The endeavor to establish tighter economic integrations has always been present in world history. Let us just think about the above-mentioned GATT agreement, the WTO, which was developed from the regulatory system of the latter, the EFTA states, the NAFTA agreement in North America, and so on. As a result of these agreements, a tighter economic integration was formed between the con-tracting parties. From the very beginning, it emerged as a clear need that the
Eu-263 World Trade Organization: Understanding the WTO – Basics – Principles of the trading system https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm.
264 Hector Gros Espiell, ‘The Most-Favored-Nation Clause’, Journal of World Trade, 1971, Issue 1, pp.
29–44.
265 Michael J. Trebilcock & Shiva K. Giri, ‘The National Treatment Principle in International Trade Law’, in: E. Kwan Choi & James C. Hartiga (ed.), Handbook of International Trade: Economic and Legal Analyses of Trade Policy, Blackwell, Oxford 2004, pp. 185–186.
266 World Trade Organization: Committee on Trade and Development: developmental aspects of the Doha Round of Negotiations. WT/COMTD/W/143/Rev. 5, 28 October, 2010.
267 See also: Andrew H. Charlton & Joseph E. Stiglitz, ‘A Development-friendly Prioritization of Doha Round Proposals’, The World Economy, Vol. 28, No. 3, 2005, pp. 293–312.
ropean Union should act in unison not only with regard to the internal market but also in its external economic relationships. It is this policy that the common commercial policy of the Union wishes to regulate, which is basically the exter-nal aspect of the interexter-nal market.
The legal grounds and the scope of the common commercial policy were laid down in Articles 110-115 of the Treaty of Rome (1957), according to which, in harmony with the goals of GATT, the external purpose of establishing the cus-toms union is to promote the harmonious development of world trade, to gradu-ally eliminate the international trade barriers, as well as the to gradugradu-ally reduce the customs barriers.268 Initially, the common commercial policy of the Union clearly concerned the goods, with regard to the fact that the primary goal of the Community was to establish a tighter economic union, where the barriers to im-ports and exim-ports between the member states were meant to be broken down.
The basis of the common commercial policy is the regulation of customs tariffs, as well as the reduction of the barriers to trade.269
On July 1, 1967, the Merger Treaty came into effect, which merged the Euro-pean Atomic Energy Community, the EuroEuro-pean Coal and Steel Community, as well as the European Economic Community, and from this point on, the three supranational organizations acted jointly as the European Community on the in-ternational scene. On July 1, 1968, the customs union between the six founding countries was realized earlier than expected. The customs borders between the member states were eliminated and the formation of the common customs rules began. After the 12-year transitional period that followed the signing of the founding treaties, the single market came into existence within the European Community on December 31, 1969, so the free movement of goods, persons, services and capital became a reality.
Up to 1970, the member states entered into commercial agreements with third countries outside the Community in their own competence. However, the Com-munity as a legal entity acting independently on the international scene also con-cluded bilateral agreements at the same time with third countries, for example, with Israel in 1964, and then it also acted autonomously at the Kennedy Round in 1963–1967. From January 1, 1970, the Council was authorized to make its own decisions with qualified majority on issues concerning the common com-mercial policy.270The issues of competence between the member states and the
268 Dr. Egon Dienes-Oehm, ‘Kereskedelempolitika (Commercial Policy)’, in: Miklós Király (ed.), Az Európai Közösség Kereskedelmi Joga (The Commercial Law of the European Community), KJK-KERSZÖV Jogi és Üzleti Kiadó Kft, Budapest 2003, pp. 134–135.
269 Eur-lex: Summaries of EU legislation: Common commercial policy (http://eur-lex.europa.eu/legal-content/HU/TXT/?uri=URISERV:a20000).
270 Eur-lex: Summaries of EU legislation: Common commercial policy (http://eur-lex.europa.eu/legal-content/HU/TXT/?uri=URISERV:a20000).
European Communities regarding the common commercial policy remained unclear in many cases,271 so this situation was settled by the Court of Justice of the European Union in its opinion No. 1/75272 in connection with the Low Cost Standard case273 in 1975.
In the above-mentioned case, the Court declared that pursuant to Article 113 of the EEC Treaty, the common commercial policy is one of the tools of realiz-ing the functionrealiz-ing of the srealiz-ingle market.274 The establishment of a single market is a common interest of the member states, so it is these common interests of the member states that should be reflected in the common commercial policy as well, hence, there should be cooperation in this field. Thus, it will become im-possible for the member states to enforce their own interests with regard to com-mercial policy in their foreign relations, by keeping their own competence and thus, jeopardizing the interests of the Community.275 In its opinion, the Court de-clared that the member states are not authorized to enter into international agree-ments, or to serve justice on commercial policy, even if the Community has not acted yet.276 Thus, it became clear that the Community has exclusive competence on these issues but in exceptional cases, the Court continued to allow the mem-ber state to act in its own competence in commercial policy issues.277
Although the 1975 court decision clarified the exclusive competence of the Community in the field of common commercial policy, it was still not clear what constitutes the internal content of the Community’s common commercial policy.
With regard to the fact that the primary goal of economic integration was to es-tablish an internal market, the first step of which was to form the customs union, it was doubtless that it was exclusively the Community that would act in any in-ternational agreements on goods. However, it again became the responsibility of the Court to answer the question whether intellectual products, services and di-rect investments were part of the common commercial policy.
In its opinion No. 1/78, the Court had yet another opportunity to take a stance on the Community’s competence in common trade activities, as well as the scope of application of the common commercial policy. The case focused on the
271 Panos Koutrakos, EU International Relations Law, Hart Publishing, Oxford, 2006, p. 11.
272 Opinion No. 1/75 on OECD’s understanding on a local cost standard, ECR [1975] 1355.
273 Dorota Leczykiewicz, ‘Common Commercial Policy: The Expanding Competence of the European Union in the Area of International Trade’, German Law Journal, Vol. 6, No. 11, p. 1674.
274 Dr. Ildikó Bartha: Az Európai Közösség és a tagállamok nemzetközi szerződéskötési hatáskörei az európai bíróság esetjogában. PhD értekezés (The competences of the European Community and the member states to conclude international agreements in the case law of the European Court of Justice.
PhD dissertation), Miskolc 2010, p. 47.
275 Bartha 2010, p. 48.
276 Case 1/75, Low Cost Standard, [1975] ECR, 1355; Case 41/76, Suzanne Criel, neeDonckerwolcke and Henru Schou v. Procureur de la Republique, [1976] ECR, 1921.
277 Piet Eeckhout, External Relations of the European Union – Legal and Constitutional Foundations, Oxford University Press, 2004, p. 16.
issue of competence in concluding an international agreement on natural rub-ber.278
The competence of entering into the agreement became questionable because this international agreement did not only involve commitment by the Commu-nity but it would also have imposed an individual financial burden on the mem-ber states. Finally, the Court declared that the exclusivity of the competence of the Community depends on whether it would like to finance its contributions from their own, i.e. community budget, or these amounts would directly burden the member states. In the latter case, the member states will participate in the agreement jointly with the Community.279 By this, the earlier statement, i.e. that in certain cases, there was no accurate decision concerning the exclusive compe-tence of the Union, was confirmed. Furthermore, the Court expressly acknowl-edged that the provisions set out in Article 113 of the EEC Treaty should be in-terpreted expansively, i.e. the scope of application of common trade will not take the form of an exhaustive list.
Neither the Single European Act (1986) nor the Maastricht Treaty (1992) brought a significant change in the common commercial policy of the Union.
It should be mentioned what effect the GATT regulation and the GATT rounds had on the extension of the scope of application of the common commercial pol-icy.280 During the Uruguay Round, as mentioned earlier, an agreement on the es-tablishment of the WTO was concluded. Furthermore, the General Agreement on Trade in Services (hereinafter referred to as: GATS), as well as the Agreement on the Trade-Related Aspects of Intellectual Property Rights (hereinafter re-ferred to as: TRIPS) were accepted.281 In relation to this, the Court repeatedly explained its stance on the competences of the member states, in its opinion No.
1/94, in which the competence of the Communities to conclude the GATS and TRIPS agreements was specifically discussed. Finally, the Court declared in its opinion that the objective scopes of both agreements affected such areas which do not belong to the scope of application of the Community’s common commer-cial policy, so the conclusion of the GATS and TRIPS agreements is the shared competence of the member states and the Community.
The substance of this opinion was incorporated into primary law by the Ams-terdam Treaty. Based on this, ‘the Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, may extend
278 Bartha 2010, pp. 54–57.
279 Opinion No. 1/78 (International Natural Rubber Agreement) [1979] ECR 2871.
280 Bartha 2010, p. 59; Péter Balázs, ‘Közös kereskedelempolitika (Common Commercial Policy)’, in:
Tamás Kende & Tamás Szűcs (ed.), Az Európai Unió politikái (The Policies of the European Union), Osiris, Budapest 2000, pp. 29–46; p. 37.
281 Marrakesh Declaration of 15 April 1994; Annex 1B: General Agreement on Trade in Services (GATS), Annex 1B: Trade-Related Aspects of Intellectual Property Rights (TRIPS).
the application of the common commercial policy to international negotiations and agreements on services and intellectual property.’282
The Nice Treaty (2001) clarifies the competence issues of the member states and the Community with regard to the conclusion of international agreements.
According to the amendment, the Community was only authorized to conclude international agreements in the field of the common commercial policy ‘if the mandate does not exceed its internal competence, or does not surpass its compe-tence in legal harmonization.’283
In the Lisbon Treaty (2009), the rules of common commercial policy were in-corporated into a single system. The Reform Treaty determines and makes it clear that the common commercial policy is in the exclusive competence of the European Union. It is in Part Five of the Treaty on the Functioning of the Euro-pean Union that the legal grounds of the common commercial policy are laid down (Articles 206-207). In the Treaty, the objectives and scope of application of the commercial policy are defined (which we will explain later). It is here that the procedural rules of the Union on the conclusion of international agreements are clarified, furthermore, it is made clear that in the case of agreements on ser-vices, intellectual property, as well as direct foreign investments, the Council should act unanimously if the agreement contains such provisions where una-nimity is required even in the case of the internal rules.284