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Corporate Europe Observer - Issue 7
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New EU Treaty May Give European Commission 'Fast-Track' Negotiating Authority

"Let me get really controversial. I am determined on this trip to put the case to the UK government for more majority voting in the forthcoming IGC... I am talking, of course, about updating the EU's common commercial policy as set out in Article 133 of the Treaty, to permit qualified majority voting in the Council to determine our position in international trade negotiations in services, intellectual property and investment." - EU Trade Commissioner Pascal Lamy [1]

n a speech to the Confederation of British Industry (CBI) in London on 6 July 2000, Trade Commissioner Pascal Lamy kicked-off his campaign to dismantle existing restrictions on the European Commission's ability to freely negotiate international trade and investment policies. Lamy's campaign is directed at influencing the outcome of current negotiations among EU Member States over another revision of the EU Treaty. These negotiations, also known as 'IGC 2000' (Intergovernmental Conference 2000), began in February this year and are likely to be finalised at the EU Summit in Nice, France this December. There is strong indication that the European Commission may get more power to negotiate and conclude agreements on behalf of EU member states in the World Trade Organisation and other international trade fora. In effect, the European Commission is seeking something akin to what the US government refers to as 'fast-track' negotiating authority.

Since the mid-1990s, corporate lobby groups like the European Roundtable of Industrialists (ERT), the European employers' confederation UNICE, and the EU Committee of AmCham have been lobbying aggressively to strengthen the European Union's competence in international trade negotiations.[2] For these groups, swift centralised EU decision-making on its international trade policy is ideal. It ensures that decisions do not get stalled or watered-down by Member States' interventions, even if based on legitimate national concerns, and makes it easier for lobby groups to push business demands through an already industry-friendly European bureaucracy, bypassing more democratic processes.

The language of these lobby groups has seeped into official documents for the current IGC. In a note prepared for the negotiators, the IGC's Legal Adviser concludes that the EU's external trade policy should be governed by "clear, simple, transparent and effective" rules.[3] The European Union, "has to act as one (presenting a united front) in all cases, with a single spokesman stating the common position."[4] From such a perspective, democratic procedures for deciding on international trade policy are seen as a hindrance to 'efficiency'.

This conflict between efficiency and democratic control has, in the past decade led a number of EU Member States, of which France has traditionally been the most outspoken, to oppose further increasing the EU's power in international trade and investment negotiations.[5] The issue featured prominently in the negotiations over the Amsterdam Treaty. In the months leading up to the June 1997 Amsterdam Summit, the European Commission and corporate pressure groups waged an intensive lobby campaign to persuade reluctant governments to drop their opposition to a transfer of sovereignty.[6] Staunch French opposition forced a compromise. The outcome was that the European Commission did not get exclusive authority to negotiate over new issues such as investment, intellectual property and trade in services. However, the Amsterdam Treaty now allows the Council, by unanimous decision, to grant the European Commission full competence in all external trade policy.[7]

Still faced with this hurdle of unanimity in the Council to expand the EU's trade powers, the proponents of a "strong and unified EU voice" now try to use the complex and opaque EU treaty revision process to smuggle-in a radical transfer of powers, which would strip individual Member States' veto powers and mandatory ratification by national parliaments once and for all.

The French government plays a central role. France currently holds the presidency of the EU for the rest of the year, which gives the French government considerable influence over the treaty revision negotiations. The French government, however, now seems to have capitulated on its previous demands to maintain national sovereignty in external trade issues. A September draft protocol released by the French government, calls for qualified majority voting in the Council of Ministers, and suggests that the European Commission be the sole EU representative for all international trade negotiations.[8]

Until now, the French government has been able to avoid publicity over this shift in its position, which is guaranteed to create a huge stir, in a country which boasts some of the strongest and most widespread opposition to economic globalisation. But the corporate-backed pro-EU camp holds some trump cards. The fact that EU Trade Commissioner Pascal Lamy, himself French and of considerable stature among the French political elite, is campaigning for extending EU competence on external trade makes it more difficult for the French government to block such proposals. And secondly, President Jacques Chirac has recently appointed Jérôme Monod to join his staff of advisers. Monod, CEO of French water giant Suez Lyonnaise des Eaux, (see water article in this issue) was last year's European Co-Chair of the Transatlantic Business Dialogue (TABD) and Chair of the European Roundtable of Industrialists (ERT) between 1992 and 1995, and is one of the ERT's 'experts' on European unification.[9] As the French daily newspaper Le Monde headlined earlier this summer, "At the Elysée, the Europhiles have won the battle of influence."[10]

What's at stake

Under the Amsterdam Treaty, the European Commission already has extensive powers in international trade negotiations. However, at the moment, all EU participation in WTO proceedings departs from the assumption that there is so-called 'mixed competence' between the European Commission and the Member States. Mixed competence issues imply unanimous decisions in the Council and national ratification procedures for any resulting agreements in all 15 EU countries.

This status quo results from a 1994 European Court of Justice opinion, which defined trade in services and intellectual property as issues of mixed competence. According to the Amsterdam Treaty, the European Commission can, on behalf of all Member States, negotiate and sign WTO agreements in areas where it has full authority- for example, in areas pertaining to trade in goods. As WTO negotiations tend to be complex and comprehensive, mixed competence has in practice become the general guiding principle for EU participation in WTO proceedings. [11]

The proposed changes in EU external policy are comparable to the Clinton administration's (failed) attempts to gain 'fast-track' powers over international trade policies, bypassing the current system whereby the US government must get Congressional approval for its negotiating positions.[12] EU Trade Commissioner Lamy describes such changes as "modernising decision-making."[13] If the Commission had such powers in the past, many controversial EC proposals would almost certainly have become reality, as the Member States would not have had the possibility to block them. Former EU Trade Commissioner Sir Leon Brittan's New Transatlantic Marketplace initiative, which aimed to create an EU-US free trade zone by 2010, was blocked by a veto from France in 1998. The negotiations on the OECD's Multilateral Agreement on Investment (MAI), in which the individual EU countries negotiated separately, could have taken a disastrous turn if decisions were left to the Commission. Member States would not have been able to withdraw from the negotiations, as France followed by the United Kingdom did. The EC took an extremely hard-line neoliberal approach during the MAI negotiations and pushed for an agreement before the opposition would grow too strong.[14] Fortunately it lacked the authority to make such decisions.

It was the limits in the EU's powers over international investment policies that enabled the movement against the MAI to intervene at the national level and eventually halt the negotiations. It is precisely these kinds of 'obstacles' that the EC wants to prevent in the future, through the revision of the Amsterdam Treaty. With the EU's Nice Summit taking place in December, there are less than two months left to prevent this disastrous scenario from unfolding.


1. Lamy, Pascal, Speech to Confederation of British Industry, London 6 July 2000.| Back to Text |

2. For an overview, see, "Intergovernmental Conference 2000: Business and the Amsterdam Leftovers," Corporate Europe Observer - Issue 6, April 2000.| Back to Text |

3. The Legal Advisor, "Note for the Member State Government Representatives Group; IGC 2000 – External Economic Relations", Brussels 10 May 2000 [SN 2705/00].| Back to Text |

4. Ibid.| Back to Text |

5. The 'sovereignty' camp consisted of France, the UK, Denmark, Portugal and Spain. See: Sophie Meunier, Kalypso Nicolaïdis, "Who speaks for Europe? The Delegation of Trade Authority in the EU," Journal of Common Market Studies, September 1999, Vol 37, No.3 , pp.477-501. | Back to Text |

6. "The Amsterdam Summit in Retrospect: Maastricht II and Corporate Lobby Successes," Corporate Europe Observer, Issue 0, October 1997.| Back to Text |

7. Amsterdam Treaty, Article 133.5: "The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, may extend the application of paragraphs 1 to 4 to international negotiations and agreements on services and intellectual property insofar as they are not covered by these paragraphs."| Back to Text |

8. "Draft protocol for more specified rules for the European Union's participation in the work in the WTO," French Presidency, CONFER 4767/00, Brussels, 29 August 2000. Page 14.| Back to Text |

9. "Monod was always the one that you went to ask about Europe and questions like the intergovernmental conference," ERT staffer quoted in, "Chirac's right-hand man," European Voice, 27 July - 2 August 2000.| Back to Text |

10. Raphaëlle Bacqué, "A l'Elysée, les europhiles ont gagné la bataille d'influence", Le Monde, 27 June 2000.| Back to Text |

11. This tendency towards complexity, could be seen as a strategy by the Commission to gain full negotiating authority. By pursuing a complex negotiating strategy whereby mixed competencies require different approval procedures, the Commission can argue that it needs a simplified process, and would call for a full mandate.| Back to Text |

12. "European Union participation in WTO proceedings: Draft Protocol on arrangements for participation by the European Union (European Community and Member States) in WTO proceedings" in, Intergovernmental Conference on Institutional Reform -- Presidency Report to the Feira European Council, Brussels, 14 June 2000 [CONFER 4750/00] | Back to Text |

13 "My initiative is nothing more than modernising in 2000 terms what was agreed when the Common Market was founded 43 years ago: majority voting for trade matters. In between, services and intellectual property have taken an increasing importance which they did not have in 1957. Nothing else than refurbishing." Excerpts from webchat with Commissioner Lamy, 12 July 2000, http://europa.eu.int/comm/chat/lamy3/index_en.htm | Back to Text |

14. During the crucial high-level negotiation session on the MAI in February 1998, the European Commission issued a strong warning against further delay, "Buying more time will make things more difficult, not easier, as special interest groups everywhere discover the questionable value found in denouncing the MAI for their own purposes which have nothing to do with investment." The Commission stressed that a failure of the MAI negotiations would also jeopardise the ultimate goal of an investment agreement in the WTO, "It would be bad for the globalised economy in general. The world would be further away from global investment rules than ever, and this for a long time, if we in the OECD cannot agree on the first cornerstone." Speaking Notes of a European Commission Representative at High-Level Meeting on the MAI, 16-17 February 1998, Paris. | Back to Text |

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