In the Opinion 1/78 Natural Rubber [1979] ECR 2871[1979] 3 CMLR 639 the
Commission asked the court for a preliminary opinion on whether the draft international agreement on Natural Rubber, which was the subject of negotiations in the United Nations conference on trade and development (UNCTAD) was compatible with the Treaty and, more particularly, whether the Community was competent to conclude that agreement. It appeared that the right of the Community to participate, in the agreement envisaged, was not in itself contested. The only point of disagreement consisted in determining whether the subject-matter of the agreement came entirely within the powers of the Community or whether it might have possibly given rise to a division of powers in such a way as to justify the joint participation in the agreement of the Community and of the Member States. As the Council indicated, the problem of competence, which had been submitted to the court, must be examined from two aspects. The first question is, whether the agreement envisaged, by reason of its subject-matter and objectives, came within the concept of common commercial policy referred to in Article 113 of the Treaty. The second question, if the first question is answered in the affirmative is, whether by reason of certain specific arrangements or special provisions of the agreement concerning matters coming within the powers of the Member States, the participation of the latter in the agreement is necessary. The Court considered first the general aspects concerning the subject-matter and objectives of the agreement. The central question raised by the Commission's request was whether the International Agreement on Rubber came as a whole or at least in essentials within the sphere of the Common Commercial Policy" referred to in Article 113 of the Treaty. It was common ground that the agreement envisaged was closely connected with commercial policy. The difference of views related to the extent of the sphere of application of Article 113 did not make clear, whether that provision entirely covered the subject-matter of the agreement in question
In 1994 the ECJ gave a very important opinion on EC’s external competence; the exclusive competence of the EC, under Art 133 (ex Art 113) EC, could be questioned on other areas of policy such as services and intellectual property.
In this case the Parliament wanted to ensure its right to assent to treaties under Article 300 EC (ex Art. 228) EC, or consultation under Article 37 (ex 43) EC. The dispute over competence was relevant to the various institutions because Article 113 EC allowed for a qualified majority vote, on a proposal from the Commission, without even consulting the European Parliament. The Court stated that the Community had exclusive competence under Art 113 (common commercial policy) to conclude the Multilateral Agreements on Trade in Goods under the WTO Agreement. In antithesis to this judgement the Court issued that the Community and its Member States are jointly competent to conclude the General Agreement on Trade in Services (GATS) and the Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPs)
The Court decided to improve the dispute settlement system, which was to apply to all GATT Codes as well as the new GATS and TRIPs, most notably by providing that all panel reports would be adopted unless unanimously rejected, and setting up a seven-member internal appeal court. Finally, it agreed to set up a common institutional framework, ultimately called the World Trade Organisation (WTO).
In summarising, it has been understood that the EC in its own right and on behalf of the MS takes part in the negotiations in GATT and the WTO. However, the MS can ratify the agreements reached in GATT and the WTO. The ECJ was asked in the Uruguay Round whether the EC alone or the Member States were competent to sign each of the three agreements. For services and intellectual property, the Commission argued that the Common Commercial policy in Article 113 (now 133) was a dynamic concept which expanded over time and must include international trade in services and trade issues in intellectual property, but that was not the view of the Courts that decided against the exclusive competence of the EC on services and intellectual property agreements. EC Art 133 (ex Art 113) was amended in the Treaty of Nice in 2000 on the CCP in order to extend its provisions to the negotiation and conclusion of agreements in the fields of trade in services and the commercial aspects of intellectual property. Paragraph 6 of the amendment contained two limitations to the Community’s powers; where trade agreements with third countries or international organisations have to be negotiated, the Commission can make recommendations to the Council, which in turn authorises the Commission to open negotiations. The mandate and the directives require a decision by a qualified majority of the Council. Powers in that regard are limited in that it cannot conclude agreements going beyond the internal power of the EC. Secondly, while most of the Common Commercial Policy agreements lay within the exclusive competence of the Community, paragraph 6 of the amendments recognises a list of international trade agreements, such as those relating to education, cultural, social and health services, should be concluded by the Member States and the Community together. The general thrust of these amendments was to return the control of Community trade policy back to the Council, hence, in effect to the Member States. In concluding the major effect of the revised Art 133 has been the restriction on Commission’s power to negotiate international agreements on the Community’s behalf.
As it can be seen from the above, the EU has not set out a common procedure policy for the institutions to follow; rather it leaves it upon the Treaties to provide Articles stating the procedure needed, according to the nature of the agreement. Article 252 (ex Art 189c) amended by the Treaty of Amsterdam to confer more power to the European Parliament during the procedure for an agreement. In the beginning, when Art 252 was introduced by the Single European Act, it was used for measures to implement the single market. After the Treaty of Amsterdam the areas that Art 252 covers are mainly concerned with Economic and Monetary Union. Whenever then the Treaty provides that the procedure for the adoption of an act should be in accordance with Art 252, the latter’s co-operation procedure should take place. The procedure is clearly illustrated by paragraphs a to g of Art 252. In those the Council after the proposal form the Commission and the opinion from the European Parliament adopts a common position. The EP then is informed by the Council and the Commission of the reasons that led the former in deciding the common position and the latter’s position. The EP thereafter, has a period of three months to take a decision. If at the end of that period the EP has either approved the common position or has not taken a decision, the Council is bound to adopt the act in relation to its common position. On the case where the EP has rejected the common position by an absolute majority of its members, then the Council needs unanimity in order to adopt the act. Furthermore, the EP can by absolute majority during the time limit, propose amendments to the Commission, which has in turn a month to examine the proposed amendments and form and forward to the Council a re-examined proposal, the EP’ proposed amendments that were not accepted plus an opinion on these amendments. The Council then has a period of three months to either adopt the EP’s amendments by unanimity voting or it can by qualified majority adopt the re-examined Commission’s proposals. It can also amend the Commission’s proposal by unanimity voting, but in the case where the Council has made no decision during the time period, then the Commission’s proposal will be deemed not to have existed
The co-operation procedure entailed a general change in institutional attitudes, particularly in the Commission and the Council. Parliament’s powers in the legislative process were transformed from the weak and essentially unconstructive power of delay to a stronger and potentially constructive role in the drafting legislation. M. Westlake, The Commission and the Parliament: Partners and Rivals in the European Policy- Making Process (Buttleworths, 1994) p37-8
In the Treaty of the European Union another procedure was introduced in order to prevent measures being adopted without the approval of the European Parliament and the Council. Article 251 EC (ex Art 189b) covers today the procedure of co-decision and it stands as it was amended by the Treaty of Amsterdam. The difference between the co-operation procedure and the co-decision procedure lies on the EP’s extended power afforded to it under Art 251. During the co-decision procedure, an act can be adopted as soon as after the EP’s first reading, if the Council has accepted the EP’ proposals. Similarly under Art 251 a rejection by the EP on the Council’s common position would constitute a blockage to the proposed act and could never be adopted.
The Treaty of Amsterdam made important amendments to the negotiation and conclusion of international agreements falling under the second pillar of the EU and more specifically under the Common Foreign and Security Policy. In a significant amendment, Article 24 conferred power on the Council to conclude international agreements, whenever the conclusion of such was necessary in implementing CFSP. These agreements would then be negotiated by the Presidency on the authorisation of the Council, assisted by the Commission and then concluded by the Council acting unanimously on a recommendation by the Presidency. The Treaty of Nice did further amendments especially on the voting system by introducing majority voting on second and third pillar agreements where the Council needs to conclude them. Furthermore, Member States may have their own internal constitutional requirements to comply with before they can be bound by an agreement concluded by the Council, although, the agreement might be provisionally binding. Craig, P & De Burca, G., European Community Law, 3rd edition, 2003,OUP p.36-7. Moreover, these provisions were deemed also to apply to issues falling under the third pillar of the EU. This same extension of majority voting in the conclusion of international agreements also applies to the parallel provisions of the third pillar and under Art 25 TEU
In derogation from the exercise of the Treaty making power regulated by EC Art 3000 (ex Art 228), international agreements concerning money or foreign exchange regime matters between the Community and non- Community States or international organisations, shall be negotiated and concluded according to arrangements laid down by the Council acting by a qualified majority on a recommendation from the Commission. These arrangements should ensure that the Community speaks with one voice on such occasions. Agreements concluded according to such arrangements will be binding on the European Central Bank, the Community institutions and the Member States. Lasok, KPE, Law & Institutions of the EU 7th edition , (Buttleworths, 2001) p 576
In Case C-189/97 EP v Council [1999] ECR I-4741 the EP argued first, that the Treaty on European Union haD substantially increased its involvement in the conclusion of international agreements, especially by enlarging the scope of the assent procedure. The Parliament maintained that by requiring its assent for the conclusion of agreements with important budgetary implications, that provision has been intended to safeguard its internal powers as a constituent part of the budgetary authority. In the proposed EU Constitution moreover, in paragraph 7, Art III-217 it is stated that the EP is required to give consent on the following issues: association agreements; union accession to the European Convention for the Protection of Human Rights and Fundamental Freedoms; agreements establishing a specific institutional framework by organising cooperation procedures; agreements with important budgetary implications for the Union; and finally agreements covering fields to which the legislative procedure applies.. Moreover the proposed Constitution declares that apart from situations where agreements relate exclusively to the common foreign and security policy, the Council of Ministers shall adopt a decision after consulting the European Parliament. The European Parliament shall deliver its opinion within a time-limit which the Council of Ministers may lay down according to the urgency of the matter. In the absence of an opinion within that time-limit, the Council of Ministers can act.
Paragraph 1 of Article III-225 is new and attempts to summarise the ECJ case law regarding the not the nature, but the existence of external competence within EC law
The Union may conclude agreements with one or more third countries or international organisations where the Constitution so provides or where the conclusion of an agreement is necessary in order to achieve, within the framework of the Union's policies, one of the objectives fixed by the Constitution, where there is provision for it in a binding Union legislative act or where it affects one of the Union's internal acts. Agreements concluded by the Union are binding upon the institutions of the Union and on its Member States. Furthermore the Constitution leaves Article 310 untouched in Article III- 226 of the EU constitution.
Article III- 227 merged under Art 24 EU (and in effect Art. 38 EU) and under Art. 300 EC and the structure has been the same only with some minor adjustments. The procedure then has been recognised as follows: the Commission or the Union Minister for Foreign Affairs when the agreement exclusively or principally relates to the common foreign and security policy, should submit recommendations to the Council of Ministers, which shall adopt a European decision authorising the opening of negotiations. In connection with the European decision authorising negotiation, depending on the subject of the future agreement, the Council of Ministers shall nominate the negotiator or leader of the Union's negotiating team. It may also address negotiating directives to the Union's negotiator and may designate a special committee in consultation with which the negotiations must be conducted. On a proposal from the negotiator, the Council of Ministers shall adopt a European decision authorising the signing and agreement and, if necessary, its provisional application. The Council of Ministers shall adopt a European decision concluding the agreement on a proposal by the agreement negotiator. At the same time through the derogative powers of the proposed EU Constitution to the Council of Ministers, the latter can authorise its negotiator to approve on the Union's behalf modifications to the agreement where it provides for them to be adopted by a simplified procedure or by a body set up by the agreement. The principle of qualified majority throughout the procedure remains the same. The Constitution also provides that the Council will only have to act unanimously when the agreement covers a field for which unanimity is required for the adoption of a Union act as well as for association agreements and for Union accession to the European Convention for the Protection of Human Rights and Fundamental Freedoms.
10. The Council of Ministers, on a proposal from the Union Minister for Foreign Affairs or the Commission, shall adopt a European decision suspending application of an agreement and establishing the positions to be adopted on the Union's behalf in a body set up by an agreement, when that body is called upon to adopt acts having legal effects, with the exception of acts supplementing or amending the institutional framework of the agreement.
11. The European Parliament shall be immediately and fully informed at all stages of the procedure.
12. A Member State, the European Parliament, the Council of Ministers or the Commission may obtain the opinion of the Court of Justice as to whether an agreement envisaged is compatible with the provisions of the Constitution. Where the opinion of the Court of Justice is adverse, the agreement envisaged may not enter into force unless it is amended or the Constitution is revised in accordance with the procedure laid down in Article IV-6.
