Sustainable Development = SD
Sustainable Development Goals = SDG
Why a global policy on SD?
Who is responsible for realizing the SDGs?
How should trade fit into the SDGs?
The concept of sustainable development
• Definition (1987):”Sustainable Development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
The dimensions of sustainability
Economic sustainability.
Ecological sustainability.
Social sustainability.
Interactions between SDGs
Synergies and conflicts between SDGs.
An example; trade and the environment.
Sustainable Development as a legal domain
Policy or law? A continuing debate.
Agenda 2030
Agenda 2030 consists of a Declaration, 17 Goals and 169 targets to be reached by 2030.
Agenda 2030 has five overarching themes, known as the five Ps: people, planet, prosperity, peace and partnership, which span across the 17 SDGs.
High-Level Political Forum on Sustainable Development (HLPF) is responsible for the UNs SD policy.
Agenda 2030 • https://sdgs.un.org
Agenda 2030
Principles for implementation (SDG 17;”global partnership”).
Follow-up and review.
Universal; apply to all states, and all states are collectively responsible for its implementation.
The goals are integrated and indivisible, which means that no goal can be achieved without successful implementation of the other goals (interactions, a critical issue). All goals are necessary! Action in one area affect outcome in others. They balance the three dimensions of sustainability.
Leave no one behind. The goals should be implemented with special regard to those with the worst conditions for achieving sustainability.
Trade and Sustainability
Sustainable Development is mentioned in the preamble to the Marrakesh Agreement
”International trade is an engine for inclusive economic growth and poverty reduction, and contributes to the promotion of sustainable development”.
Several of the trade-related SDGs aim to promote SD through WTO.
(a brief overview of the WTO).
SDG 17 recognizes trade as a means of implementation for the 2030 Agenda.
Trade is mentioned in Agenda 2030 Goal 17.10-12 (three trade specific targets).
”Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the WTO, including through the conclusion of negotiations under its Doha Development Agenda” (17.10).
SDGs specifically related to trade
SDG 2 (2.b), 9 (9.3), 12 and 14 (14.4).
Special and Differential Treatment (SDT) in trade
Agenda 2030 affirms the principle of SDT in SDG 3, 10 and 16.
Target 3a of SDG 3
”Provide access to affordable essential medicines and vaccines, in accordance with the Doha Declaration on the TRIPS Agreement and Public Health, which affirms the right of developing countries to use to the full the provisions in the Agreement on Trade-Related Aspects of Intellectual Property Rights regarding flexibilities to protect public health, and, in particular, provide access to medicines for all”.
Financing for development
Addis Ababa Action Agenda (part of Agenda 2030), p. 79-92.
WTO 2020 report to HLPF • https://sustainabledevelopment.un.org/content/documents/26126W TO_HLPF_Input_2020.pdf
WTO 2020 report to HLPF
The ”trade war” is an overarching problem.
Three main problems identified.
The ”blocked” Dispute Settlement System.
Improving the regular work in the WTO.
Advancing negotiations at the WTO.
EU policy
Sustainable Development chapters in EU FTAs.
ADD CHAPTER 19 WTO AND THE AGENDAS (PDF) AND HLPF (PDF)
WTO Legal Order
Outline
Importance of free trade
The functioning of the WTO
Basic principles
The Dispute Settlement System
The Future of WTO?
Free trade?
Comparative advantage
Production at a lower cost
Opportunity cost of production across countries
David Ricardo (1871)
Works only when international trade is free
Facilitates competition
Economic growth
WTO mandate
Minimize obstacles to global trade.
Countries which trade with each other do not go to war with each other – peace through law and peace through prosperity
Reduce tariffs on products
Prohibit quotas on products
Does not allow bans on products
Other trade-related problems
Subsidization
Excessive technical regulation
WTO - Forum for talks, negotiations and agreements
WTO can only do what its members want (164!)
Organization for intergovernmental cooperation
Permanent negotiating forum between sovereign states
One nation (government) – one vote
Consensus
Ministerial conference (highest decision level)
“Rounds”
8 rounds since 1940 (GATT)
Doha Round (9th round) started in 2001 and is still under way …
The WTO Agreements
The Agreement on Agriculture
The General Agreement on Trade in Services (GATS)
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
The Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement)
The Agreement on Technical Barriers to Trade (GATT)
Decision-making
General rule
Consensus
Dispute settlement
Negative (reversed) consensus
Tariffs
WTO converts quotas into tariffs
Bound tariffs (schedules) – Tariffs committed to for each state in its accession protocol
Schedules of Tariff Concessions – List of tariff rates for a whole range of imported products.
Ceiling not a floor – applied tariffs often lower
Rules of origin – WTO includes special rules on how to establish the origin of the particular good. Only goods with origin in WTO-state are covered by the rules.
Non-tariff barriers
Quantitative restrictions (banned)
Internal measures (e.g. tax measures)
– Technical barriers to trade (TBT): Product characteristics, production methods, packaging, labelling etc
– Sanitary and Phytosanitary measures (SPS): Human or animal health Risk assessment i.e scientific evidence
– Not more trade-restrictive than necessary in order to protect legitimate objectives
Prohibition on discrimination
Non-discrimination as to origin
National treatment
Same product – “like” products
– EU:s import regime on bananas (are South American bananas and bananas from former European colonies alike?)
– Japanese law that taxed foreign alcoholic beverages like vodka of a higher rate than Shoohu
Test – what is “like”
Physical properties/product characteristics
End use
Consumer preferences
Customs classification
Open discrimination covers also indirect, hidden and disguised discrimination
National treatment
No discrimination of imported goods or services to protect domestic industry
Clear examples:
– GATT – Article III – tax and market regulation
– GATS – Article XVII – where commitments have been made and subject to conditions set out in schedule
– TRIPS – as regards to ”protection of intellectual property”
Equality of competitive opportunities
Most favoured nation treatment
Most favoured nations
– Government must not impose different legal requirements on quotas coming from different countries
Comparison between the treatment of two (or more foreign goods)
Like products/conditions of competition (-Also services, service providers and IP rights-holders )
Preserves globalization
Structural exceptions
Regional trade agreements (600)
Free trade agreement (FTA:s) and customs unions
Must be reported to the WTO so they can be checked for consistency with WTO obligations
Article XXIV GATT (1994)
Duties and other regulations applied to commerce with third parties must not be higher than they were before the formation of the customs union or FTA; and
The customs union or FTA should be with respect to “substantially all trade” between the constituent members
The formation of the customs union/FTA can be prevented if it does not comply with the requirements.
Legitimate exceptions?
Policy objectives
Sustainable development
Environmental issues
Multilateral environment agreements
Social issues
International Labour Organization (ILO)
Public moral
Human, animal or plant life or health
Necessity test (proportionality requirement)
Developing countries can enjoy non-reciprocal benefits: special and differential treatment (enabling clause)
National security: strategic domestic production
Article XX – two-tiered test
Does the measure fall within one of the exceptions listed in Article XX
If yes, does it satisfy the ”chapeau”?
– Not constitute a means of ”arbitrary or unjustifiable discrimination” between countries where the same conditions prevail.
– Not constitute a ”disguised restriction on trade”
• Example: US – Shrimp: test satisfied
Transparency
WTO members must be as open and clear as possible when enacting laws that affect international trade
Obligation to publishing all trade-related laws
Notification requirement for WTO members when new laws are created and modified
Enquiry points: unit available to respond to request for information in every member state (in Sweden National Board of Trade)
The Dispute Settlement System
Prior consultations mandatory
– The parties must try to reach a settlement through informal discussions
Appointment of panel of experts (3-5)
– Independent and impartial judges
– WTO maintains a list of individuals who possess the required qualifications
Appeal possible
The Appellate Body
Permanent, 7 judges
4 year terms – one renewal possible
Recognised experts with proven experience in international trade law
Divisions (chambers) of 3 members
Reverse consensus mechanism
Matters of law
The US has blocked appointments to the Appellate Body - shutdown since 12 December 2019
No private parties
Private companies cannot bring claims
Amicus curiae procedure
Sanctions/enforcement
The country does not have to pay monetary compensation (damages)
The country must stop misbehaving
If the violation continues
– Retaliation AND Cross-retaliation
WTO in crisis?
“A day after U.S. President Donald Trump escalated his trade war with China by imposing tariffs on $200 billion of Chinese imports, the European Union announced how it believes unfair trade, excessive subsidies and other problems should be tackled.
“Now the WTO system is slowly grinding to a halt. It is probably in its deepest crisis ever,” EU trade chief Cecilia Malmstrom told a news conference. “Key members are not supporting the system but opening unilateral measures with effects we unfortunately know too well.” (From Reuters September 2018)
Reform process
READ WTO book CH 2 🡪4 Legal effects of WTO CH 4. Direct and indirect effect.
EU Legal order
Outline
Treaties, legislation and law making
Legal sources
Direct effect, primacy and consistent interpretation
State liability
The EU institutions
Article 13 TEU
The Union's institutions shall be:
the European Parliament,
the European Council,
the Council,
the European Commission,
the Court of Justice of the European Union (including the General Court)
the European Central Bank,
the Court of Auditors.
Each institution shall act within the limits of the powers conferred on it in the Treaties
…. 4. The European Parliament, the Council and the Commission shall be assisted by an Economic and Social Committee and a Committee of the Regions acting in an advisory capacity
Different legislative procedures
Ordinary legislative procedure Special legislative procedure
Consultation procedure
Consent procedure
Enhanced cooperation
Ordinary legislative procedure
Art. 10 TEU – double democratic legitimacy (EP + Council)
Art. 294 TFEU
Cooperation – interactivity (EP/Council) until a decision is made
🡪Co-decide 🡪 Consult 🡪 Consent
Three readings if necessary!
Commission proposal
EP first reading
Council first reading (Common position)
EP second reading
Council second reading
Conciliation
EP third reading
Council third reading
END
Sources of Union law
1. Primary law
TEU
TFEU
CFR
Accession agreements/Withdrawal agreements
General principles of law (Constitutional status, C-101/08, Audiolux, para 63)
International treaties which have been agreed between the Union and third countries and international organizations
Secondary law: binding
Case law from the ECJ and GC
Secondary law: non-binding
Travaux préparatoires (preparatory work)
Opinions of Advocate Generals
Doctrine
Hierarchy in Primary Law
Treaties
– Annexes (Art. 51 TEU)
– Protocols (Art. 51 TEU)
Declarations (Cf. case C-329/95, VAG Sverige AB, para. 26)
– Common declarations
– Unilateral declarations
EU Charter of Fundamental Rights?
Protection of Fundamental Rights
Article 6.1 TEU The Union recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union of 7 December 2000, as adapted at Strasbourg, on 12 December 2007, which shall have the same legal value as the Treaties …
Article 6.2 TEU The Union shall accede to the European Convention for the Protection of Human Rights and Fundamental Freedoms.
Article 6.3 TEU Fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union's law.
Hierarchy in Secondary Law
Binding legal instruments : – Regulations – Directives – Decisions
Legislative acts and non-legislative acts (after Lisbon) : – Delegated acts – Implementing acts
Significance of non-binding acts from the Commission in different areas
The structure of a legislative act: – Relationship between the preamble and the articles
Effectiveness of EU law
Direct effect
Primacy
Conforming (consistent) interpretation
State liability
Direct Effect • 26/62 Van Gend en Loos
Import of a chemical substance
Custom duty - 3-8 %
The position of the MS
The contractual parties to the Treaty
International law – no automatic rights for individuals – depends of the national legal system
Court of Justice
Different purpose
Individuals are mentioned in the preamble
The preliminary ruling procedure
New legal order of international law
”… the Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only Member States but also their nationals. Independently of the legislation of Member States, Community law therefore not only imposes obligations on individuals but is also intended to confer upon them rights which become part of their legal heritage. These rights arise not only where they are expressly granted by the Treaty, but also by reason of obligations which the Treaty imposes in a clearly defined way upon individuals as well as upon the Member States and upon the institutions of the Community.”
Consequences of direct effect
Increased legal protection for individuals.
National courts were given special responsibility for the application of EU law.
The system of preliminary rulings became useful in practice.
EU court had significantly more opportunities to develop EU law.
Primacy - 6/64 Costa mot Enel
Unpaid electricity bill
Shareholder in an Italian electricity company
Italian law on the nationalization of the production and distribution of electric energy
EC Treaty rules on monopolies, establishment and state aid
Lex posterior principle
Under the Italian constitution the national law on nationalization should apply (no Union law).
Obligation to set aside any provision of national law which may conflict with Union law.
Direct effect of directives?
Binding on each Member State to which it is addressed.
Shall leave to the national authorities the choice of form and methods in order to achieve the aims (Art. 288 TFEU)
Can Directives confer rights if they are not implemented or implemented wrong? The deadline for transposing the directive into national law must have expired.
Vertical but not horizontal direct effect.
A directive cannot of itself impose obligations on an individual and cannot therefore be relied on as such against that individual.
Conforming interpretation – indirect effect (consistent interpretation)
Legal protection in the absence of direct effect (C-91/92 Faccini Dori)
Obligation to take into account the underlying EU law, not only the directive (C-62/00 Marks & Spencer)
Obligation to take into account all possibilities offered by national law, incl. national interpretation principles (C397/01 - 403/01, Pfeiffer)
The limits of indirect effect
Law should not be applied contra legem – there is a need for national provisions which can function as a base for conforming interpretation.
No horizontal direct effect through the back door.
🡪 A directive cannot of itself have the effect of determining or aggravating the liability in criminal law of persons who act in contravention of the provisions of that directive (80/86
Kolpinghuis Nijmegen, para 13)
State Liability C-6/90 and 9/90 Francovich and Bonifaci
Directive 80/987 - Protection of employees in the event of the insolvency of the employer.
Wage claims on employers who were bankrupt.
The directive was not implemented at all in Italy.
The state must comply with the provisions on wage guarantees in the directive (direct effect)?
The provisions of the Directive were not unconditional – it could not be concluded how the State was liable for payment.
🡪 No direct effect
🡪 However: the principle whereby a State must be liable for loss and damage caused to individuals by breaches of Community law for which the State can be held responsible is inherent in the system of the Treaty.
Three conditions - liability
The rule of Union law breached is intended to confer rights upon individuals.
The breach is sufficiently serious.
There is a direct causal link between the breach and the damage sustained by the individuals.
EU Law Book 2🡪7
International agreements and EU Law
Direct effect and consistent interpretation
C-176/12, Association de médiation sociale
AMS = Association participating in the implementation of social mediation measures and measures for the prevention of crime in the city of Marseille (France)
Directive 2002/14 establishing a general framework for informing and consulting employees in the European Community – undertakings employing at least 50 employees in any one Member State – requirement of formal representation of the employees • Article 27 CFR: ‘Workers or their representatives must, at the appropriate levels, be guaranteed information and consultation in good time in the cases and under the conditions provided for by Union law and national laws and practices.’
French Law (Code du Travail), the election of staff representatives is obligatory for all establishments with 11 or more employees! – However: huge exceptions – not all employees are calculated French law is not in compliance with EU law
Direct effect – horizontal relation – AMS – Trade Union
Indirect effect?
Contra legem?
Liability?
Conclusion
Article 27 of the Charter of Fundamental Rights of the European Union, by itself or in conjunction with the provisions of Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community, must be interpreted to the effect that, where a national provision implementing that directive, such as Article L. 1111-3 of the French Labour Code, is incompatible with European Union law, that article of the Charter cannot be invoked in a dispute between individuals in order to disapply that national provision.
Can WTO Law be applied between Member States in the EU?
Case 266/81, SIOT, para 12
“In relation to the application of Article V of GATT, it should be noted that, according to Article XXIV (8) thereof, the Community must be regarded as a single customs territory because according to Article 9 of the EEC Treaty it is based on the principle of a customs union. It follows from that that the rules contained in GATT govern only the Community's relations with the other contracting parties and cannot be applied within the Community itself.”
Legal effects in special situations!
Special situations where WTO law will apply, i.e. where the Court of Justice may review the legality EU acts in the light of the WTO rules.
Where the EU measure refers expressly to a precise provision of the agreement (Case 70/87, Fediol)
Where the EU has indended to implement a particular obligation assumed in the context of the WTO (e.g. AntiDumping Agreement). Case C-69/89, Nakajima.
Can a EU Member State violate WTO law?
AG Kokott Opinion in Cae C-66/18, Commission v Hungary (Central European University - 5 March 2020) – By adopting Paragraph 76(1)(a) of Nemzeti felsőoktatásról szóló 2011. évi CCIV. törvény (Law CCIV of 2011 on national higher education), as amended, Hungary infringed Article XVII of the General Agreement on Trade in Services in conjunction with Article 216(2) TFEU and the second sentence of Article 13 and Article 14(3) of the Charter of Fundamental Rights of the European Union.
By adopting Paragraph 76(1)(b) of Law CCIV of 2011, as amended, Hungary infringed Article 16 of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market, Article 49 TFEU in conjunction with Article 54 TFEU, Article XVII of the General Agreement on Trade in Services in conjunction with Article 216(2) TFEU and the second sentence of Article 13 and Article 14(3) of the Charter of Fundamental Rights.
EU Internal market and global market
Outline
EU Internal market and the global market
National regulations (state measures)
Free movement of goods
Mutual recognition/harmonization
Regulatory competition
Tax avoidance
Abuse of law?
Standards (private measures)
Free movements of goods
Harmonized standards (New Approach)
Lack of trust
Democratic threat?
EU internal market and the global market – can increased economic integration create new obstacles to trade?
WTO Trade
🡪Agreements
🡪🡪EU internal market
EU Internal Market
The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance (Article 3 TEU).
The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties (Article 26 TFEU)
The EU four freedoms – Economic constitution? Four Freedoms
Goods, Persons, Services, Capital
The assimilation of the freedoms and exceptions
Similar interpretation:
Free movement of goods
Free movement of some services (market access)
However – different if physical persons move than goods and services
Different approach (national treatment)
Different exceptions
Free movement of capital in general a more sensitive area
Example: Free movements of goods
Article 34 TFEU
Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.
Quantitative restrictions?
Measures having equivalent effect?
Ban on all kinds of trade restrictions, i.e. legislation or other measures
The state must be responsible
Cf. WTO/GATT - non tariff barriers
Extremely wide scope in EU law
Dassonville (8/74)
All trading rules (measures) which are capable of hindering, directly or indirectly, actually or potentially, intra-EU trade
Also non-binding measures (see e.g. 249/81, Buy Irish)
Exceptions – valid national rules/measures
Article 36 TFEU – Public morality – Public policy – Public security – Protection of health and life of humans, animals or plants – Protection of national treasures possessing artistic, historic or archaeological value – Protection of industrial and commercial property – Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.
Cf. Article XX GATT • Two-tiered test • Does the measure fall within one of the exceptions listed in Article XX • If yes, does it satisfy the ”chapeau”? – Not constitute a means of ”arbitrary or unjustifiable discrimination” between countries where the same conditions prevail. – Not constitute a ”disguised restriction on trade
Cassis de Dijon (120/78)
Principle of mutual recognition – Goods lawfully marketed in one state in the EU shall be sold freely in another EU state (presumption)
Discrimination not necessary – Beyond non-discrimination ¨
Rule of reason
Mandatory requirement
Balance (proportionality)
Mandatory requirement developed in EU case law
• The effectiveness of fiscal supervision • The protection of public health • The fairness of commercial transactions • The defence of consumer • Protection of the environment • Protection of working conditions • Protection of cinema as a form of cultural expression • Protection of national or regional socio-cultural characteristics • Maintenance of press diversity • Preventing the risk of seriously undermining the financial balance of the social security system • Protection of fundamental rights
Mutual recognition or harmonization?
Negative and positive integration
Regulatory competition (Cassis de Dijon/C-212/97 Centros)
Race to the bottom?
Only a presumption
– Recognised public interests (mandatory requirements – consumer protection, safety)
– Need for harmonization
– New EU legislation, directives and regulations (positive integration)
Ex. Directive 2014/33/EU of the European Parliament and of the Council of 26 February 2014 on the harmonization of the laws of the Member States relating to lifts and safety components for lifts
What about tax competition? - powers of the EU
Article 114
Save where otherwise provided in the Treaties, the following provisions shall apply for the achievement of the objectives set out in Article 26. The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.
Paragraph 1 shall not apply to fiscal provisions, to those relating to the free movement of persons nor to those relating to the rights and interests of employed persons.
Article 115
Without prejudice to Article 114, the Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, issue directives for the approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the internal market.
Article 113
The Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market and to avoid distortion of competition.
Internal market – two approaches
Regulatory competition
Neoliberalism
Make use of differences between national regulations
Cassis de Dijon/Centros
US/Delaware effect
Facilitated by digitalization
Competition neutrality
Ordo liberalism
A level playing field
Increased harmonization
Extensive competition policy (state aids)
Abuse of law: C-115/16, N Luxembourg 1; 116/16 and C-117/16, T Danmark and Y Denmark Aps
ATAD (Dir 2016/1164)
Standards – regulating the market through voluntary measures?
Non-binding (voluntary nature)
Private
For sale (not public rules)
Technical specifications – Toys – Lifts – Data protection, AI
Standardization bodies, examples – ISO (global level) – CEN (European level) – DIN (National level, Germany), cf Standards Australia
Regulation (EU) No 1025/2012 on standardisation
‘standard’ means a technical specification, adopted by a recognised standardisation body, for repeated or continuous application, with which compliance is not compulsory, and which is one of the following:
‘international standard’ means a standard adopted by an international standardisation body;
‘European standard’ means a standard adopted by a European standardisation organisation;
‘harmonised standard’ means a European standard adopted on the basis of a request made by the Commission for the application of Union harmonisation legislation;
‘national standard’ means a standard adopted by a national standardisation body;
The consequences of standards
Trade barriers🡪 National standards
Trade facilitators 🡪 International standards 🡪European standards
Trade promoters 🡪 Harmonized standards
Trade barriers – examples
Article 34 TFEU and national standards
– 45/87 Commission v. Ireland 🡪 Standard made compulsory in public procurement
– C-222/06 Commission v. Belgium 🡪 Public standardization body
– C-171/11 Fra.bo 🡪De facto binding standard
“Article [34 FFEU] must be interpreted as meaning that it applies to standardisation and certification activities of a private-law body, where the national legislation considers the products certified by that body to be compliant with national law and that has the effect of restricting the marketing of products which are not certified by that body.”
Trade facilitation/promotion
Potential value in International and European standards – Harmonised technical specifications ready to make use of
New Approach – harmonised standards – use of the full potential
– Framework directives – less details – less political resistance
– New technological developments
– Flexibility?
Standards as steering instruments – market integration tools in practice (presumption of conformity but often the only alternative)
Standards become the most important market integration tool in practice?
Increased importance of standards – success/dilemma?
Blind trust?
C-6/05 Medipac, C-489/06 Commission v Greece
Medical devices with CE mark
Tenders for supply of sutures – health/safety
Cannot be rejected on grounds of public health
Need for higher level of trust?
C-613/14, James Elliott (more legal control – harmonized standards part of EU law)
Sensitive areas – evolution of EU law
Financial services
Data protection
Public procurement
Democratic threat (need for more political control)?
Problems today
Slow process – high demand for new standards
New standards are made, but not officially adopted (reference not published in OJEU)
Judicialization of standards (James Elliott Case) – Standardization bodies worried
Risk that privately made voluntary standards will be less useful – back to detailed public rules?
The advantage of the market-driven nature of standards disappears?
Commission response (one of them)
Brussels, 22.11.2018 COM(2018) 764 final
Harmonized standards: Enhancing transparency and legal certainty for a fully functioning Single Market
The Commission must pay particular attention to the content of the harmonized standards (James Elliot, C-613/14).
->Creating framework of consultants
The Commission will better prioritize standard setting to respond in a timely way to market and users' needs.
The Commission will continue to work with all relevant partners to ensure the continued success of European standardization as a cornerstone of a fully functioning Single Market
External aspects of the internal market – concluding remarks
EU internal market and the global market – integration gap!
Movement between a Member State and a third country – extension of the internal market by agreements
Extensive harmonization – harmonized standards (European/international?)
EEA
WTO (GATT/GATS) – mainly goods and services
Brexit?
READ EU CH 14 and PDF
European and international tax law policy
Outline
What is international and EU tax law?
Sources of law and main stakeholders
Direct v indirect taxes
Harmonization of VAT in the EU
Customs
What is international and European tax law?
International tax law- various meanings
Internal international tax rules
Comparative tax law
Double tax treaties law
WTO law
EU tax law
Source of law and main stakeholders – international (historical) perspective
As early as 1920s – up rise in cross-border economic activity – emergence of multinationals
Issue of juridical double taxation (comparable taxes imposed by two or more states on the same taxpayer, the same subject matter and the same period of time)
Bilateral agreements by countries
Works by the League of Nations -> OEEC->OECD
1963 OECD Model Tax Convention on income and capital (current version-2017)
OECD Transfer Pricing Guidelines
Source of law and main stakeholders – EU perspective
Tax sovereignty as one of the fundamental components of national sovereignty
Membership in the EU and Internal Market
EU primary law:
Internal Market (article 26 TFEU)
Customs union (article 4 TEU, articles 28-32 TFEU)
Free circulation within the EU (article 29 TFEU)
Prohibition of quantitative restrictions (articles 34-35 TFEU)
Article 113 TFEU- mandate for the EU to harmonize turnover taxes, excise duties and other forms of indirect taxation
Article 110 TFEU – prohibition of discriminatory taxation
Source of law and main stakeholders – EU perspective (2)
No specific provision for direct taxation
Article 115 TFEU used as a basis for harmonization (yet secondary law on indirect taxation very limited):
» Parent-Subsidiary Directive, Merger Directive, Interest-Royalty Directive
» Mutual assistance, recovery of tax claims, ATADI and II
Prohibition of state aid (article 107 TFEU).
Fundamental freedoms provisions
» A right of circulation
» Prohibition of discrimination on grounds of nationality or origin
Positive v. negative integration
Direct v indirect taxes
A matter of passing the tax on
Oxford English Dictionary: “(indirect tax is) not levied directly upon the person on whom it ultimately falls, but charged in some other way, especially upon the production or importation of articles of use or consumption, the price of which is thereby augmented to the consumer, who thus pays the tax in the form of increased price.”
Questioned by the economists but still relevant
The legal character of the tax (possibility of shifting required)
The destination principle
(GATT/WTO Articles II, III, XVI)
General Agreement on Trade and Tariffs
Article XVI:4 of the GATT
… Contracting parties shall cease to grant either directly or indirectly any form of subsidy on the export of any product …[which] results in the sale of such product for export at a price lower than the comparable price charged for the like product to buyers in the domestic market.
An interpretative not to that Article:
The exemption of an exported product from duties or taxes borne by the like product when destined for domestic consumption, or the remission of such duties or taxes in amounts not in excess of those which have accrued, shall not be deemed to be a subsidy.
Types of indirect taxes
General (e.g. VAT, sales taxes) v. specific (e.g. excise duties, customs, insurance premium tax, financial services tax)
Systems of levying
Single v multi stage indirect taxes
Cumulative v non-cumulative (neutral) indirect taxes
Systems of levying turnover taxes
Single-stage levies
Manufacturer’s tax
Wholesale tax
Retail sales tax (final sales to private customers)
Multiple-stage levies
Cumulative all-stage levies
Non-cumulative all-stage levies (VAT)
Cumulative dual-stage levies
Non-cumulative dual-stage levies
VAT- General indirect tax on consumption
VAT is not just a name
It defines the legal character
» a description of the features of a tax which have consequences in iure
legislative intent
guide for interpretation
Neutrality
Internal Neutrality
Legal
Competition
Economic
External Neutrality
Consumption tax
Consumption:
expenditure
distinguish between consumptive and productive expenditure
Mitigation of starting-point consumption = expenditure
second-hand goods, art etc.
reversion of transactions
real estate
Importation/exportation
expenditure or compensatory levy?
General tax
Covers all private expenditure – Goods and services – Prevents substitution – Difficulties in taxing services?
Equality requirement – Should be measurable – Equal for identical goods or services – Compensatory tax upon importation?
The history of harmonization of VAT
1957 The Rome Treaty: ”The Commission shall consider in what way the law of the various Member States concerning turnover taxes, excise duties and other forms of indirect taxation, including compensatory measures applying to exchanges between Member States, can be harmonized in the interest of the Common Market” (Art. 99 TEC)
The reach of VAT
166 countries operate VAT
VAT is the main consumption tax both in terms of revenue and geographical coverage
EU – harmonized VAT system
New Zealand, Australia – GST
Custom duties
By the very nature an international topic:
International legal context
Local rules, procedures and provisions
International historical perspective – A need to liberate trade after the Second World War (high tariffs, recession)
1945 – the USA proposed ITO (never created)
1947 – signing of the GATT (in force on 1 January 1948)
January, 1995 – establishment of the WTO (164 members); transformation of GATT 1947 into GATT 1994
Custom duties- international perspective
WTO:
Annex 1A Multilateral Agreements on Trade in Goods
» GATT 1994
» Agreement on Implementation of Article VII of the GATT 1994 (the Valuation Agreement)
» Agreement of Rules of Origin
The Customs Cooperation Council (World Customs Organization, WCO)
International Convention on the Harmonized Commodity Description and Coding System (entered into force in 1988, known as ‘HS Convention’) the basis for the Community Nomenclature (CN)
The ATA system:Customs Convention on the A.T.A. Carnet for the temporary admission of goods (A.T.A. Convention) (1961)
The Istanbul Convention on Temporary Admission (1990)
International Convention on the Simplification and Harmonization of Customs procedures (the Kyoto Convention), revised version entered into force on 3 February 2006 (the revised Kyoto Convention)
Custom duties – EU perspective
A precondition for the establishment of a common market
Completed on 1 July 1968:
common customs tariff
the abolition of customs duties and quantitative restrictions between the Member States
1 January 1993 – the establishment of the internal market
Customs Union – secondary EU legislation
Regulations:
Union Customs Code (UCC), entered into force 1 May 2016 (Regulation (EU) No 952/2013)
The UCC Delegated Act (DAUCC) (Commission Delegated Regulation (EU) 2015/2446)
The UCC Implemented Act (IAUCC) (Commission Implementing Regulation (EU) 2015/2447)
The Commission Delegated Regulation (EU) 2016/341 of 17 December 2015, in force from 1 May 2016 – transitional measures
National legislation:
National Customs Act
EU legislative and institutional framework
European Economic Area (EEA)
The European Free Trade Association (EFTA) established in 1960 (Iceland, Norway, Liechtenstein and Switzerland) (the EFTA Convention)
The Agreement on the European Economic Area (EEAA) entered into force on 1 January 1994
EEA brings 3 of 4 EFTA countries into a single market with the EU (no customs duties and CEE between the Contracting Parties)
Switzerland has bilateral agreements with the EU (the FTA of 1972)
European Union–Turkey Customs Union
Came into force on 31 December 1995
Customs Union vs Free Trade Agreement
Most-favoured-nation (MFN): treating other people equally. Under the WTO agreements, countries cannot normally discriminate between their trading partners. Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members.
GATT: Article XXIV:5
Accordingly, the provisions of this Agreement shall not prevent, as between the territories of contracting parties, the formation of a customs union or of a free-trade area […]
Customs Union vs Free Trade Agreement (2)
GATT: Article XXIV:8a • A customs union shall be understood to mean the substitution of a single customs territory for two or more customs territories, so that:
duties and other restrictive regulations of commerce […] are eliminated with respect to substantially all the trade between the constituent territories of the union or at least with respect to substantially all the trade in products originating in such territories, and,
Subject to […] substantially the same duties and other regulations of commerce are applied by each of the members of the union to the trade of territories not included in the union
Article 28 TFEU: The Union shall comprise a customs union […]
Customs Union vs Free Trade Agreement (3)
GATT: Article XXIV:8b
A free-trade area shall be understood to mean a group of two or more customs territories in which the duties and other restrictive regulations of commerce (except, where necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated on substantially all the trade between the constituent territories in products originating in such territories.
EU FTA examples: Switzerland, Norway, South Africa, Korea & Mexico
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European and international competition policy
Outline
Competition law and competition policy
Lack of global order
Objectives and key concepts
The European market and the global market
Need for a European industrial policy?
Private Measures Distorting Competition
Article 101 TFEU 🡪🡨 Article 102 TFEU
Merger controls
Other prohibitions on state measures distorting competition in the Internal Market
Public Monopolies
Public Undertakings
State Aid
Public Procurement
No global order!
WTO is a global trade order, but does not include any general competition regulation.
Most industrialized countries have their own competition regulations (currently about 100 countries) - China and India adopted competition laws in 2008
Development of competition law concepts and principles have taken place mainly:
In United States (Sherman Act in 1890, the Clayton Act 1914) – antitrust law,
In German competition law after the second world war (influenced by Ordo liberalism) and
In the EU which started with the Treaty of Rome in 1957 (EEC).
The EU's system has become a model for the design of national competition laws in both Western Europe and Central and Eastern European countries that switched over to a market economy.
Economic objectives of competition law
Free competition or effective competition
Restrictive elements exist in virtually all markets
Workable competition is enough
Active competition or potential competition
Factual monopoly, oligopoly, duopoly; the degree of concentration in the relevant market is important
Protecting consumers and/or competitors?
Economic analysis, but in the end a legal assessment
EU - specific purposes - market integration
Combatting corruption – increase public confidence?
Article 101 TFEU
1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which …
2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void.
Market definition – always relevant!
In order to determine whether there is an unlawful restriction on competition, it is necessary to define the relevant market.
The product market - all products or services which in the consumers' eyes are interchangeable with respect to their properties, price, use, etc. (Are bananas and apples interchangeable?)
The geographical market - the area in which the undertakings concerned mainly provide products or services (the world, the EU, Sweden, Stockholm, Malmö?)
Horizontal and vertical agreements
Different levels in the production and distribution chain:
producers
wholesalers
retailers
Agreements between undertakings at the same level in the production or distribution chain is horizontal (horizontal restrictions of competition such as market sharing or price-fixing - cartels)
Agreements between undertakings at a different level in the production or distribution chain are vertical (backward or forward - upstream or downstream; refusal to supply, price discrimination etc.)
Key concept:
1. Undertaking
Any entity engaged in an economic activity, regardless of its form.
Companies, trade associations, individuals (opera singer!)
But must be independent - not:
Companies within the same group - the principle of economic unit (single economic unit)
Agents / Representatives
However, applicable to jointly controlled joint ventures (separate economic unit)
Agreements
At least two parties must be in agreement
Binding written agreement is not necessary – a contract can be non-binding and oral – consensus to act in a certain manner
Unilateral actions fall outside Article 101 TFEU (see Article 102)
Horizontal – anti-competitive agreement between competitors is easy to show
Vertical – anti-competitive agreement more difficult to prove
Often difficult questions when it comes to evidence
Concerted practice
Collusion that fall short of agreement – behaviour influenced by exchange of information
Independent parallel conduct is not a restriction of competition
Parallel conduct is evidence of concerted practice when this is the only reasonable explanation for the conduct – indirect evidence (C-89/85 Wood Pulp)
Example – similar and simultaneous price changes across the EU where markets are known to operate nationally
Object or effect
"Which have as their object or effect the prevention, restriction or distortion of competition"
alternative criteria
If an anti-competitive object can be detected the effect does not have to be demonstrated.
The effect should be seen in relation to the market in which the agreement is implemented.
The consequence must be that that competition develops in a different way than if the conduct or agreement would not have occurred (one has to establish a causal link).
Single infringement – a participant is responsible for the entirety of the anti-competitive conduct (fines can be different)
Leniency Programme – how to discover a violation
Gossiping?
Disclose information of its own and other’s participation in an infringement
Important to be the first to tell …
Concerns only violations of the prohibition on cartels
Article 101.3 TFEU - exceptions
3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
any agreement or category of agreements between undertakings,
any decision or category of decisions by associations of undertakings,
any concerted practice or category of concerted practices, which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:
(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;
(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
Positive effects on competition?
Positive effects on competition are balanced against restrictions on competition
Test composed of four (cumulative) parts
Contribute to improving the production or distribution (rationalization)
Consumers must receive a fair share of the benefits
Entails only restrictions which are necessary (proportionality) – The effect cannot be that the parties eliminate competition in a substantial way
The benefits outweigh the harm to competition.
Procedure – Block exemptions (permitted contract terms) – Self-assessment (economic analysis) – Notifications? (prior notification / approval) is no longer possible since 2003.
Article 102 TFEU – Abuse of a dominant position
Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States. Such abuse may, in particular, consist in …
Key concepts:
Dominant position
When a company or group of companies enjoys an economic position of strength, which makes it possible for the company to prevent the maintenance of effective competition on the relevant market by giving it to a considerable extent, to act independently of its competitors and customers and ultimately of consumers.
Market share: 50% presumption (30-40% may suffice)
Additional factors?
Relevant market
Product market
Ex. spare parts markets
Geographic market
Sweden, parts of the EU, the EU?
Abuse
The ban is intended to prevent action by the dominant undertaking that hinder the competition that still exists on the market is maintained and reinforced
Typical abuses
Overpricing (so-called monopoly prices)
Underpricing (predatory pricing)
Exclusive terms (in for instance a resale or licence agreement)
Tying and bundling
Additional obligations which are not inherent in the nature of the contract either by their nature or according to commercial usage (buy unwanted item in order to buy wanted item)
Tetra Pak II: Cardboard packaging - packaging machines
Master food: ice cream boxes – ice cream – Microsoft: Windows - Windows Media Player
Refusal to sell
Refusal to license
Enforcement - Heavy fines!
Should not exceed 10 per cent of the undertaking’s total turnover in the preceding business year (the whole company group is counted)
Example:
– Microsoft – 497 million euro
– Daimler – More than 1 billion euro (2016)
Important circumstances:
– Type of infringement
– Extent (scope in time)
– Significance
– Impact on competition
– The role of the company in the infringement
European companies in the global market?
Weak global competition policy
Competitiveness of the Union’s industry
Article 173 TFEU - European Industrial Policy
– Common responsibility
– Real actions is dependent on concrete measures from individual Member States
– The initiatives stay with the Member States
But: National measures must comply with the ban on State Aid
Article 107 TFEU prohibits any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods, insofar as it affects trade between Member States.
Relevant market – the EU internal market
Exceptions to the State Aid ban
Article 107(3) TFEU + Guidelines and frameworks
Article107(3)(b) – Project of common European interest
IPCEI Communication
COMMISSION REGULATION (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (GBER)
State intervention allowed if a “market failure” (relevant market?)
Conflicting objectives and Competence mismatch?
Need for more balanced EU powers?
Or different use of present powers
Industrial policy is governed through the back door?
Is a more coherent/visible European industrial policy preferable?
No global level playing field
WTO Subsidies and countervailing agreement (SCM) not enough
Trade strategies have to adapt to new realities
Geopolitical changes.
A New Industrial Strategy for Europe
WHITE PAPER on levelling the playing field as regards foreign subsidies
CHAPTER EU 20 – 22
Intellectual property - National, European, International
Types of Intellectual Property
Copyright
Copyright
Neighbouring rights
Industrial property
Trade Marks and Company names
Geographical indications
Patent
Design Rights/Industrial Design
Plant Variety Rights • etc
Main characteristics
Property Rights
Territorial nature
Transferable Exclusionary rights
But there are exceptions and limitations
It is a negative Right – the possibility to prohibit other from using
Enforceable by the owner or state in civil or criminal proceedings.
Balancing the rights against third parties interest and interest of the public in general
Main features of IPR
The subject matter to which the right is attached
Requirements (criteria for protection)
Exclusive right
Exclusions from protection
Limitations of the exclusive right
Ownership
Duration
Remedies
IP – Subject matter
Patents
Protects inventions, i.e. new solutions to technical problems
Trademarks
Protects distinctive marks and trade names
Design
Protects design that appears to be new and has individual character
Copyright
Protects artistic and literary creations that appears to be original
IP – Criteria for creation
Patents
Registration
Trademarks
Registration (and use)
Design
Registration (and use)
Copyright
“In the Creation”
IP – Duration
Patents
20 years
Design
25 years (5 x 5) •
Copyright
70 years from the death of the creator
Trademarks
10 years to No limit…
IP – Exceptions and limitations
Duration
Qualification requirement
A use requirement
Fair use – private use
Territoriality
Exhaustion of rights
Alternative protection
Trade secrets
Competition Law
Unfair marketing practice
“Free” strategies
Intellectual Property and some areas of conflict
File Sharing
Globalization
Pharmaceutical Patents and Access to Essential Medicines
Traditional Cultural Expressions and copyright
Scientific information and copyright
Fourth Industrial revolution and Artificial Intelligence
Counterfeiting and Piracy
Ethics and morality
Fundamental rights
Sustainability
Fundamental rights status of IP?
Article 27 UDHR compare with Article 15(1)(c) ICESCR
(1) ”Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits.”
(2) ”Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.”
Article 17 UDHR
(1) ”Everyone has the right to own property alone as well as in association with others.”
(2) ”No one shall be arbitrarily deprived of his property.”
Fundamental rights status of IP?
Article 17(2) of the EU Charter of Fundamental Rights “Intellectual property shall be protected.”
Article 1 of Protocol No. 1 to the European Convention on Human Rights Protection of property ”
(1) Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
(2) The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.
C-469/16 Funke Medien
• Para 64: “[…] freedom of information and freedom of the press, enshrined in Article 11 of the Charter, are not capable of justifying, beyond the exceptions or limitations provided for in Article 5(2) and (3) of Directive 2001/29, a derogation from the author’s exclusive rights of reproduction and of communication to the public, referred to in Article 2(a) and Article 3(1) of that directive respectively.”
IPR – a national area of law? A Scandinavian perspective
Territorial nature but:
Nordic and European harmonisation
World Conventions– Berne (Copyright) and Paris (Industrial Property) and TRIPS
EU Trade Mark and Community Design – Rights that covers the European Union
News in pipeline: EU Unitary patent
The Court of Justice of the European Union (CJEU) is the chief judicial authority of the European Union. Ensuring EU law is interpreted and applied in the same way in every EU country
“The World Intellectual Property Organization (WIPO) is a WIPO is a global forum for intellectual property services, policy, information and cooperation. It a self-funded agency of the UN. It is dedicated to developing a balanced and effective international intellectual property (IP) system.”*
Location: Geneva, Switzerland
Established: by the WIPO Convention in 1967
Membership: 193 countries on August 2020
“The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world ’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.”*
Location: Geneva, Switzerland
Established: 1 January 1995
Created by: Uruguay Round negotiations (1986 -94)
Membership: 164 countries since 29 July 2016 (U.S. 1995)
“The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world ’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.”* Location: Geneva, Switzerland Established: 1 January 1995 Created by: Uruguay Round negotiations (1986 -94) Membership: 164 countries since 29 July 2016 (U.S. 1995)
Paris Convention for the Protection of Industrial Property, 1883 •National treatment, •Right of priority, •Common rules that all Contracting States must follow
Berne Convention for the protection of Literary and Artistic Works, 1886 • The principle of National Treatment • The principle of minimum rights • Protection must not be conditional upon any formalities • Protection is independent of the existence of protection in the country of origin of the work • Moral rights - the right to claim authorship of the work and the right to object to any mutilation, deformation or other modification of, or other derogatory action in relation to, the work that would be prejudicial to the author's honour or reputation.
TRIPS Agreement
• National Treatment (art 3) • Most-Favoured-Nation Treatment (art 4) • Priority (derived from the Paris convention) • Minimum standards for protection
Copyright
• Berne Convention • Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations • TRIPS Agreement • WIPO Copyright Treaty (WCT) 1996 • WIPO Performances and Phonograms Treaty (WPPT) 1996
EU Copyright Law – partly harmonized
• Software Directive, 1991 • Rental and Lending Directive, 1992 • Satellite and Cable Directive 1993 • Term Directive 1993 • Database Directive 1996 • E-Commerce Directive 2000 • Information Society Directive 2001 • Resale Right Directive 2001 • Enforcement Directive 2004 • Term Amendment Directive 2011 • Orphan Works Directive 2012 • Collective Rights Management Directive 2014 • Digital Single Market Directive 2019
Patent Law
• Paris Convention
• TRIPS Agreement
• Patent Cooperation Treaty (PCT) International search and preliminary examination by one of the International Searching Authorities (novelty and inventive step)
• European Patent Convention (EPC) Search, examination and grant of a European patent by European Patent Office (EPO) – one application and a bundle of national patents
Patent – EU Law
• Directive on biotechnological inventions, 1998
• Unitary Patent (coming?) A patent granted by the EPO under the provisions of the European Patent Convention to which unitary effect for the territory of the 25? Participating states is given after grant.
Trade Marks • Paris Convention • TRIPS Agreement • Madrid System - Madrid Agreement (1891) - Madrid Protocol (1989)
Trade Marks – EU Law
The Trademark Directive; First Council Directive 89/104/EEC to approximate the laws of the Member States relating to trade marks -> Directive 2008/95/EC (Codified version). -> Directive (EU) 2015/2436, entered into force 2019
The Trademark Regulation; Council Regulation 40/94 on the Community Trade Mark –> Regulation 207/2009 on the Community trade mark (codified version). Amended by Regulation (EU) 2015/2424
Protection for Trade Marks in EU
Domestic application for registered trade mark in one member state based on national law harmonised by the Trademark Directive.
Application for registered trade mark in the union (Union Trade Mark) at EUIPO, Alicante, Spain based on the Trade Mark Regulation
International application to WIPO based on the Madrid Agreement
Related Legislation
Council Directive84/450/EEC concerning misleading and comparative advertising -> Directive 2006/114/EC
Directive 2004/48EC of 29 April 2004,on the enforcement of intellectual property rights
Design
Paris Convention
TRIPS Agreement
Locarno Agreement 🡪The Agreement establishing an International Classification for Industrial Designs. It is applied by 54 Contracting Parties.
Hague Agreement • The Geneva Act of July 2, 1999 • The Hague Act of November 28, 1960 • Single application, one language, and one set of fees • Formal examination by International Bureau of WIPO
EU Design Law • Directive 98/71/EC of 13 October 1998 on the legal protection of design (DD) • Council Regulation (EC) 6/2002 of 12 December 2001 on Community designs (CDR) • The recitals can be referred to when interpreting the substantive provisions of the legislations, but do not have the force of law!
Protection for design i EU • Domestic application for registered design in one member state based on national law harmonised by the Design Directive. • Application for registered design in the community (Community Design) at EUIPO, Alicante, Spain based on the Design Regulation • Unregistered design in the community based on the Design Regulation • International application to WIPO based on the Hague Agreement to which EU acceded 2008
WTO CH 17
EU External Policy and Brexit
EU external competences in trade matters
Article 3 TFEU
1. The Union shall have exclusive competence in the following areas: (a) customs union; (b) the establishing of the competition rules necessary for the functioning of the internal market; (c) monetary policy for the Member States whose currency is the euro; (d) the conservation of marine biological resources under the common fisheries policy; (e) common commercial policy.
2. The Union shall also have exclusive competence for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence, or in so far as its conclusion may affect common rules or alter their scope.
Article 207 TFEU
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….
The evolving scope of the Common Commercial Policy (CCP)
Article 113 EEC Treaty: … with regard to…the conclusion of tariff and trade agreements…
🡪Article 133 EC Treaty added: …on services and intellectual property… concluded by unanimity in so far not covered by paragraph1 …
🡪🡪Article 133 EC Treaty (modified) defined cultural and audio- visual services, educational services, social and human health services as shared competences.
🡪🡪🡪Article 207(1) TFEU: … with regard to … the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment…
“Necessary to enable the Union to exercise its internal competence, or in so far as its conclusion may affect common rules or alter their scope”
ERTA-doctrine
Transport policy (transport by road and rail, sea, air) with the exception of inland waterways
Competition law, public enterprises, state aid
Technical regulations
Public procurement
Customs cooperation
Environment, public health and consumer protection
Movement of persons and recognition of professional qualifications
Opinion 2/15 (conclusion of the FTA with Singapore) of 16 May 2017
The Free Trade Agreement between the European Union and the Republic of Singapore falls within the exclusive competence of the European Union, with the exception of the following provisions, which fall within a competence shared between the European Union and the Member States:
the provisions of Section A (Investment Protection) of Chapter 9 (Investment) of that agreement, in so far as they relate to non-direct investment between the European Union and the Republic of Singapore;
the provisions of Section B (Investor-State Dispute Settlement) of Chapter 9; and
the provisions of Chapters 1 (Objectives and General Definitions), 14 (Transparency), 15 (Dispute Settlement between the Parties), 16 (Mediation Mechanism) and 17 (Institutional, General and Final Provisions) of that agreement, in so far as those provisions relate to the provisions of Chapter 9 and to the extent that the latter fall within a competence shared between the European Union and the Member States.
Geopolitical differences and flexibility
EU-EFTA relations – very close relations (geographic proximity)
Decolonialization (Association of ACP countries - African, Caribbean, and Pacific countries - Lomé Convention,1975).
Focus on the Mediterranean Sea (Union for the Mediterranean) and improve relations to South and Central America
Eastern Partnership (before Enlargement)
Now – Improve relations to Asia – More ambitious trade relations between industrialized countries
Ongoing negotiation document at Canvas
Different kinds of EU agreements
Free Trade Agreements (FTAs)
Association Agreements – “non-European countries and territories which have special relations with Denmark, France, the Netherlands and the United Kingdom” (Article 198 TFEU), also Ukraine
Customs union agreements (Turkey)
European Economic Area Agreement (EEA)
Economic Partnership Agreements (EPAs) – The Cotonou Partnership Agreement (ACP countries), also Japan (2019)
Deep and Comprehensive Free Trade Agreements (Ukraine, Canada)
Competence problems: Mixed agreements – Exclusive and shared competence
EU as a trade negotiator
The European Commission recommends the opening of negotiation and (after authorization) is in charge of the negotiations.
Decision taking by the Council on the opening of negotiations the signing (provisional application) and conclusion of agreements. – A mixed agreement must also be signed by the Member States
The conclusion of the agreement requires consent (in some cases consultation) of the European Parliament. – A mixed agreement may also require consent of national parliaments
European Economic Area (EEA) (EFTA except Switzerland)
Economic area (internal market) governed by the same rules
Four freedoms
Common competition policy
EU acquis – Rule-taker
EFTA Court and EFTA Surveillance Authority
Financial contribution to the EU
Not a customs union
No common commercial policy
EU-Switzerland
Original EU-Swiss Agreement (identical text used for all EU agreements with EFTA States) signed in 1972 (after completion of EU customs union).
Additional agreements signed in 1999, including free movement of persons, technical trade barriers, public procurement, agriculture and air and land transport (more additional agreements in 2004 and 2010)
At present more than 100 bilateral agreements with the EU!
Competition policy obligations (but not Common competition policy)
Financial contribution to the EU
Ukraine
Ukraine–European Union Association Agreement (2017) – Including a Deep and Comprehensive Free Trade Area (DCFTA)
Political and economic association
Adaption to EU technical and consumer standards
Selected EU acquis (extended EU harmonization, e.g. competition, intellectual property rights, energy policy)
Defence/security
CETA – 30 Chapters and more than 50 Annexes/Schedules 🡪EU and Canada
What was Brexit about?
What did people really vote for? Early statements: “We will honour the result of the 2016 referendum and work with parliament to deliver a deal that ensures we leave the European Union" (the Department for Exiting the EU 2019)
May - Brexit means Brexit “We are not leaving the European Union only to give up control of immigration all over again … And we are not leaving only to return to the jurisdiction of the European Court of Justice. That’s not going to happen. We are leaving to become, once more, a fully sovereign and independent country.” (Theresa May in October 2016)
But Brexit can be anything – hard, soft etc
Withdrawal (Article 50 TEU)
1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. …………………
Politics vs (Legal) Reality
Article 50 TEU sets out the procedure to be followed
Brussels’ legalistic approach?
– Divorce first – future relationship second
“We will negotiate the terms of a new deal before we start any legal process to leave" (The official Brexit campaign in 2016)
– No cherry picking
Indivisibility of the four freedoms
– A Customs Union needs an external border (The Irish back-stop problem)
Exit-negotiations mean exchanges of serious proposals
Legal framework – no political horse-trading
Any proposal must be in compliance with EU law
Chequers proposal (July 2018) not realistic
Article 218.11 TFEU- Court of Justice of the EU – A Member State, the European Parliament, the Council or the Commission may obtain the opinion of the Court of Justice as to whether an agreement envisaged is compatible with the Treaties. Where the opinion of the Court is adverse, the agreement envisaged may not enter into force unless it is amended or the Treaties are revised.
Future relationship?
Von der Leyen: “Without free movement of people, you can’t have free movement of capital and goods. Without a level playing field on environment, labor and state aid, you cannot have the highest quality access to the world’s largest single market. The more divergence there is, the more distant the partnership will be.” (2020-01-08)
Barnier: We will insist on making our economic partnership subject to a level playing field on environmental and social standards, state aid and tax matters” (no race to the bottom). (2020-01-09)
New Trade Agreement?
The Political Declaration provides:
– this declaration establishes the parameters of an ambitious, broad, deep and flexible partnership across trade and economic cooperation with a comprehensive and balanced Free Trade Agreement at its core, law enforcement and criminal justice, foreign policy, security and defence and wider areas of cooperation.
– The economic partnership should through a Free Trade Agreement ensure no tariffs, fees, charges or quantitative restrictions across all sectors with appropriate and modern accompanying rules of origin, and with ambitious customs arrangements that are in line with the Parties’ objectives and principles above.
Level playing field (Political Declaration)
“Given the Union and the United Kingdom’s geographic proximity and economic interdependence, the future relationship must ensure open and fair competition, encompassing robust commitments to ensure a level playing field. The precise nature of commitments should be commensurate with the scope and depth of the future relationship and the economic connectedness of the Parties. These commitments should prevent distortions of trade and unfair competitive advantages. To that end, the Parties should uphold the common high standards applicable in the Union and the United Kingdom at the end of the transition period in the areas of state aid, competition, social and employment standards, environment, climate change, and relevant tax matters.”
Different approaches
EU insists on ”robust commitments ensuring a level playing field for open and fair competition” – Competition rules – State aid rules – Taxation – Environmental standards etc
UK insists on sectoral agreements and refuses any institutionalized relationship and in particular a role for the EU Court of Justice (Cf Switzerland – the Withdrawal Agreement has however a dispute settlement system).
Outlook
The transition period cannot be extended?
Possible to agree on level playing field (fisheries also an obstacle)?
Northern Ireland – recent developments
No EU Deal? US Deal?
WTO – Customs duties and quotas – Lack of trust – A new agreement will take long time to conclude? Canada 8 years
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