The Lisbon Treaty entered into force on 1 December 2009. With its entry into force came a number of important changes to the institutional and decision-making structures of the European Union (EU). In the field of international trade policy, the Lisbon Treaty had an especially significant impact. Some of the key changes are described below.
The expanded role of the European Parliament
One of the main innovations of the Lisbon Treaty vis-à-vis trade policy concerns the role of the European Parliament (EP). Prior to the entry into force of the Lisbon Treaty, the EP had very little say in trade policy. The Lisbon Treaty greatly expands the role of the EP in two important ways.
First, the EP is now a co-legislator, along with the Council, in the adoption of measures defining the framework for implementing the common commercial policy. Prior to the entry into force of the Lisbon Treaty, the EP had no power to amend or even block trade legislation. Although the exact scope of this competence is not spelled out in the Lisbon Treaty, it is clear that it covers a tremendous amount of the EU’s trade legislation, including legislation concerning preferences, trade defence instruments and other fair trade legislation such as the Trade Barriers Regulation.
Second, the EP’s consent is now required for ratification of treaties involving the common commercial policy which means that it has the power to block the conclusion of trade agreements. Prior to the entry into force of the Lisbon Treaty, the EP only had to be consulted before the conclusion of such agreements (although consent was required in some limited circumstances).
New exclusive EU competences, including foreign direct investment
The Lisbon Treaty expressly identifies foreign direct investment (FDI), commercial aspects of intellectual property and trade in services as areas of exclusive EU competence, i.e. areas where only the EU and not the Member States may act.
Prior to the entry into force of the Lisbon Treaty, the EU had competence with respect to market access investment issues, but not those relating to investment protection. Although FDI is not defined by the Lisbon Treaty, the Commission has taken the position that it extends to investment protection. If the Commission is correct, this means that the EU is now able to enter into treaties concerning such matters. Significantly, it also means that the Member States have lost their competence to negotiate, conclude and implement bilateral investment treaties (BITs) and other agreements concerning such matters. Considering that over 1000 BITs exist between Member States and third countries, this would be a significant shift in power. In the short term, it is expected that the EU will assert its investment protection competence by adopting legislation which brings existing Member State BITs into the EU legal framework. Over the medium to long term, the EU will likely negotiate and conclude new EU-wide agreements on such matters.
Prior to the entry into force of the Lisbon Treaty, the EU did have competences in intellectual property and services matters; however, its competences in those areas were shared with the Member States. This meant that treaties involving these areas had to be signed by EU Member States and ratified by national parliaments. Since these areas now fall within the exclusive competence of the EU, Member States no longer need to sign agreements in relation to these matters nor is ratification by national parliaments required. It should be noted, however, that sometimes treaties cover a wide range of issues. In cases where treaties touch upon non-trade issues falling within the competence of the Member States, their signature and ratification will still be needed.
New powers for the Commission in EU trade remedy matters
Changes brought about by the Lisbon Treaty will also potentially give the Commission significant additional powers in EU trade remedy matters.
Under the anti-dumping and other trade remedy rules currently in force, the Council is charged with adopting what are now called “implementing acts”, the most important of which are “new” anti-dumping measures. Thus, under current rules, anti-dumping duties may only be imposed in the first instance or extended beyond their initial period of application if the Council decides that the anti-dumping measures are warranted. In practice, the involvement of the Council often adds an unpredictable political element to EU anti-dumping decisions.
According to new rules introduced by the Lisbon Treaty, “implementing acts” may only be adopted by the Council in “duly justified cases” or other specifically enumerated situations. The term “duly justified cases” is not defined by the Lisbon Treaty. However, the Commission has taken the position that anti-dumping and other trade remedy decisions are not “duly justified cases”. As a result, the Commission has proposed that the competence for all such implementing acts be transferred to the Commission. If the Commission’s proposal is successful, this will result in significant new powers for the Commission in EU trade remedy matters. Member States are expected to oppose the Commission’s proposal. However, the EP (a new actor in EU trade relations) will probably support the Commission’s position.
If the Commission is able to successfully advocate its position, anti-dumping decision making procedures will only be revised following amendments to the EU trade remedy laws, including the basic anti-dumping regulation and other instruments. The process of amending these instruments is expected to take at least a few years. Therefore, even if the Lisbon Treaty requires the Council to give more power to the Commission in EU trade remedy matters, concrete changes will not likely take effect before 2013.