BILATERAL DEALS WITH EU MEMBER STATES IS A NON STARTER

Article 3.1 (e) of the Treaty on the Functioning of the EU grants the EU ‘exclusive competence’ in relation to ‘common commercial policy. Article 207 (1) reads as follows: “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 aspect of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalization, 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”

Thus, there is no doubt that the EU has the exclusive competence to conduct trade negotiations and enter into trade agreements regarding tariffs, regulations, intellectual property and so on. Member States cannot conduct their own bilateral negotiations or enter into their own agreements, except insofar as the EU itself can authorize Member States to enter into bilateral agreements.

The Treaty of Lisbon (Art 207) streamlines EU trade policy by confirming that all key aspects of external trade including all services, trade related intellectual property rights and, most importantly, foreign direct investment (FDI) are under exclusive EU competence.  Exclusive competence means the formal basis for decision making is qualified majority voting.  It also means that mixed agreements (those parts of agreements that include EU and Member State competence) are marginal. The exclusive competence to FDI means that the EU can negotiate comprehensive agreements covering trade and investment. 

The formal position of the EP in EU external trade policy takes place in three main ways. First, Article 207(2) means the Council has to share powers under the Ordinary Legislative Procedure to adopt measures that define the framework for implementing the common commercial policy (i.e. EU legislation concerning external trade) with the EP.  Autonomous trade measures such as Generalised System of Preference (GSP) rules are adopted jointly by the EP and Council.  The EP does not, however, have any direct role in implementing trade instruments. This remains primarily a duty of the European Commission, but with the Council and possibly the EP exercising some control. 

Second, Art 207 enhances the ability of the EP to influence the Commission during trade negotiations.  The International Trade Committee (INTA) of the EP is provided with information on the same terms as the Council's Trade Policy Committee (the former Art 133 Committee).  The latter however, retains more power in that it  also assists the Commission, whereas the Commission is only required to report to the INTA committee.  The Treaty of Lisbon does not grant the EP powers to authorise the EU to engage in trade negotiations.  Arts 207 (3)  clearly states that the Council, on the proposal from the Commission, retains power to authorise the opening of negotiations.  Therefore, in contrast to the role of the US Congress, the EP is not empowered to authorise and thus set the objectives of trade negotiations.  The EP is, however, seeking a greater say in shaping the negotiating aims by setting some preconditions for its ultimate consent. 

Third, the Treaty of Lisbon enhances the EP's role in ratifying trade agreements.  Arts 218 (6) (a) (v) adds a further criterion requiring the EP to grant its consent  if an agreement covers fields to which Ordinary Legislative Procedure (OLP) applies.  As trade is now covered by the OLP, the  EP must give its consent before all trade agreements are adopted.

Article 205 brings EU trade policy into the common EU external action, together with development, environmental and foreign policy, as well as humanitarian assistance. The aim here is to promote greater coherence across the range of EU external policies.  Article 218 (3), which provides a common basis for negotiating all external policies, gives the Council the authority to nominate either the Commission or the High Representative of the Union for Foreign Affairs and Security Policy (HRFSP) as EU negotiator.  In practice the HRFSP negotiates foreign policy issues and the Commission continues to negotiate trade agreements.  Trade policy however remains in DG Trade.