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Common Commercial Policy in the European Constitutional Area: EU External Trade Competence and the Lisbon Decision of the German Federal Constitutional Court

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Common Commercial Policy after Lisbon

Part of the book series: European Yearbook of International Economic Law ((Spec. Issue))

Abstract

Following the Lisbon Treaty coming into force, the further development of an EU Common Commercial Policy is determined—regardless of its further political and regulatory progression—by the increase in powers which the EU has been attributed in the context of commercial policy through the amendment of Art. 207 of the TFEU. But this extension of powers is also related to the repercussions of the EU commercial policy for the Member States. First, the extension of the traditionally exclusive EU competence (now explicitly stated in Art. 3 para. 1 lit. e TFEU) in the field of Common Commercial Policy in a comprehensive manner on trade in services, on commercial aspects of intellectual property and on foreign direct investment (cf. Art. 207, para. 1 TFEU) leads to the question of the role WTO Member States can still assume, as it seems all the subject matters of WTO law are now covered solely and exclusively by EU competence. Furthermore, the possibility of a further extension of EU competence in the Common Commercial Policy depends on the constitutional limits of the integration process in the Member States, not least in Germany. The German Bundesverfassungsgericht (Federal Constitutional Court) in its Lisbon judgement set these limits in a manner which was quite criticized as the Federal Constitutional Court named specific policy areas for which a further supra-nationalisation could not take place, or only with significant sensitivity for remaining domestic competences, and which have been termed “Integration proof reserved areas”. Without having the slightest criteria for this in the Constitution, the Federal Constitutional Court deduced them ostensibly from the principle of democracy and subsidiarity, and thus as if providing instruction of the tasks of the state. The Court opined: “Particularly sensitive for the ability of a constitutional state to democratically shape itself are decisions on … criminal law…, on the disposition of the monopoly on the use of force …, fundamental fiscal decisions … decisions on the shaping of living conditions in a social state … decisions of particular cultural importance” (The BVerfG lists here “family law, the school and education system and the dealing with religious communities”). One of the reserved areas was subsequently stressed particularly by the Federal Constitutional Court’s order on the rescue package, i.e. national autonomy over budgetary matters, which in our context here is irrelevant as the obligations flowing from WTO law have no fundamental budgetary significance.

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Notes

  1. 1.

    EU competence in the area of foreign direct investments was newly added by the Lisbon Treaty, after corresponding attempts of the Commission to expand EU competence failed in Nice. In the Treaty of Nice EU competence had already been extended to trade in services and the commercial aspects of intellectual property (Art. 133(5) TEU), however it had not existed as an exclusive EU competence insofar, cf. ECJ, Opinion 1/08 – GATS, ECR [2009] I-11129, paras. 144 et seq.; Hahn, in: Calliess/Ruffert (eds.), EUV/EGV, (3rd ed.) 2007, Art. 133 EGV, paras. 72, 130.

  2. 2.

    Terhechte, Souveränität, Dynamik und Integration – making up the rules as we go along? Anmerkungen zum Lissabon-Urteil des Bundesverfassungsgerichts, Europäische Zeitschrift für Wirtschaftsrecht 20 (2009) 20, p. 724 (731) speaks of “areas of decelerated integration”.

  3. 3.

    By Ruffert, An den Grenzen des Integrationsverfassungsrechts: Das Urteil des Bundesverfassungsgerichts zum Vertrag von Lissabon, Deutsches Verwaltungsblatt 124 (2009) 19, p. 1197 (1202): “integrationsfeste Vorbehaltsbereiche”. For more detail on these areas see, pp. 1202 et seq.

  4. 4.

    See the Lisbon decision of the Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, para. 251: “The principle of democracy as well as the principle of subsidiarity, which is also structurally required by Article 23.1 first sentence of the Basic Law, therefore require factually to restrict the transfer and exercise of sovereign powers to the European Union in a predictable manner, particularly in central political areas of the space of personal development and the shaping of living conditions by social policy. In these areas, it is particularly necessary to draw the limit where the coordination of cross-border situations is factually required”. (This and all other quotes from the Federal Constitutional Courts are taken from the official English translation of the decisions, available at the Court’s website: www.bverfg.de).

  5. 5.

    S. Calliess, Die neue EU nach dem Vertrag von Lissabon, 2010, p. 258; Terhechte, Souveränität, Dynamik und Integration – making up the rules as we go along? Anmerkungen zum Lissabon-Urteil des Bundesverfassungsgerichts, Europäische Zeitschrift für Wirtschaftsrecht 20 (2009) 20, p. 724 (730).

  6. 6.

    Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, paras. 252 et seq.

  7. 7.

    Federal Constitutional Court, 2 BvR 987/10, Euro Rescue Package, NJW 64 (2011) 40, 2946 (paras. 124 et seq. and esp. paras. 133 et seq. The limit to the conferral of powers is reached when the autonomy of the national budget is no longer guaranteed resulting in the liability for other Member States’ debts, even in the form of the communitisation of national debt.

  8. 8.

    Haratsch/Koenig/Pechstein, Europarecht, (7th ed.) 2010, para. 1277.

  9. 9.

    Tietje, Das Ende der parallelen Mitgliedschaft von EU und Mitgliedstaaten in der WTO?, in: Herrmann/Krenzler/Streinz (eds.), Die Außenwirtschaftspolitik der EU nach dem Verfassungsvertrag, 2006, p. 161 (172); Bungenberg, Außenbeziehungen und Außenhandelspolitik, in: Schwarze/Hatje (eds.), Der Reformvertrag von Lissabon, Europarecht Supplement 1/2009, 2009, p. 195 (206); see also Berrisch, Der völkerrechtliche Status der EWG im GATT, 1992, pp. 99 et seq. The Federal Constitutional Court (2 BvE 2/08 et al., BVerfGE 123, 267, para. 380) interprets Art. 351 TFEU to the effect that at first earlier Treaties of the EU Member States remain in force. This is very correct but Art. 351(2) TFEU envisages an obligation on the part of the Member States in the event of a collision with EU legislation to dissolve the latter which actually could happen by a national exit from the WTO.

  10. 10.

    WT/L/641. See Herrmann/Weiß/Ohler, Welthandelsrecht, (2nd ed.) 2007, para. 967.

  11. 11.

    The document can be found at http://www.wto.org/english/tratop_e/trips_e/popup_amendment_ec_e.htm.

  12. 12.

    On the significance of Art. 133(5) TEC cf. Osteneck, in: Schwarze (ed.), EU-Kommentar, (2nd ed.) 2009, Art. 133 para. 11.

  13. 13.

    See also Hahn, in: Calliess/Ruffert (eds.), EUV/AEUV, (4th ed.) 2011, Art. 207 para. 62. For the notion of investment in the sense of Art. 207(1) TFEU see Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, para. 379, which uses the acquirement of control as the relevant criterion, and refers to Tietje, Die Außenwirtschaftsverfassung der EU nach dem Vertrag von Lissabon, Beiträge zum transnationalen Wirtschaftsrechts (2009) 83, p. 16, (also Tietje, Außenwirtschaftliche Dimensionen der europäischen Wirtschaftsverfassung, in: Fastenrath/Nowak (eds.), Der Lissaboner Reformvertrag, 2009, p. 237 (249)) who states that according to OECD principles the term direct investment subsumes an equity interest exceeding 10%. This can open up a tension in the interpretation of the term investment to the rules on movement of capital which usually are more broadly interpreted because they not only imply gaining control but also refer to effective participation in management, cf. ECJ, Case C-326/07, Commission vs. Italy, ECR [2009] I-2291, para. 35.

  14. 14.

    So Krajewski, External Trade and the Constitution Treaty: Towards a Federal and More Democratic Common Commercial Policy?, Common Market Law Review 42 (2005) 1, p. 91 (114–115); equally Osteneck, in: Schwarze (ed.), EU-Kommentar, (2nd ed.) 2009, Art. 133 para. 42; contrary to Terhechte, Art. 351 AEUV, das Loyalitätsgebot und die Zukunft mitgliedstaatlicher Investitionsschutzverträge nach Lissabon, Europarecht 45 (2010) 4, p. 517 (521).

  15. 15.

    The Lisbon Treaty made no far-reaching changes to this as the competence provisions of Art. 2 et seq. TFEU incorporate the well-known, even though not explicitly stated rules under the Nice EU/EC law. Art. 2 et seq. TFEU largely do not more than reflect the traditional ECJ case law on the categories and scope of EU competences, cf. Streinz/Ohler/Herrmann, Der Vertrag von Lissabon zur Reform der EU, (3rd ed.) 2010, p. 104, 107–108.

  16. 16.

    Cf. the case studies mentioned by Tietje, Das Ende der parallelen Mitgliedschaft von EU und Mitgliedstaaten in der WTO?, in: Herrmann/Krenzler/Streinz (eds.), Die Außenwirtschaftspolitik der EU nach dem Verfassungsvertrag, 2006, p. 161 (165 et seq.).

  17. 17.

    Cf. Tietje, Das Ende der parallelen Mitgliedschaft von EU und Mitgliedstaaten in der WTO?, in: Herrmann/Krenzler/Streinz (eds.), Die Außenwirtschaftspolitik der EU nach dem Verfassungsvertrag, 2006, p. 161 (167).

  18. 18.

    This is also noted by Tietje, Das Ende der parallelen Mitgliedschaft von EU und Mitgliedstaaten in der WTO?, in: Herrmann/Krenzler/Streinz (eds.), Die Außenwirtschaftspolitik der EU nach dem Verfassungsvertrag, 2006, p. 161 (172).

  19. 19.

    Cf. Hummer, in: Vedder/Heintschell von Heinegg (eds.), Europäischer Verfassungsvertrag, 2007, Art. III-315, para. 36–37; Pitschas, Der Handel mit Dienstleistungen, in: Herrmann/Krenzler/Streinz (eds.), Die Außenwirtschaftspolitik der EU nach dem Verfassungsvertrag, 2006, p. 99 (105–107).

  20. 20.

    It has not yet been clarified whether disciplines pursuant to Art. VI(4) GATS only include sectors for which specific commitments were made or whether they are relevant to all services.

  21. 21.

    Cf. Fischer, Der Vertrag von Lissabon, 2008, p. 334 who regards Art. 207(6) as limitation clause to the exclusive EU competence; similar Hummer, in: Vedder/Heintschel von Heinegg (eds.), Europäischer Verfassungsvertrag, 2007, Art. III-315, para. 32–33, who once speaks of a limit to exclusive competence, but then of a limitation to the exercise of competence. In favour of a need for a mixed agreement also Pitschas, Der Handel mit Dienstleistungen, in: Herrmann/Krenzler/Streinz (eds.), Die Außenwirtschaftspolitik der EU nach dem Verfassungsvertrag, 2006, p. 99 (106–107).

  22. 22.

    Cf. ECJ, Opinion 1/08 – GATS, ECR [2009] I-11129, paras. 138–139; Advocate General Kokott, Opinion in ECJ, Case C-13/07, paras. 167–168.

  23. 23.

    Krajewski, External Trade Law and the Constitutional Treaty: Towards a Federal and More Democratic Common Commercial Policy?, Common Market Law Review 42 (2005) 1, p. 91 (115–116); Tietje, Die Außenwirtschaftsverfassung der EU nach dem Vertrag von Lissabon, Beiträge zum transnationalen Wirtschaftsrecht (2009) 83, pp. 12–13 (also Tietje, Außenwirtschaftsrechtliche Dimensionen der europäischen Wirtschaftsverfassung, in: Fastenrath/Nowak (eds.), Der Lissabonner Reformvertrag, 2009, p. 237 (244-245); Müller-Ibold, in: Lenz/Borchardt (eds), EU-Verträge, (5th ed.) 2010, Vor Art. 206-207, para. 21.

  24. 24.

    Contra Krajewski, External Trade Law and the Constitutional Treaty: Towards a Federal and More Democratic Common Commercial Policy?, Common Market Law Review 42 (2005) 1, p. 91 (116–117), who opines that without Art. 207(6) TFEU the EU would have gained comprehensive implementation competence with conclusion of an international trade agreement. There seems, however, to be no legal basis for such bold allocation of competence to the EU; Krajewski does not offer one. The case law of the ECJ deals with the emergence of external EU competences as a result of exercise of internal EU competences, but not the other way round.

  25. 25.

    Cf. also Hahn, in: Calliess/Ruffert (eds.), EUV/AEUV, (4th ed.) 2011, Article 207, para. 121.

  26. 26.

    Krajewski, External Trade Law and the Constitutional Treaty: Towards a Federal and More Democratic Common Commercial Policy?, Common Market Law Review 42 (2005) 1, p. 91 (118) describes the substantial legal and factual pressure on the Member States in case the EU takes on obligations under international law.

  27. 27.

    ECJ, Opinion 1/94, ECR [1994] I-5267, paras. 59–60.

  28. 28.

    This is ignored by Krajewski, External Trade Law and the Constitutional Treaty: Towards a Federal and More Democratic Common Commercial Policy?, Common Market Law Review 42 (2005) 1, p. 91 (117).

  29. 29.

    Cf. Hahn, in: Calliess/Ruffert (eds.), EUV/EGV, (3rd ed.) 2007, Art. 133, paras. 110–112.

  30. 30.

    Cf. Fischer, Der Vertrag von Nizza, 2001, pp. 116–117.

  31. 31.

    In the convention draft this finally became Article III-217(5) (“The exercise of the competences conferred by this Article in the field of commercial policy shall not affect the delimitation of internal competences between the Union and the Member States, and shall not lead to harmonisation of legislative or regulatory provisions of Member States in so far as the Constitution excludes such harmonisation”.) After the intergovernmental conference of 2004 the only change in the English version of the text was the omission of the word “internal” in the then Art. III-315(6) of the Draft Constitutional Treaty, see OJ [2004] C 310/1.

  32. 32.

    See CONV 685/03, p. 55, para. 7 (at the end).

  33. 33.

    CONV 685/03, p. 55, para. 8.

  34. 34.

    The majority of the working group advocated qualified majority, but regardless of harmonisation limitations: The Presidium did not take this up and referred to a simplified continuation of Art. 133(5) TEU in the precursor rule of Art. 207(4) TFEU requiring unanimity in certain areas, CONV 685/03, p. 53, para. 1.

  35. 35.

    CONV 459/02, pp. 7, 18.

  36. 36.

    Cf. CONV 707/03, pp. 7, 108.

  37. 37.

    Tietje, Die Außenwirtschaftsverfassung der EU nach dem Vertrag von Lissabon, Beiträge zum transnationalen Wirtschaftsrecht (2009) 83, pp. 12–13 (also Tietje, Außenwirtschaftsrechtliche Dimensionen der europäischen Wirtschaftsverfassung, in: Fastenrath/Nowak (eds), Der Lissabonner Reformvertrag, 2009, p. 237 (244–245).

  38. 38.

    CONV 727/03, pp. 53–54.

  39. 39.

    CONV 727/03, pp. 53–54. The final convention draft, CONV 850/03, p. 166, Art. III-217 para. 4, included trade in cultural and audiovisual services as further cases for unanimity.

  40. 40.

    The setting of unanimity in the Council and the issue of exclusive or shared EU competence are two different matters, see also ECJ, Opinion 1/08 – GATS, ECR [2009] I-11129, para. 142.

  41. 41.

    Herrmann, Die Zukunft der mitgliedstaatlichen Investitionspolitik nach dem Vertrag von Lissabon, Europäische Zeitschrift für Wirtschaftsrecht 21 (2010) 6, p. 207 (210).

  42. 42.

    Raith, The Common Commercial Policy and the Lisbon Judgement of the German Constitutional Court of 30 June 2009, Zeitschrift für europarechtliche Studien 12 (2009) 4, p. 613 (615, 617, 618 et seq.).

  43. 43.

    Cf. Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, paras. 374–375.

  44. 44.

    Nettesheim, Ein Individualrecht auf Staatlichkeit? Die Lissabon-Entscheidung des BVerfG, Neue Juristische Wochenschrift 62 (2009) 39, p. 2867 (2868).

  45. 45.

    Cf. Raith, The Common Commercial Policy and the Lisbon Judgement of the German Constitutional Court of 30 June 2009, Zeitschrift für europarechtliche Studien 12 (2009) 4, p. 613 (617).

  46. 46.

    Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, para. 380. This is rightfully criticized by Terhechte, Art. 351 AEUV, das Loyalitätsgebot und die Zukunft mitgliedstaatlicher Investitionsschutzverträge nach Lissabon, Europarecht 45 (2010) 4, p. 517 (530–531).

  47. 47.

    Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, paras. 375–376.

  48. 48.

    Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, paras. 351, 370 et seq.

  49. 49.

    Ruffert points to this in his contribution: An den Grenzen des Integrationsverfassungsrechts: Das Urteil des BVerfG zum Vertrag von Lissabon, Deutsches Verwaltungsblatt 124 (2009) 19, p. 1197 (1204).

  50. 50.

    Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, paras. 377 et seq.

  51. 51.

    Cf. Ruffert, An den Grenzen des Integrationsverfassungsrechts: Das Urteil des BVerfG zum Vertrag von Lissabon, Deutsches Verwaltungsblatt 124 (2009) 19, p. 1197 (1204).

  52. 52.

    Federal Constitutional Court, 2 BvR 2661/06, Honeywell, BVerfGE 126, 286, para. 62. See also Federal Constitutional Court, 2 BvR 687/85, BVerfGE 75, 223 (242 f); Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, paras. 351–352.

  53. 53.

    Federal Constitutional Court, 2 BvR 2661/06, Honeywell, BVerfGE 126, 286, para. 64.

  54. 54.

    Federal Constitutional Court, 2 BvR 2661/06, Honeywell, BVerfGE 126, 286, para. 65, with reference to Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, paras. 357–358.

  55. 55.

    Federal Constitutional Court, 2 BvR 2661/06, Honeywell, BVerfGE 126, 286, para. 66.

  56. 56.

    Federal Constitutional Court, 2 BvR 2661/06, Honeywell, BVerfGE 126, 286, Dissenting opinion of Judge Landau, para. 102.

  57. 57.

    ECJ, Case C-144/04, Mangold, ECR [2005] I-9981.

  58. 58.

    Federal Constitutional Court, 2 BvR 2661/06, Honeywell, BVerfGE 126, 286 para. 68.

  59. 59.

    Regarding the latter Federal Constitutional Court, 2 BvR 2661/06, Honeywell, BVerfGE 126, 286, para. 78.

  60. 60.

    Federal Constitutional Court, 2 BvR 987/10, Euro Rescue Package, NJW 64 (2011) 40, 2946.

  61. 61.

    It is a special purpose vehicle of the Euro States under Luxembourg law.

  62. 62.

    For details on the content and essence of the Euro rescue package see Thym, Euro-Rettungsschirm: zwischenstaatliche Rechtskonstruktion und verfassungsgerichtliche Kontrolle, Europäische Zeitschrift für Wirtschaftsrecht 22 (2011) 5, p. 167 (168); Baumgart, Die Zurückweisung der Verfassungsbeschwerden gegen Maßnahmen zur Griechenlandhilfe und zum Euro-Rettungsschirm, Neue Justiz 65 (2011) 11, p. 450 (450–451).

  63. 63.

    Sceptical Thym, Euro-Rettungsschirm: zwischenstaatliche Rechtskonstruktion und verfassungsgerichtliche Kontrolle, Europäische Zeitschrift für Wirtschaftsrecht 22 (2011) 5, p. 167 (169).

  64. 64.

    Federal Constitutional Court, 2 BvR 987/10, Euro Rescue Package, NJW 64 (2011) 40, 2946, paras. 113 et seq.

  65. 65.

    Federal Constitutional Court, 2 BvR 2134/92; 2 BvR 2159/92, BVerfGE 89, 155, para. 188.

  66. 66.

    Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, paras. 353–354.

  67. 67.

    Critical remarks by Ruffert, Die europäische Schuldenkrise vor dem Bundesverfassungsgericht – Anmerkung zum Urteil vom 7. September 2011, Europarecht 46 (2011) 6, p. 842 (847) and Pagenkopf, Schirmt das BVerfG vor Rettungsschirmen?, Neue Zeitschrift für Verwaltungsrecht 30 (2011) 24, p. 1473 (1479). Also Nettesheim, “Euro-Rettung” und Grundgesetz – Verfassungsgerichtliche Vorgaben für den Umbau der Währungsunion, Europarecht 46 (2011) 6, p. 765 (769–770) stressed that a constitutional court review is also necessary where there is no national legislation or national implementation measure. Explicitly he names the activities of the EFSM and the role change of the ECB as starting points for ultra vires review.

  68. 68.

    Accord Ruffert, Die europäische Schuldenkrise vor dem Bundesverfassungsgericht – Anmerkung zum Urteil vom 7. September 2011, Europarecht 46 (2011) 6, p. 842 (846–847).

  69. 69.

    Federal Constitutional Court, 2 BvE 2/08 et al., BVerfGE 123, 267, para. 260.

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  1. German University of Administrative Sciences Speyer, 1409, 67324, Speyer, Germany

    Wolfgang Weiß

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  1. , Business Economics and Business Law, University of Siegen, Hölderlinstr. 3, Siegen, 57068, Germany

    Marc Bungenberg

  2. Chair for Constitutional and Administrat, European Law, European and, University of Passau, Innstraße 39, Passau, 94032, Germany

    Christoph Herrmann

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Weiß, W. (2013). Common Commercial Policy in the European Constitutional Area: EU External Trade Competence and the Lisbon Decision of the German Federal Constitutional Court. In: Bungenberg, M., Herrmann, C. (eds) Common Commercial Policy after Lisbon. European Yearbook of International Economic Law(). Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-34255-4_3

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