World Trade Organisation, WTO
- World Trade Organization headquarters in Geneva (Photo: World Trade Organisation)
The WTO, which replaced GATT, is tasked with organising world trade on free trade principles.
The EU is represented in WTO trade talks by the EU Commission and most EU positions are adopted by qualified majority. The Treaty of Nice calls for the use of qualified majority voting in all international agreements where the internal decisions relating to them are agreed by a qualified majority.
The derogations are very narrow for commercial aspects of intellectual property rights and health, education and services if the international agreement can "seriously desturb the national organisation" of that service.
The Lisbon Treaty offer the EU legal personality in Art. 47 TEU allowing the EU to enter into all kind of international agreements where the EU decide internally. The agreements are entered into according to Art. 207, 212.3 and 218 TFEU.
The Lisbon Treaty extend the scope for trade agreements to include direct foreign investments and trade with intellectual property.
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Factsheet
World Trade Organization (WTO) – Veto disappear By Jens-Peter BondeFormer MEP and President of the EU DemocratsAgreements in the World Trade Organization are negotiated by the European Commission under mandate from the Council of Ministers. Under the existing Nice Treaty the EU competence to enter into international agreements is parallel to the competence for internal legislation.
When the EU has the right to decide laws for the EU countries they have an automatic right to enter into international agreements as well. This principle follow from several court cases and it is now extended in the Lisbon Treaty as a general competence to enter into all kind of agreements with other states or organizations.
The entire new Union will become a so-called “legal person” according to Art. 47 TEU, giving the EU the competence to negotiate on behalf of all Member States. The procedures are laid down in the Lisbon Treaty in Arts. 206-207, 212 and 218 TFEU.
Commercial policy and the conclusion of commercial agreements will also be an exclusive Union competence according to Art. 3 TEU. Exclusive means that member states are only allowed to act if specially permitted by the Union. They can do nothing on their own. The competence will be fully lost by the Lisbon Treaty.
Under the Lisbon Treaty international trade agreements will normally be
decided in the EU by qualified majority. But an overall agreement may
still contain single topics for which unanimity is required or where the EU has no formal competence for internal legislation. In the latter case, the EU can then establish mixed agreements with the additional signatures of each member state and/or it can add an extra legal base, e.g. the flexibility clause of Art. 308 –Art. 352 in the Lisbon Treaty– requiring unanimity. The full treaties are then formalized by consensus in the Council.
This method has been used in the past because the EU Court did not give
the EU a specific competence to enter into agreements on intellectual
property rights. This fact from the past is now used by the Irish
government to guarantee Irish farmers a veto on the agricultural package in the ongoing Doha-round. This is wrong.
The government's statement supported by a declaration from the European
Commissions Dublin office is simply misleading for two different reasons. Inclusion of single topics requiring a unanimity decision in the EU for the next WTO agreement does not mean that member states can veto the parts being dealt with by qualified majority. Negotiations are prepared. The negotiating mandate for agriculture to the Commission can be established by qualified majority in the Council.
The Lisbon Treaty also contains more amendments in order to avoid the requirement of consensus and joint conclusions of mixed agreements with national co-signatures.
Trade agreements on the commercial aspects of intellectual property rights will not be a shared EU/Member State competence anymore. This change will simply outlaw the previous court decision on WTO and open for “exclusive” EU agreement including intellectual property rights. This is called “TRIPS” in WTO language.
There is a safeguard clause for unanimity when internal rules so require. But this clause can not be used for other aspects or for parts where the internal decisions in the EU can be dealt with by qualified majority.
Under the Doha round the TRIPS part only include matters which are dealt with by majority decisions in the EU. This is e.g. names for the origin of products where the EU position is decided by qualified majority. From this part of Doha there will come no veto to Ireland.
Then the Lisbon Treaty includes a safeguard clause for aspects of
services. It is possible to claim unanimity but only if a country can
prove that the national organization of the service in health, culture or education are “seriously disturbing the national organization” of that service.
“Seriously disturb” has to be accepted by the Commission or a qualified
majority - or unanimity - in the Council. No part of the Doha round
includes such services which could seriously disturb the national
organization of the services - in the eyes of the Commission or a
qualified majority in the Council.
The Commission has the monopoly of initiating this clause and will never allow a member state to block a whole Doha agreement on that reason. Particularly not if the real reason from the member state concerned is the agricultural part of the deal.
The major elements of WTO agreements are based on Treaty Articles where
all internal rules are decided by qualified majority. Here there is no
national veto. Agriculture is the clear-cut example where no member state can activate a veto, whether for internal rules or for international agreements in the WTO.
Until 1984 it would have been possible to activate a veto according to the so-called Luxembourg compromise. But this special type of veto has not been used successfully since the adoption of the Single European Act. And this political veto will by formally removed by the Lisbon Treaty establishing completely new voting rules.
The new rules can be upheld with the so-called new Ioannina compromise.
Here a blocking minority can upheld a decision for maybe three months. But no single country can block the vote according to the voting rules for ever.
If a member state sought to misuse its right to block a full WTO agreement by vetoing the full agreement because of elements which can be dealt with internally by qualified majority vote, the other Member States can just divide the agreement into two or more agreements where a qualified majority would bind all member states to the deal in the areas where the internal rules are decided by qualified majority.
For agriculture there is no veto at all – and even worse: The new Lisbon system of voting may kill the existing culture of consensus in the Council.
In the Nice Treaty there are still many areas requiring unanimity.
Countries are thereby depending on each other. If you bully me today, I
will bully you tomorrow. Since no one want to be bullied, the member
states often reach agreement by negotiating package deals which will have something for everyone.
The Lisbon Treaty will make the other member states independent of the
Irish voice in the EU in quite a new way. Ireland will lose 49 new areas for veto as well as Ireland’s permanent seat on the Commission, the body which has the monopoly of proposing negotiating mandates for the WTO.
Ireland will further erode the influence in the Council by reducing the
Irish share of the vote from 2% to 0.85 %. The Irish share in the blocking
minority will fall from 7.7 % today to 2.4 % after Lisbon. Germany’s
voting share will double because of its population size and the voting
share of France, the UK and Italy will increase by 50%.
Under Lisbon Germany, the UK and the other big Member States will dominate decision-making in the EU and also the international agreements that will be made by the EU in the WTO.
Given Ireland’s dependency on the ongoing WTO negotiations (being handled by the British Commissioner Peter Mandelson), it may be wise for everyone to wait at least for the approval of a WTO Treaty which can greatly reduce Irish influence on the daily lives of Irish farmers and other citizens.
There may be a veto on WTO issues today. But not under the Lisbon Treaty if you look carefully at the negotiating mandate from the Hong Kong meeting. There, I have found no single point requiring unanimity under Lisbon. Here I am not an expert and may lack knowledge from the secret negotiations and the secret negotiating mandates decided in the secret EU Council meetings.
If there are such points, the Irish government and the Commission should prove it instead of just safeguarding something they cannot guarantee from the articles in the Lisbon Treaty.
The Treaty is carefully drafted to avoid the unanimity requirements of the past. And much worse: In Art. 218.7 TFEU the Lisbon Treaty foresees
delegation of the competence to amend existing treaties to the non-elected Commission where there will no longer be members from all member states.
Other comments are welcome - send them to jp@bonde.dk
