Competence of the European Community to Conclude International Agreements concerning Services and the Protection of Intellectual Property, Re (Opinion 1/94)

JurisdictionEuropean Union
CourtEuropean Court of Justice
Date15 November 1994
Court of Justice of the European Communities.

(Rodríguez Iglesias, President; Joliet, Rapporteur; Schockweiler, Kapteyn and Gulmann, Presidents of Chambers; Mancini, Kakouris, Moitinho de Almeida, Murray, Edward and La Pergola, Judges; Jacobs, First Advocate-General; Lenz, Tesauro, Cosmas, Léger and Elmer, Advocates-General1)

Re the Competence of the European Community to Conclude International Agreements concerning Services and the Protection of Intellectual Property (Opinion 1/94)

Economics, trade and finance — World Trade Organization — Constituent treaties — GATT Uruguay Round — European Community — Competence to conclude agreements — Whether vested in Community or the Member States

International organizations — GATT — World Trade Organization — Agreements establishing World Trade Organization — Integrated nature of agreements — Dispute settlement mechanisms

Treaties — Conclusion — Competence to conclude treaties — European Community — Euratom — European Coal and Steel Community — Division between competence of Communities and competence of Member States to conclude treaties — The law of the European Communities

Summary: The facts:—The gatt Uruguay Round of Multilateral Trade Negotiations (1986–1993) was conducted on behalf of the Community and the Member States by the Commission of the European Communities as sole negotiator, acting on the authority and in accordance with instructions from the Council. The original negotiating mandate, contained in the Punta del Este Ministerial Declaration of 20 September 1986, was granted without prejudice to the eventual division of competences between the Community and the Member States as to the conclusion of agreements arising out of the Uruguay Round. The negotiations were concluded in December 1993 and the Final Act of the Uruguay Round, together with the Agreement Establishing the World Trade Organization (the ‘WTO Agreement’), was opened for signature in April 1994 by the Community and 110 States, including all of the Member States of the European Communities.

The WTO Agreement provided for a common institutional framework for the conduct of international trade between WTO Members in a new

international economic organization. The Multilateral Trade Agreements, listed in Annexes 1, 2 and 3 to the WTO Agreement, formed integral parts of that Agreement and included the Multilateral Agreements on Trade in Goods (including an updated version of the 1947 General Agreement on Tariffs and Trade and associated legal instruments), the General Agreement on Trade in Services (‘gats’) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (‘trips’).

Under Article 2282 of the Treaty of Rome, as amended by the Treaty on European Union (the ‘EC Treaty’), the Council was the competent institution to conclude all international agreements entered into by the Community after consulting the European Parliament, or where the envisaged agreement establishes a specific institutional framework, or has important budgetary implications for the Community with the assent of Parliament; the only exception thereto being agreements concluded under the common commercial policy provisions of Article 113 of the EC Treaty,3 and for which the Commission remained competent.

The Council and representatives of Member States decided at a meeting on 7–8 March 1994, to authorize the President of the Council and Commissioner Sir Leon Brittan to sign the Final Act of the Uruguay Round and the WTO Agreement, at Marrakesh on 15 April 1994 on behalf of the Council of the European Union, while representatives of Member States would sign the Final Act and the WTO Agreement on behalf of their respective governments.4 The minutes of that meeting recorded the

Commission's view that the Final Act and annexed agreements fell within exclusive Community competence.

On 6 April 1994, just nine days prior to signature of the WTO Protocols in Marrakesh, the Commission submitted a request to the Court of Justice for an Opinion under Article 228(6)5 of the EC Treaty regarding the delimitation of powers between the Community and the Member States to conclude the Final Act of the Uruguay Round and the WTO Agreement with its annexes. Specifically, the Commission sought clarification on:

(i) whether the Community had the competence to conclude all parts of the WTO Agreement with respect to gats and trips on the basis of Article 113 of the EC Treaty alone, or in combination with Article 100a of the EC Treaty and/or Article 235 of the EC Treaty;

(ii) whether the Community had sole competence to conclude the WTO Agreement for European Coal and Steel Community and Euratom products and /or services; and

(iii) if the answer to these two questions was in the affirmative, whether this would affect the Member States' competence to conclude the WTO Agreement, given that they were deemed ‘original members of the WTO’.6

The admissibility of the request for an Opinion was disputed before the Court by the Council, supported by the Netherlands Government, on the ground that such a request was usually filed prior to signature of the agreement and it was contended that obligations had already been created at the international level. A formal objection to admissibility was made by the Spanish Government on the grounds that an Opinion could be requested only where international commitments had not been entered into; signature having served only to authenticate the texts which were the outcome of negotiations and entailed an obligation to submit them to the relevant authorities for approval.

The Council, supported by the Portuguese Government, criticized the Commission's wording of the request since the question was not whether the Community could sign and conclude the agreement alone but instead whether ‘the joint conclusion by the Community and the Member States of the agreements resulting from the Uruguay Round was compatible with the division of powers laid down by the Treaties establishing the European Communities’.

Held:—The Community had sole competence, pursuant to Article 113 of the EC Treaty, to conclude the Multilateral Agreements on Trade in Goods; the Community and its Member States were jointly competent to conclude the gats and the trips.

(1) The Court had consistently held that its opinion might be sought, pursuant to Article 228(6) of the EC Treaty, on questions concerning the division of competences between the Community and the Member States to conclude an agreement with non-member countries. That opinion could be sought at any time before the Community's consent to be bound by the envisaged agreement had finally been expressed, even after signature had been effected. The request was therefore admissible (pp. 194–5).

(2) Pleading points with respect to the wording of the request were not taken into account. Instead the Court had to deal with the fundamental issue of whether the Community had exclusive competence to conclude the WTO Agreement and its annexes (p. 196).

(3) Dependent territories, outside the scope of the EC Treaty, were in the same situation as non-member countries and Member States responsible for their international relations therefore participated in the agreement in their own right and not as Member States (p. 197).

(4) The fact that some of the expenses of the WTO, which had an operating budget but was not a financial policy instrument (in contrast to the buffer stock under the International Agreement on Natural Rubber in Opinion 1/78INTL7), were borne by the Member States could not itself justify the participation of the Member States in the conclusion of the WTO Agreement (P. 198).

(5) While it was undisputed that the Community enjoyed exclusive competence under Article 113 of the EC Treaty to conclude the Multilateral Agreements on Trade in Goods, the Euratom Treaty contained no provisions relating to external trade. Therefore, international agreements concluded pursuant to Article 113 could extend to international trade in Euratom products, notwithstanding the Euratom supremacy clause in Article 232(2) of the EC Treaty. In the case of international trade in steel and coal products, under Article 71 of the European Coal and Steel Community (ecsc) Treaty (and endorsed by the supremacy clause of Article 232(1) of the EC Treaty), the Member States retained exclusive competence for international agreements specifically relating to such products. However, the Community had competence pursuant to Article 113 of the ECSC Treaty where ecsc products were included in an international agreement of a general nature, i.e. encompassing all types of goods, including EC products (pp. 198 and 199–200).

(6) Article 113 of the EC Treaty alone was the correct legal basis for the conclusion of the Agreement on Agriculture, the Agreement on the Application of Sanitary and Phytosanitary Measures and the Agreement on Technical Barriers to Trade (‘TBT Agreement’) which were annexed to the WTO Agreement. This was so even when implementation of the first two agreements might require the adoption of internal measures affecting the common organization of the markets, on the basis of Article 43 of the EC Treaty, or in the case of the TBT Agreement, where Member States retained discretionary competence on the regulation of technical barriers to trade because Community directives in this area were of an optional nature or harmonization was incomplete (pp. 200–1).

(7) Accordingly, the Community had exclusive competence, pursuant to

Article 113 of the EC Treaty, to conclude the Multilateal Agreements on Trade in Goods (p. 202).

(8) In the matter gats, services in general could be distinguished from transport services. Bearing in mind developments in international trade, as demonstrated in the WTO Agreement and annexes, which were the product of a single negotiating process on both trade in goods and services, the open nature of the common commercial policy meant that trade in services could not automatically...

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