Trade and Sustainable Development: Opinion 2/15 and the EU’s Foreign Policy Objectives. By Joris Larik
8 June 2017
In the long-awaited Opinion 2/15, the Court of Justice of the EU (CJEU) declared that “the objective of sustainable development henceforth forms an integral part of the common commercial policy” (CCP) (para. 147). Next to the Court’s findings on other elements of the CCP or the state of EU legislation capable of enhancing the Union’s powers to conclude international agreements, this is a salient feature of the Opinion, which illuminates the legal significance of the EU’s foreign policy objectives in the post-Lisbon Treaties.
At the heart of the Opinion was the question whether the EU-Singapore Free Trade Agreement (EUSFTA) could be concluded by the Union alone, or only together with the Member States – making it a so-called “mixed agreement”. In essence, Opinion 2/15 provides an answer to a “who” question by looking mostly at the “what”: Which actors are needed to conclude the agreement, in view of the subject matter covered and how it relates to scope of EU competences, which are either conferred directly by the Treaties or implied through internal EU rules. However, the discussion on the EUSFTA’s chapter on sustainable development sheds light on the arguably more fundamental question of the “why”. To which ends is the EU pursuing its external trade policy – or even its external relations more broadly – and where does that leave the Member States?
The EU’s constitutional foreign policy objectives post-Lisbon
As Kleimann and Kübek aptly summarize, “Opinion 2/15 confirms the tectonic shifts of competence that the Lisbon Treaty has brought about in the area of EU Common Commercial Policy.” These shifts brought about by the Lisbon reform not only concerned the scope of the CCP, but also its goals. Pre-Lisbon, the objectives of the CCP were strictly trade-oriented (see Art. 131 TEC). Moreover, an overarching set of objectives of the EU in its external relations did not exist, merely a rather vague reference regarding the development of “its identity on the international scene” (Art. 2(1) pre-Lisbon TEU), which was then still an entity distinct from the European Community.
With the Lisbon reform, the EU Treaties have for the first time received a comprehensive set of objectives for the Union’s external relations. Art. 3(5) TEU and Art. 21 TEU contain the overall objectives of external action, which are applicable to all policy areas. In addition, some policies (but, curiously, not the Common Foreign and Security Policy (CFSP)) contain a set of area-specific objectives. In the case of the CCP, these can be found in Art. 206 TFEU, which states that “the Union shall contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and on foreign direct investment, and the lowering of customs and other barriers.” This formulation is largely unchanged from before Lisbon and indeed the 1957 Rome Treaty (Art. 110), with the notable change being the inclusion of the term “foreign direct investment”.
The post-Lisbon Treaties do not simply juxtapose these objectives, but closely link them together. Art. 205 TFEU stresses that the “Union’s action on the international scene” in the different policies included in the TFEU “shall be guided by the principles, pursue the objectives and be conducted in accordance with the general provisions laid down in” Art. 21 of the TEU. This same idea is reiterated in Art. 207(1) TFEU with specific regard to the CCP.
Immediately after the Lisbon Treaty’s entry into force in 2009, it was not clear what the legal relevance of these objectives would be. These were certainly not hard legal obligations that could be invoked in court by the Member States or the institutions – let alone individuals. Moreover, they are not to be conflated anymore with norms establishing the competences of the EU, given that the very broad nature of these objectives would render the idea of conferred powers nugatory.
In the past years, however, it has become clearer that these objectives play a role at in interpreting the Treaties, in two ways in particular. Firstly, the objective of contributing to “the strict observance and development of international law” has been used by the CJEU to establish that the EU is bound by customary international law, which was previously only posited in the case law of the court with no “hook” in the primary law (see Case C 366/10 Air Transport Association of America). Secondly, effective pursuit of these objectives has been invoked by the institutions in the context of delimiting different areas of EU competence from each other, especially in disputes about the correct legal basis. Hence, while the objectives cannot create competences on their own, they serve to shape their outer contours and help to allocate them to particular policies. For instance, the Council invoked the pursuit of anti-terrorism as a contribution to international security to, successfully, make the argument that targeted sanctions against persons associated with Al Qaeda fell under the CFSP rather than the Area of Freedom Security and Justice (AFSJ) (assuming also that international security still constitutes a quintessentially “CFSP objective”, see, Case C-130/10 Parliament v Council (Al-Qaeda Sanctions)).
Opinion 2/15: Sustainable development as an “integral part” of the CCP
In Opinion 2/15, the EU’s foreign policy objectives played a role in the second category mentioned above, i.e. delimitation between different competence areas, in casu whether the chapter of the EUSFTA concerning sustainable development, which deals with environmental and labour standards, falls within the CCP, or rather within environmental and social policy, respectively.
CJEU came to disagree on this point markedly with the Advocate General. The latter had argued in her opinion that “Articles 3(5) and 21 TEU […] are not relevant to resolving the issue of competence” and “cannot affect the scope of the common commercial policy laid down in Article 207 TFEU” (para. 495), concluding that sustainable development chapter still fell under the competences shared with the Member States.
By contrast, the CJEU reiterated that as far as the CCP is concerned, “the FEU Treaty differs appreciably from the EC Treaty previously in force, in that it includes new aspects of contemporary international trade in that policy” and that the “extension of the field of the common commercial policy by the FEU Treaty constitutes a significant development of primary EU law” (para. 141). These changes also concern the content and organization of the EU’s foreign policy objectives as codified in the Treaties. The Court made specific references to the provisions linking the CCP-specific objectives to those on the EU’s external action in general, noting that these, “as is stated in Art. 21(2)(f) TEU, relate inter alia to sustainable development linked to preservation and improvement of the quality of the environment and the sustainable management of global natural resources” (para. 142). According to the Court, in view of this tapestry of interlinked goals, the “obligation on the European Union to integrate those objectives and principles into the conduct of its common commercial policy is apparent” (para. 143). Hence, it viewed “the objective of sustainable development” from now on “as an integral part of the common commercial policy” (para. 147).
As with the other areas of the agreement, the Court then applied its “specific link” and “direct and immediate effects on trade test”. The Court concluded that both were present here, seeing, among other reasons, that the sustainable development chapter of the EUSFTA is aimed at avoiding trade promotion “by reducing the levels of social and environmental protection […] below the standards laid down by international commitments” and at prohibiting the invocation of such standards “in a protectionist manner” (para. 158).
Where does the CCP end?
Before concluding that the sustainable development chapter indeed falls under the EU’s a priori exclusive competence of the CCP, the CJEU added some remarks on the limits of the CCP. Without any limits, the CCP would indeed be able to swallow up large parts of other policy areas, which are not a priori exclusive in nature. The Court thus noted that the CCP competence “cannot be exercised in order to regulate the levels of social and environmental protection in the Parties’ respective territory” (para. 164). It stressed, moreover, that the CCP “does not prevail over these other provisions” on non-CCP areas (para. 164), recalling also Art. 207(6) TFEU.
Nonetheless, Opinion 2/15 leaves the impression that as soon as a particular external act of the Union can be framed in the pursuit of its foreign policy objectives, there is a lot of leeway in choosing the policy through which to pursue it – at least for the non-sector specific objectives in Arts. 3(5) and 21 TEU. This has important implications, as it means that using shared competences, and with it the possibility of mixity, can be avoided as long as the core of other, non-exclusive policy areas is not touched upon, in this case direct and unequivocal social and environmental regulation.
Looking to the future, it will be interesting to see whether this flexibility applies “only” between the different TFEU policies, or also to the pursuit of CFSP-related objectives, especially since that policy does not have a “core” in the sense of regulation, seeing that the adoption of legislative acts is excluded (Art. 24(1)(2) TEU). In any event, in the post-Lisbon world, the goals of EU external action are clearly spelled out, and the paths that lead to them are many.
Dr Joris Larik is Assistant Professor of Comparative, EU and International Law at Leiden University, The Netherlands, and Senior Researcher at The Hague Institute for Global Justice.
This blog was first posted on the blog of Europe and the World: A Law Review.acelg