www.agp.org | Archives - WTO info: EU Constitution would give all power to Lamy and WTO if countries do not oppose

Last week the presidency of the Convention gave its proposals on Constitution's articles on external relations. This is part II, section B of the Constitution and it includes also articles 23 and 24 on common commercial policy.

These articles are a total nightmare, because they would shift investent and all services including education, health and social services and culture into the exclusive competency of common commercial policy.

So it is absolutely important to demand as soon as possible that :

a) foreign direct investment should be dropped out from the competency of the common commercial policy in articles 23 and 24.1.

France might be ready to support this. We should ask also other countries to support this.

b) into the beginning of the article 24.4. (or alternatively into 24.5.) there should be added :

"The negotiation and agreements on educational services, social and human health services and cultural and audio-visual services, shall require common accord of the Member States in addition to a Community decision. Such agreements shall be concluded jointly by the Community and the Member States".

Finland and France might be ready to support something into this direction. We should ask also other countries to support this.

Also other changes to the article 24 should be demanded to emphasize for example the role environmental protection in 24.1. and the role of the European parliament and national parliaments instead of the Commission. In the article 24.3. to the sentence that "The Commission shall make recommendations to the Council, which shall authorise the Commission to open the necessary negotiations" we should add "after consulting the European Parliament".

In the light of the present situation it is extremely important to demand change to the horrible definition of shared competency in article 10 of part I as well as various changes to its other articles 11, 12 and 15, if we do not want the WTO to become the major ruler in our Constitution, if any constitution is to be acceptable at all.

(I have written about all of these articles the proposals for correction in Finnsh, but right now I do not have time to translate them)

Below are the horrible proposals by the presidency of the convention :

CHAPTER 2: COMMON COMMERCIAL POLICY

Article 23

By establishing a customs union between themselves Member States aim to contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and to foreign direct investment, and the lowering of customs barriers.

Comments (by the Praesidium) :

Article 2 takes over the first paragraph of Article 131 TEC, adding a reference to foreign direct investment (as in Article 24) in recognition of the fact that financial flows supplement trade in goods and today represent a significant share of commercial exchanges. The second paragraph of Article 131 TEC has been deleted as the reference to the abolition of customs duties was obsolete. (For reference, the text of the second paragraph is as follows: "The common commercial policy shall take into account the favourable effect which the abolition of customs duties between Member States may have on the increase in the competitive strength of undertakings in those States").

Article 24

1. The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union's external action, as set out in Article 1 of this Title.

2. The European Parliament and the Council shall adopt, in accordance with the legislative procedure, the European laws and framework laws required to implement the common commercial policy.

3. Where agreements with one or more States or international organisations need to be negotiated, the relevant provisions of Article 33 of this Title shall apply. The Commission shall make recommendations to the Council, which shall authorise the Commission to open the necessary negotiations. The Council and the Commission shall be responsible for ensuring that the agreements negotiated are compatible with internal Union policies and rules. The Commission shall conduct these negotiations in consultation with a special committee appointed by the Council to assist the Commission in this task and within the framework of such directives as the Council may issue to it. The Commission shall report regularly to the special committee on the progress of negotiations.

4. For the negotiation and conclusion of agreements in the fields of trade in services involving the movement of persons and the commercial aspects of intellectual property, the Council shall act unanimously where such agreements include provisions for which unanimity is required for the adoption of internal rules.

5. The exercise of the competences conferred by this Article in the field of commercial policy shall not affect the delimitation of internal competences between the Union and the Member States, and shall not lead to harmonisation of legislative or regulatory provisions of Member States insofar as the Constitution excludes such harmonisation.

Comments (by the Praesidium)

1. For political reasons, the Praesidium decided not to present a text wholly based on the recommendations of Working Group VII in this area but to propose maintaining a reference to the derogation on the negotiation and conclusion of agreements in the fields of trade in services involving the movement of persons and the commercial aspects of intellectual property, where such agreements include provisions for which unanimity is required for the adoption of internal rules. It will be remembered that there was majority support within Working Group VII for extending qualified-majority voting to all areas of commercial policy, including services and intellectual property (without prejudice to the current restrictions on harmonisation in certain internal policy areas). This recommendation received broad support during the discussion in the plenary session. Nevertheless, the Praesidium noted that, among the many Convention members who had reservations, some had expressed a desire to maintain the current derogations and others had stressed the need to avoid harmonisation in internal policy areas via international agreements concluded by qualified majority. Although the derogations laid down in the existing Article 133(5) have been retained in this draft article, the proposed text has been simplified compared with the existing text, notably to take account of the recommendations made by the Working Group on Simplification on instruments and procedures.

2. The first paragraph takes over Article 133(1) TEC adding trade in goods and services and the commercial aspects of intellectual property as well as foreign direct investment (see also Article 23 - this reference to foreign direct investment was inserted in recognition of the fact that financial flows supplement trade in goods and today represent a significant share of commercial exchanges.) A derogation on the negotiation and conclusion of agreements in the fields of trade in services involving the movement of persons and the commercial aspects of intellectual property has been maintained in paragraph 4 (see comments on that paragraph).

3. Moreover, a reference to Article 1 of this Title, which sets forth the principles and objectives of external action, was added to the first paragraph, in keeping with the recommendation made by Working Group VII to group those principles and objectives in a single horizontal article covering the whole title. For reference, the text of Article 133(1) TEC is as follows: "The common commercial policy shall be based on uniform principles, particularly in regard to changes in tariff rates, the conclusion of tariff and trade agreements, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies."

4. With regard to paragraph 2, it is proposed that the standard legislative procedure be applied for the adoption of implementing measures. In this context, it will be remembered that the internal measures in this field have been adopted by qualified majority since the Treaty of Rome. This change also accounts for Working Group VII's recommendation that the European Parliament's role in commercial policy should be enhanced (CONV 459/02, page 8).

5. Paragraph 3 is based on paragraph 3 of Article 133 TEC (moving the reference to the article which is to replace Article 300 TEC to the beginning of the text). Working Group VII having recommended an enhanced role for the European Parliament in this field (CONV 459/02, page 8), the exception concerning commercial policy contained in Article 300(3) TEC has been deleted in Article 33 of this Title on the conclusion of agreements, which replaces Article 300 TEC.

6. Paragraph 4 incorporates the derogation contained in the second subparagraph of Article 133(3) concerning the negotiation and conclusion of agreements in the fields of trade in services and commercial aspects of intellectual property where such agreements include provisions for which unanimity is required for the adoption of internal rules, but specifies thatin the field of services the derogation relates to services involving the movement of persons. In its Opinion 1/94 (paragraph 44), the Court found that the cross-border supply of services not involving travel by the provider to the beneficiary's country or vice versa was not unlike trade in goods, which was unquestionably covered by the common commercial policy.

7. Paragraph 5 reflects two of Working Group VII's recommendations. Firstly, the second part of recommendation 8(c) (underlined): "There was a high degree of support in the Working Group in favour of the use of qualified-majority voting in all areas of commercial policy, without prejudice to current restrictions on harmonisation in internal policy areas (CONV 459/02, page 7). Secondly, the last part of recommendation 4 (CONV 459/02), according to which "the Treaty should indicate that the Union is competent to conclude agreements dealing with issues falling under its internal competences", that "the new provision in the Treaty should also specify that the Council should deliberate on such agreements according to the same voting procedure which would apply to internal legislative deliberations on the same issues (normally qualified-majority voting)", but that "this provision should in no way modify the delimitation of competences between the EU and Member States".

8. If the Convention wishes to retain exceptions to the Union's exclusive competence in accordance with the second subparagraph of Article 133(6), according to which agreements relating to trade in cultural and audiovisual services, educational services, and social and human health services, fall within shared competence, consideration should be given to introducing this exception into Article 11(2) of Part I of the Constitution (Title III, Union competences).

9. Articles 132 and 134 TEC are not taken over in the text. Article 132 has not been used (export policy is, moreover, covered by Article 133(1) TEC which is taken over in Article 3 of this Title). Article 134 TEC has not been used since 1993, as it is incompatible with the internal market (no more internal borders).