The Conclusion and Implementation of the Uruguay Round Results by the European Community

Pieter J. Kuijper¹

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I. Introduction

The conclusion and the implementation of the Uruguay Round by the European Community proved to be an arduous and long drawn-out operation. In particular the conclusion of the WTO Agreement and its Annexes,² caused fundamental legal problems related to the division of powers between the Community and the Member States, the relation between treaty law and Community law and the position of the Community in the WTO. Finally, an Opinion of the Court, discussed elsewhere in this issue, was necessary to find a solution for certain differences that had arisen between the Commission and the Member States in the Council. It was also the first time that the European Parliament played an important role in the approval of the results of a trade negotiations round.

For these reasons this contribution focuses its attention on important aspects of the procedure leading up to formal conclusion of the Uruguay Round Agreements by the Community, including the role of the European Parliament. Although the implementation package contains interesting regulations, in particular the new so-called `trade barriers instrument' - the successor to the new commercial policy instrument - only a brief factual summary of the implementation package will be given.

The troubles surrounding the conclusion of the Uruguay Round were of a double nature: they sprouted from the external aspects of the new EC market organization for bananas - which will not be further discussed here³ -, and they flowed from institutional problems between Commission and Member States about the position of the latter in the new WTO. Briefly stated, the question was whether all of the subject matter of the WTO was covered by exclusive Community competence, primarily under the common commercial policy (Article 113 EC Treaty), or not. The Commission was of the first view - which logically would lead to the Community alone becoming a Member of the WTO. Almost all of the Member States and the Council did not agree and believed that the WTO Agreement covered important subjects which had remained within the Member States' power, and thus should be concluded as a mixed agreement.

A serious and open discussion about this question was probably avoided for too long. Even when, in an effort to clear the air with the Member States, Sir Leon Brittan, the Commissioner for foreign trade relations of the Community, announced in early November of 1993 that all decisions during the last stages of the Uruguay Round negotiations should be taken unanimously and that Member States should be Members of the future WTO next to the Community, in the same way as Member States and the Commission had functioned alongside one another in the GATT, the Commission did not succeed in clearly conveying the implications of this statement to the Member States in the Council.

To the Commission this meant that, though the Member States would be Members of the WTO, most, if not all, matters treated in the WTO would come under Community discipline, according to Article 113 of the EC Treaty,⁴ as had been the case with most matters in the GATT.⁵ Obviously the Member States had more restrictive views of the scope of matters treated in the WTO, which would come under the discipline of Article 113, arguing that the GATS and the TRIPS Agreement were largely within Member State competence. Moreover, the repeated strong statements of the Commission about the Community's exclusive competence in WTO matters, although intended to reaffirm Community discipline within a mixed membership WTO, often sounded to many Member States as if the Commission wanted to keep Member States out of the WTO, even after Sir Leon had made it clear that this was not the case. Hence the recurring accusations against the Commission that it had a hidden agenda.

This was a problem inherent in the Commission's position that continued to haunt it throughout the procedure of conclusion and implementation of the WTO Agreement and its Annexes, and in the defence of its position in the request for Opinion 1/94 before the Court. The Commission's assertion that the Community was competent across the board for WTO matters created the impression - at best - that Member States would be WTO Members not in order to grant them any actual powers but merely for reasons of political expediency. Member States chafed at that, because many suspected, and rightly so, that this was only too true for the actual situation in GATT.⁶ Most Member States did not want to see such a situation recreated in WTO and hence insisted strongly on their own competences in the fields of services and TRIPS. This again created great anxiety on the part of the Commission, where such insistence on extensive Member State powers was seen as a wanton attempt to destroy the strong position the Community - and therefore the Commission - had traditionally occupied in the GATT. It was feared to be an attempt to shift their position in this field to one more similar to that which they held in the FAO or the Law of the Sea Convention.⁷ That is to say a situation in which the Community is barely tolerated by third States and its own Member States as a Member of the organization, where constant explanations of, and declarations on Community competence have to be given vis-à-vis third States and where internal quarrels about Community competence in respect of different points on the agenda of the organization are often drawn out so long as to make it impossible to make a meaningful, or even any, statement on the Community position for lack of time.⁸

It must be clear by now that the positions adopted by the two sides inexorably led to misunderstandings and constant doubt about the other side's true motives. It is perhaps testimony to the solidity of the Community system that it proved possible to finalize the Uruguay Round and to arrive at a satisfactory result, not least because it was possible to canalize many of the underlying problems into the procedure to request Opinion 1/94 before the Court.⁹

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1 Legal Adviser, Commission of the European Communities, specially charged with GATT and WTO matters. This contribution has been written in his personal capacity. It was completed during a stay as EC fellow and visiting professor to the University of Michigan Law School.

2 For the structure of the WTO Agreement and the contents of its Annexes see the contribution of Petersmann in this issue, at 161.

3 See the contribution by Hilf in this issue, at 245.

4 In the interpretation of the Court of Justice of the EC Art. 113 gives exclusive power in the field of commercial policy to the Community, see Opinion 1/75, [1975] ECR 1355.

5 In GATT the Member States de facto had some liberty of action outside Community discipline only in the sector of budgetary and administrative matters.

6 The continued independent action of the Member States in respect of budget and administration had no serious foundation in law, as appears clearly ex post facto from Opinion 1/94, point 19-21.

7 For a critical comment of the Law of the Sea Convention's arrangements for `regional economic integration organizations', see Simmonds, `The Community's Declaration upon Signature of the UN Convention on the Law of the Sea', CML Rev. (1986) 521-544. On the FAO, Frid, `The European Economic Community, A Member of a Specialized Agency of the United Nations', EJIL (1993) 239-255.

8 The manner in which the Member States treat well-established Community powers in the framework of the FAO is exemplified by the way they have treated a fisheries agreement concluded within the framework of the FAO, see Case 25/94, Commission v. Council (pending).

9 Rereading accounts of the implementation of the Tokyo Round, one is struck by the statement that the two Legal Services co-operated in interpreting how Opinion 1/78 should be applied to the Tokyo Round results. Nothing of the kind has happened after Opinion 1/94, see Louis, `The European Economic Community and the Implementation of the Tokyo Round Results', in J.H. Jackson, J.-V. Louis, M. Matsushita (eds), Implementing the Tokyo Round (1984) 21-76, at 36-37.

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