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1.6 Trade-related Laws and Regulations: EU vs. National Legislation

As already outlined above, external trade is regulated under the EU’s Common Commercial Policy (CCP). The key provisions of the CCP are contained in Articles 206-207 TFEU. Article 206 sets out the objective: “By establishing a customs union […] the Union shall contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and on foreign direct investment, and the lowering of customs barriers.”

The cornerstone of the CCP is Article 207 TFEU, which emphasises that the CCP shall be based on uniform principles, particularly in regard to changes in tariff rates, the conclusion of tariff and trade agreements, the achievement of uniformity in measures towards the liberalisation of export policy and in measures to protect trade such as those to be taken in the case of dumping or subsidies, among other principles.

Trade in goods falls unambiguously within the EU’s exclusive competence. Decision-making concerning trade in goods under Article 207 functions on the basis of qualified majority voting (QMV) in the Council. The Commission normally conducts negotiations in consultation with a special committee, appointed by the Council for this purpose. This committee is generally known and referred to as the Article 207 Committee.[6] Moreover, the Commission negotiates on behalf of the Member States in the WTO.

Due to the EU’s exclusive competence over trade in goods, no Member State may maintain its own trade legislation. Indeed, full responsibility for the CCP was transferred to the EU on 1 January 1970. As from this date, the EU has had exclusive power in the field of common commercial policy. Member States may neither conclude international agreements nor enact national commercial policy measures in this field. As emphasised by the Court of Justice, this consolidation of power in the hands of the EU prevents Member States from adopting positions different from those which the EU intends to adopt in relations with third countries.

Pursuant to its exclusive competence, the EU has developed a broad array of legislative instruments (regulations and trade agreements) in the trade sphere.

The most visible element of EU trade policy is the Common Customs Tariff (CCT).[7] Here, products imported into the EU are distinguished at the 8-digit level of the Combined Nomenclature (CN) which lists the duty rates applicable to each product. The customs authorities in all 27 Member States are obliged to impose the CCT on imports.

In addition to tariffs, the EU has traditionally made significant use of various non-tariff measures to restrict imports (although WTO rules have enforced a stricter discipline in their use, and some have already been phased out). Non-tariff barriers include quantitative restrictions but they also include regulatory barriers. Specific examples of the former include import quotas, voluntary export restraints and licensing, while examples of the latter include prohibitions for health and safety reasons. Anti-dumping, anti-subsidy and safeguard measures are another important form of trade instruments that lead to restrictions on trade and generally affect the whole EU.

 


[6] Occasionally, reference still may be seen to the "Article 133 Committee". This reflects the old numbering of articles in the EC Treaty, prior to the amendments made by the Lisbon Treaty.

[7] The tariffs for 2008 were published on 31 October 2007 by means of Commission Regulation 1214/2007 of 20 September 2007 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff.

Content provided by Hong Kong Trade Development Council
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