of “non-exclusive” powers, viz. between pre-emptive and non-pre-emptive
international acts. If, for example, conclusion of an international agreement
involves a potential for pre-emption (either in the agreement or as a result of
the decisions taken under it) of Member States powers, the EC has a duty to
act together with the Member States. Conversely, if an international agreement is within the powers of the EC and concerns matters to which there is
no risk of Member States pre-emption, then the EC may conclude the
agreement alone. This assessment requires a case-by-case examination
where both the envisaged international act and the power-conferring Articles are relevant.
339
Tridimas and Eeckhout (1994), pp. 172-177. Rosas (1998), p. 130, likewise suggests that
there was so-called facultative mixity with respect to the WTO Agreement.
340
The India Agreement case.
341
The ILO and WTO Agreement Opinions, see above Section 2.1.1 and 2.1.2.
342
AG Pergola in the India Agreement case could be read as assuming such a distinction.
See above, note 131.
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This subdivision of shared powers pays attention to the primary concerns
of the Member States and their reason for requiring that international
agreements should be mixed. Member States want to avoid that an international agreement “ushers in exclusivity by the back door.”343 With this approach, “pure” Community agreements cannot pre-empt Member States
powers in new areas.344 If pre-emption is a possibility, then the agreement
should be concluded as mixed. Pre-emption (internal and external) in EC
law can only take place through the adoption of internal measures, save
where the Rhine Navigation principle applies, cf. above.345 Thus, the approach here suggested may be regarded as an exception to the principle of
parallelism. As opposed to internal Community measures, external acts cannot pre-empt. Moreover, this reasoning concords with the recent developments in EC external relations and the ”new” picture of exclusivity and
shared powers. Tridimas and Eeckhout find it problematic that agreements
are concluded as mixed. They argue that this practice in effect “substitute
supranational decision-making with intergovernmental decision-making, in
some cases even substitute qualified majority voting with unanimity.”346
This is correct.347 However, recent case law and EC institutional practice
have taken into account other considerations in deciding whether the Member States should participate in international agreements. The need for
consensus (unanimity) as a condition for pre-empting Member States
powers by way of international agreements apparently also finds some
support in the new draft Article 133. According to the draft Article 133 (5),
the EC may conclude international agreements only by unanimity if internal
decision-making procedures require this, or if the agreement involves areas
in which there have not yet been pre-emption. Thus, in effect there has been
created a Member State veto against pre-emption through the conclusion of
international agreements. Likewise, with respect to trade in cultural services
etc., the new draft Article 133 explicitly requires the EC to have recourse to
mixed agreements. Hence, it is secured that trade policy does not pre-empt
343
Tridimas and Eeckhout (1994) p. 174. The authors at this place argued that individual
Community action would not bring in exclusivity by the back door, since the areas in question were not a priori exclusive. However, this argument fails to appreciate that it is exactly
where there is a risk (or possibility) of gradual pre-emption over time that the Member
States have been concerned with preserving their powers. Concluding international agreements where the Community already possesses (a priori) exclusive powers does not create
new exclusivity.
344
This is also in accordance with the practical observations made by Neuwahl (1991), p.
729: “The Community is used to coming into action on the international plane without the
Member States only after a transfer of power is agreed on the internal plane.” Admittedly,
Neuwahl asserts that (theoretically) pure Community agreements can pre-empt Member
States action.
345
The special situation in the Rhine Navigation Opinion and its scope is considered above,
Section 6.2.4. In these situations, exclusivity is created also when the Community alone exercises external powers.
346
Tridimas and Eeckhout (1994), p. 174.
347
Neuwahl (1991), p. 723: “If reasons of efficiency alone counted, legislative norms
would always be decided either by the Community institutions or by those of the Member
States, and never by both at the same time.”
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Member States competence in other areas such as culture. Thus, the Member States in Nice favoured an approach similar to the one suggested here.
6.3.4 Other Legal Effects of Shared Powers
All the instances considered above have been dubbed situations of “shared
powers” by the Court. However, with respect to the core question of distribution of norm-setting powers, they share only one common procedural feature: The “duty of close co-operation” applies to all instances of shared
powers in international agreements, regardless of the type of overlapping
competence.348 The duty of close co-operation has so far been held to apply
only with respect to international agreements, but it is likely that a similar
duty applies to autonomous measures, e.g. the introduction of an economic
embargo for foreign policy reasons. The obligation is based on “the requirement of unity in the international representation of the Community.”349
This duty adds an extra layer to the decision-making procedures of the
EC and Member States respectively. It requires internal co-ordination in all
the stages of the life of an international agreement (activity), i.e. according
to the Court, the negotiations, conclusion, and implementation. However,
according to most commentators, the duty only requires ”best endeavours”
to reach a common position.350 There is no obligation to proceed by common action if agreement cannot be reached. This holds true at least with respect to international acts over which both the EC and the Member States
hold exclusive competence. In areas where the Member States have exclusive competence, they cannot be under a legal obligation to proceed by
common action within the Community framework.
The duty has, according to the Court, legal effects, which go beyond the
distribution of norm-setting powers, and these will not be considered here.
MacLeod et al. (1996), pp. 145 consider the practical and legal consequences in these stages of the life of mixed agreements.
Numerous other legal questions flowing from the use of mixed agreements and combinations of shared powers are still to be answered. Recently,
the ECJ has assumed jurisdiction over the whole area of “true” mixed
agreements in the sense discussed in Section 6.3.2.351 It is still uncertain
whether provisions in areas where powers are shared can produce direct effect.352 The ECJ has held that in situations involving shared powers no express division of competencies is necessary.353 This has raised concerns
348
The Nuclear Material Ruling, the ILO Opinion, the WTO Agreement Opinion.
The WTO Agreement Opinion, paragraph 108. Thus, its rationale shows that the duty of
close co-operation has a close relationship with the obligations on the Member States flowing from Articles 10 EC and 3 TEU.
350
MacLeod et al. (1996), p. 149. See also Heliskoski (1998), pp. 273.
351
The Hermes and Christian Dior cases.
352
This is the subject-matter of Case C-89/99 v.o.f. Schieving-Nijstad and others vs. R.
Groenveld (not yet decided). The provision in question is Article 50 of the TRIPs Agreement. Though the outcome will probably be that the Article does not have direct effect, the
reasoning may give some indication of whether mixed agreements can pre-empt Member
States action.
353
The Nuclear Materials Ruling. The EC and Member States sometimes attach a ”declaration of competence” to a mixed agreement, see Temple Lang (1986), pp. 157 for an account
of the case of the Ozone Layer Convention. See also MacLeod et al. (1996), p. 160.
349
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among international actors with respect to international liability.354 It is still
uncertain to what extent international law accepts the Community notion of
shared powers.
7. Conclusion
Two (competing) fundamental principles permeate this account of the law
on EC external powers. The principle of conferred powers constitutes the
overarching principle of the law on EC competence. The principle did initially cast legitimate doubt on the whole construction of the principle of parallelism. However, due to an innovative legal reasoning by the Court, the
idea of parallelism survived, and substantive restrictions on EC competence
have sometimes been hard to identify. The innovative nature of the Court’s
reasoning is founded on a widely stretched effet utile principle. Effet utile
has been used in all areas of EC law as an explanatory tool to create effective instruments for the achievement of, originally, the Common Market.
Along with the well-known doctrines of direct effect and supremacy came
the three fundamental notions in EC external relations law, namely implied
powers, pre-emption, and a priori exclusivity. These doctrines remain key
features of EC external powers.
However, recently the Court has been willing to attach substantive requirements to the principle of conferred powers, a principle which some still
consider merely an irritating obstacle to integration. Cases have been decided on the ground that no Community competence exists. During the 90’s
the effet utile principle was weighed against the principle of conferred powers, and indeed at times had to give room for Member States competence
even though the results seemed inconvenient for the effective functioning of
the EC. Thus, the Court has been willing to reject the effet utile of the
Community system with reference solely to a lack of exclusive competence.355 From an historical perspective, a reasoning, which turns upside
down the very foundations of exclusivity, i.e. efficiency.
Parallelism between internal and external activities has been the point of
convergence since the first considerations on EC external relations. The
need for parallel external powers is now accepted both politically and legally.
The most recent example of the Member States recognising the principle
of parallelism is the new draft Article 133 which is to be included in the
Nice Treaty. The whole idea behind the amendments is founded on the principle of parallelism and the legal principles on EC external powers. The
Draft Article 133, subparagraph 5, includes in its scope trade in services and
354
The WTO Agreement is an example. The Agreement allows for cross-retaliation measures. This raises questions about whether WTO Members can use these measures against
the Community in case of a Member State’s breach of its WTO obligations and vice versa.
AG Jacobs in the Fourth Lomé Convention case at paragraph 69 suggests joint liability under mixed agreements. See also MacLeod et al. (1996), p. 158.
355
The ILO Opinion, paragraph 20, the WTO Agreement Opinion, paragraph 107.
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commercial aspects of intellectual property. Thus, the Member States have
finally been convinced that a ”contemporary” commercial policy should include these areas as well. However, the external decision-making procedures should correspond with the internal, and according to subparagraph 6
an international agreement may not include “provisions which would go beyond the Community’s internal powers.” Thus, in general the external decision-making procedures and the scope of competence correspond with the
internal rules and powers.
The sources of external Community powers have grown to cover “ever
wider fields”356 as a result of both teleological interpretations of the existing
powers and Treaty amendments. Originally, the EC Treaty contained only
few express external powers, most notably Article 113 [now 133]. However,
in the Local Cost Standard and the Natural Rubber Opinions, the Court interpreted this Article in a dynamic and teleological way to include also ancillary matters where the “essential objective” related to commercial policy.
EC commercial policy was equated to that of a nation state. Subsequently,
the Court seemed to apply a conservative, historical judicial methodology in
the interpretation of Article 133. The Article did not automatically extend
beyond the traditional notion of commercial policy, and new trends in international trade were in effect included only to the extent that they were “not
unlike trade in goods”.357 The SEA and TEU introduced a range of new express powers in new areas of Community competence. Around the same
time as the interpretation of Article 133 was narrowly construed, however,
the Court reiterated the doctrine of the “essential objective” with respect to
development policy, and included under Article 181 a range of ancillary
matters not directly related to this policy area. This apparent paradox is explicable, we suggest, when considering the parallel development of the notions of exclusivity and shared powers.
The Court’s creation of a wide doctrine of implied external powers in the
AETR case put an end to a long dispute between the Community institutions.
It constituted an important step in the constitutionalisation of the EC legal
order. However, the doctrine of implied powers has itself received little attention in the case law. Since the ILO Opinion, existence of implied powers
has been intertwined with the exclusive nature of implied powers. Nevertheless, implied powers are now well established in the case law and the above
section on implied powers suggests allowing for a wide application of this
doctrine. The underlying rationale of implied powers is sound and a teleological approach to the existence of Community powers is acceptable when
considered in connection with the recent mutations in the law of the nature
of external powers.
How controversial the attribution of powers to the EC really is partly depends on the nature of the transferred powers. Exclusive powers constitute
the most real and definite transfer of Member States competence. Nevertheless, from the outset (i.e. the 70’s), the Court seemed unmoved by the controversy of establishing exclusive powers, but regarded the notion as an efficient means of achieving Community objectives.
356
357
The First EEA Opinion, paragraph 21.
The WTO Agreement Opinion, paragraph 44. See also the Second OECD Opinion.
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The initial doctrines of a priori exclusivity and pre-emption possess a
potential for far-reaching absorption of Member State external powers. The
political response to these doctrines was therefore unequivocal; the Member
States favour a transfer of powers to the Community that allows for concurrent retention of national powers, and are prepared to accept precedence of
Community powers only where a conflict of rules is likely to happen.
The Court apparently respected the will of the Member States to develop
a more nuanced view on EC powers. The a priori exclusive Article 113
[now 133] has recently been narrowly construed by the ECJ. Unless the
Court was to overrule its early statements on Article 133, this was the only
way to leave more room for Member States external action. The new narrow
interpretation, however, raised legitimate concerns that the EC did not have
a “real” nation state common commercial policy.358 The Draft Nice Treaty
now seems to have solved this problem by introducing an express parallelism between internal and external powers.359
Also the scope of the doctrine of pre-emption has recently been revisited.
The Member States in Declaration 10, attached to the TEU, explicitly recognised the principle of pre-emption also with respect to some of the new
express powers. However, at the same time the Court in a line of cases in effect limited the scope of pre-emption of Member States powers, thereby further circumscribing the situations in which Member States loose their powers.
Initially, the Court’s handling of situations of shared powers in the 70’s
provided only a rough outline of the law in this area. In the Kramer case, the
Natural Rubber Opinion, and the Nuclear Materials Ruling the Court seemingly accepted a sharing of powers when necessary either to avoid a legislative vacuum in a transitional period or because of exclusive Member States
competence. Yet, the Court seemed to take a sceptical view on the use of
joint participation in international agreements.360 In the SEA and TEU the
Member States expressed a preference for shared powers in all the new external Community competencies. Also the new approach to harmonisation
in internal market matters created a legislative flexibility, which allowed
autonomous Member States action. Furthermore, a new multi-faceted and
multi-pillar approach to international agreements called for Member States
participation in an increasing number of external activities. It seemed conferring competence upon the EC did not frighten the Member States as long
as they themselves retained concurrent powers.
The Court responded positively to this. In all recent cases where the EC
was competent, the Court has concluded that powers were shared. In addition, the use of mixed agreements has been accepted in principle. Moreover,
the Court accepts that both the EC and the Member States may also act individually in some situations of ”complementary” powers. It seems that the
EC actors have found a compromise in the concept of shared powers, which
satisfies the external needs of both the EC and the Member States. This in358
Bourgeois (1995), p. 779.
The Amsterdam Treaty version of Article 133, subparagraph 5, did not solve the problem in a satisfactory manner, see: Dashwood (1998b), p. 1020.
360
The Rhine Navigation Opinion.
359
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deed explains the Court’s teleological interpretation in the India Agreement
case in the field of development policy at a time where the ECJ rejected an
expansive application of the Common Commercial Policy. The law on
shared powers should pay attention to this compromise and its express articulations in recent Treaty amendments. Accordingly, this essay suggests
that the autonomous external norm-setting powers of the EC cannot prejudge the allocation of competence between the EC and the Member States.
Thus, the legal right for the EC to enter into international commitments
without the Member States depends on whether the allocation of powers
remains unaffected.
At present, EC law on shared powers and their legal consequences on international agreements is the least developed of the areas in concern. The
extensive use of agreements involving shared powers gives rise to new legal
problems.361
Admittedly, the emergent picture is complex. “Variable geometry”
within the EC, flexible internal legislation, and multi-pillar and multifaceted international agreements contribute to a system of overlapping and
differentiated competences, allowing for an indefinite number of possible
combinations of power-division. Now, the principles of conferred powers
and subsidiarity are part of the development of EC external relations law. It
is thus not a system, which has as its sole aim the effective functioning of an
ever closer integrating Community. The complexity does, however (also
from a Community perspective) provide a sound picture, which reflects
much closer the present idea of what the Community’s tasks should be.362
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Table of Cases: Numerical
Cases
Case 26/62 Van Gend en Loos v. Nederlandse Administratie der Belastingen [1963] ECR 1.
Case 6/64 Costa v. ENEL [1964] ECR 585.
Cases 56 and 58/64 Etablissements Consten SA and Grundig-Verkaufs
GmbH v. Commission [1966] ECR 299.
Case 24/67 Parke, Davis v. Probel [1968] ECR 55.
Cases 2 & 3/69 Sociaal Fonds voor de Diamantarbeiders vs. SA Ch.
Brachfeld and Sons et al. [1969] ECR 211 (Diamantarbeiters).
Case 22/70 Commission vs. Council [1971] ECR 263 (AETR).
Joined Cases 21-24/72 International Fruit Company v. Produktschap voor
groenten en fruit [1972] ECR 1219 (International Fruit).
Case 8/73 Hauptzollamt Bremerhaven vs. Massey-Ferguson [1973] ECR
897 (Massey-Ferguson).
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Case 181/73 Haegeman vs. Belgium [1974] ECR 449 (Haegeman).
Case 15/74 Centrafarm BV vs. Sterling Drug Inc. [1974] ECR 1147.
Case 8/74 Procureur du Roi vs. Dassonville [1974] ECR 837 (Dassonville).
Joined Cases 3,4 and 6/76 Kramer, Cornelius, and others [1976] ECR 1279
(Kramer).
Case 41/76 Donckerwolcke et al. vs. Procureur de la République et al.
[1996] ECR 1921 (Donckerwolcke).
Case 120/78 Rewe-Zentrale AG vs. Bundesmonopolverwaltung für
Branntwein (Cassis de Dijon) [1979] ECR 649.
Case 804/79 Commission vs. United Kingdom and Northern Ireland [1981]
ECR 1045 (Commission vs. United Kingdom).
Case 187/80 Merck vs. Stephar [1981] ECR 2063.
C-104/81 Hauptzollamt Mainz vs. Kupferberg [1982] ECR 3641
(Kupferberg).
Cases 281, 283-285, 287/85, Germany vs. Commission [1987] ECR 3203
(Immigration case).
Case 45/86, Commission vs. Council, [1987] ECR 1493 (First GSP case).
Case 62/88, Greece vs. Council [1990] ECR I-1527 (Chernobyl case).
C-106/89 Marleasing SA vs. La Comercial Internacionale de Alimentacion
SA [1990] ECR I-4135.
C-300/89 Council vs. Commission [1991] ECR I-2867 (Titanium Dioxide).
C-6 and C-9/90 Francovich & Bonafaci vs. Italy [1991] ECR I-5357.
C-155/91 Council vs. Commission [1993] ECR I-939 (Waste Directive).
Joined Cases C-181 and 248/91 European Parliament vs. Council and Commission [1993] ECR I-3685 (Bangladesh).
C-267 and C-268/91 Keck & Mithouard [1993] ECR I-6097.
C-316/91 European Parliament vs. Council [1994] ECR I-625 (Fourth Lomé
Convention).
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C-327/91 France vs. Commission [1994] ECR I-3641 (France vs. Commission).
C-392/93 R. vs. HM Treasury, ex parte British Telecommunication plc
[1996] ECR I-1631.
C-25/94 Commission vs. Council (OJ 1994, C 90/6) [1996] ECR I-1469
(FAO).
Joint Cases C-178, 179, 188, 189 and 190/94 Dillenkofer et al. vs. Germany
[1996] ECR I-4845.
C-268/94 Portuguese Republic vs. Council [1996] ECR I-6177; (India
Agreement).
C-124/95 The Queen ex parte Centro-Com Srl v. HM Treasury and Bank of
England [1997] ECR I-0081 (Centro-Com).
C-53/96 Hermés International vs. FHT Marketing Choice BV [1998] ECR I3603 (Hermés).
C-300/98 Parfums Christian Dior SA vs. Tuk Consultancy BV, decided
14.12.2000 (not yet reported)(Christian Dior).
C-376/98 Germany vs. European Parliament, decided 05.10.2000 (not yet
reported) (Tobacco Directive).
C-89/99 v.o.f. Schieving-Nijstad and others vs. R. Groeneveld (not yet decided).
Opinions
Opinion 1/75 (Re OECD Understanding) [1975] ECR 1355 (Local Cost
Standard).
Opinion 1/76 (Re Rhine Navigation Agreement) [1977] ECR 741 (Rhine
Navigation).
Opinion 1/78 (Re Natural Rubber Agreement) [1979] ECR 2871 (Natural
Rubber).
Opinion 1/91 (Re First EEA Agreement) [1991] ECR I-6079 (First EEA).
Opinion 2/91 (Re ILO Convention) [1993] ECR I-1061 (ILO).
Opinion 1/92 (Re Second EEA Agreement) [1992] ECR I-2821 (Second
EEA).
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Opinion 2/92 (Re OECD National Treatment Instrument) [1995] ECR I-521
(Second OECD).
Opinion 1/94 (Re WTO Agreement) [1994] ECR I-5267 (WTO Agreement).
Opinion 2/94 (Re Accession of the EC to the European Convention on Human Rights) [1996] ECR I-1759 (ECHR).
Rulings
Ruling 1/78 (Re. The Physical Protection of Nuclear Materials, Facilities,
and Transports) [1978] ECR 2151 (Nuclear Materials).
Table of Cases: ”Popular Name”
A number of commonly quoted cases are in the dissertation referred to by
their popular name only. Those are listed below in alphabetical order.
AETR: Case 22/70 Commission vs. Council [1971] ECR 263.
Bangladesh: Joined Cases C-181 and 248/91 European Parliament vs.
Council and Commission [1993] ECR I-3685.
Centro-Com: C-124/95 The Queen ex parte Centro-Com Srl v. HM Treasury and Bank of England [1997] ECR I-0081.
Christian Dior: C-300/98 Parfums Christian Dior SA vs. Tuk Consultancy
BV, decided 14.12.2000 (not yet reported).
Chernobyl: Case 62/88, Greece vs. Council [1990] ECR I-1545.
Commission vs. United Kingdom: Case 804/79 Commission vs. United
Kingdom and Northern Ireland [1981] ECR 1045.
Diamantarbeiters; Cases 2 & 3/69 Sociaal Fonds voor de Diamantarbeiders
vs. SA Ch. Brachfeld and Sons et al. [1969] ECR 211.
Donckerwolcke: Case 41/76 Donckerwolcke et al. vs. Procureur de la République et al. [1996] ECR 1921.
FAO: C-25/94 Commission vs. Council (OJ 1994, C 90/6) [1996] ECR I1469.
Fourth Lomé Convention: C-316/91 European Parliament vs. Council
[1994] ECR I-625.
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France vs. Commission: C-327/91 France vs. Commission [1994] ECR I3641.
First GSP: Case 45/86, Commission vs. Council, [1987] ECR 1517.
Haegeman: Case 181/73 Haegeman vs. Belgium [1974] ECR 449.
Hermés: C-53/96 Hermés International vs. FHT Marketing Choice BV
[1998] ECR I-3603.
Immigration: Cases 281, 283-285, 287/85, Germany vs. Commission [1987]
ECR 3203.
India Agreement: C-268/94 Portuguese Republic vs. Council [1996] ECR I6177.
International Fruit: Joined Cases 21-24/72 International Fruit Company v.
Produktschap voor groenten en fruit [1972] ECR 1219.
Kramer: Joined Cases 3,4 and 6/76 Kramer, Cornelius, and others [1976]
ECR 1279.
Kupferberg: C-104/81 Hauptzollamt Mainz vs. Kupferberg [1982] ECR
3641.
Massey-Ferguson: Case 8/73 Hauptzollamt Bremerhaven vs. MasseyFerguson [1973] ECR 897.
Titanium Dioxide: C-300/89 Council vs. Commission [1991] ECR I-2867.
Tobacco Directive: C-376/98 Germany vs. European Parliament, decided
05.10.2000 (not yet reported).
Waste Directive: C-155/91 Council vs. Commission [1993] ECR I-939.
Opinions
ECHR: Opinion 2/94 (Re Accession of the EC to the European Convention
on Human Rights) [1996] ECR I-1759.
First EEA: Opinion 1/91 (Re First EEA Agreement) [1991] ECR I-6079.
ILO: Opinion 2/91 (Re ILO Convention) [1993] ECR I-1061.
Local Cost Standard: Opinion 1/75 (Re OECD Understanding) [1975] ECR
1355.
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Natural Rubber: Opinion 1/78 (Re Natural Rubber Agreement) [1979] ECR
2871.
Rhine Navigation: Opinion 1/76 (Re Rhine Navigation Agreement) [1977]
ECR 741.
Second EEA: Opinion 1/92 (Re Second EEA Agreement) [1992] ECR I2821.
Second OECD: Opinion 2/92 (Re OECD National Treatment Instrument)
[1995] ECR I-521.
WTO Agreement: Opinion 1/94 (Re WTO Agreement) [1994] ECR I-5267.
Rulings
Nuclear Material: Ruling 1/78 (Re. The Physical Protection of Nuclear Materials, Facilities, and Transports) [1978] ECR 2151.
Table of Abbreviations
ACP countries: African, Caribbean, and Pacific countries
AG: Advocate General
CFSP: Common Foreign and Security Policy
CML Rev.: Common Market Law Review
Court: European Court of Justice
EC: European Community
ECHR: European Convention of Human Rights
ECJ: European Court of Justice
ECR: European Court Report
ECSC: European Coal and Steel Community
EC Treaty: European Community Treaty
EEA: European Economic Area
EFA Rev.: European Foreign Affairs Review
EFTA: European Free Trade Association
EL Rev.: European Law Review
EPC: European Political Co-operation
EU: European Union
Euratom: European Atomic Energy Community
FAO: (United Nation’s) Food and Agricultural Organisation
GATS: General Agreement on Trade in Services
GATT: General Agreement on Tariffs and Trade
ILO: International Labour Organisation
ICLQ: International and Comparative Law Quarterly
JHA: Justice and Home Affairs
LIEI: Legal Issues of European Integration
OECD: Organization for Economic Co-operation and Development
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OJLS: Oxford Journal of Legal Studies
SEA: Single European Act
TEU: Treaty of European Union
ToA: Treaty of Amsterdam
TRIPs: Agreement on Trade Related Aspects of Intellectual Property Rights
WTO: World Trade Organisation
UN: United Nations
YEL: Yearbook of European Law
Yale LJ: Yale Law Journal
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