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1.7 EU Institutions in Relation to Trade

1.7.1 The European Commission

There are currently 27 Commissioners since the enlargement of the EU on 1 January 2007, all of whom have to be independent beyond doubt, and none of whom can take instructions from any government or body. They are each in charge of particular policy areas and meet collectively as the College of Commissioners. The Commission is headed by a president, José Manuel Durão Barroso (of Portugal).

As part of the structural changes designed to make the institutions more flexible and able to adapt to enlargement, the Lisbon Treaty originally stated that the Commission, as of 2014, would be made up of 2 Commissioners for every 3 Member States. Commissioners would have been chosen based on a system of equal rotation between Member States, based on the principle of strict equality between the Member States for the order of rotation and time of presence. However, as part of a package of concessions made in order to ensure the ratification of the Lisbon Treaty by Ireland, the Council decided, in December 2008, to maintain the current allotment of one Commissioner per Member State for the foreseeable future.

The Commission’s staff of about 14,000 officials is mainly based in Brussels. The Commission is divided into departments known as Directorates-General (DG).The Trade DG is in charge of external economic relations. Within this DG, enforcement of the instruments of trade defence, for example, is entrusted to Directorate H (units H1 to H6).

As regards draft proposals for legislation, these emanate from lower parts of the hierarchy upwards to the College of Commissioners. The powers of the Commission (broadly described under Articles 244-250 TFEU) are legislative, administrative, executive and judicial:

  • Legislative: Most importantly, the Commission has the legislative initiative. The Council, or Council and European Parliament, enact laws from proposals made by the Commission, thereby fulfilling the legislative requirements of the Treaty.
  • Administrative: As for its administrative responsibilities, as policies and legislation have to be implemented, the Commission is the supervisor and overseer of such implementation in the Member States.
  • Executive powers in the sphere of external trade relations: The Commission conducts the EU’s trade relations. It represents and acts on behalf of the EU, for example, at WTO negotiations, or in anti-dumping investigations. It is also involved in informal bilateral exchanges – for example, with China, the US or Japan (e.g., over access to each other’s markets).
  • Judicial powers: Firstly, the Commission can bring actions against Member States who infringe EU law under Article 258 TFEU. Secondly, the Commission can investigate acts of wrong-doing, such as violations of the Treaty’s Articles by Member States or by private companies: the two most important areas are state aids and competition policy. The Commission also conducts the EU’s anti-dumping investigations on behalf of the EU industry. The Commission’s acts can be reviewed by the Court, normally the General Court (GC) which is attached to the European Court of Justice (ECJ).

1.7.2 The Council

The Council consists of a representative of each Member State at ministerial level who is authorised to commit or bind the government of that Member State. Thus, Council members are politicians rather than civil servants. In 1993, the Council decided that it would formally be known as the “Council of the European Union”. Council Meetings are normally arranged by subject matter, with the relevant Member State minister attending. There is thus, among others, the Environment Council dealing with environmental matters; the General Affairs Council (attended by the foreign ministers) dealing with external relations; and the ECOFIN council, dealing with e.g., economic and monetary union. There are approximately 100 Council meetings per year, mostly taking place in Brussels.

As regards the “Presidency” of the Council, the Presidency must be held by the Member States in turn, for 6 months each. The Presidency plays an important liaison role with the President of the Commission and of the European Parliament. Additionally, representatives of the Member State holding the presidency will meet regularly with representatives of the previous presidency and the upcoming presidency, in order to ensure continuity.

Article 240 TFEU states that the Committee of Permanent Representatives (Coreper) carries out the work and preparations of the Council. It is staffed by senior officials: permanent representatives of ambassadorial rank, and deputy permanent representatives, who are responsible for issues such as environment, social affairs, the Internal Market and transport. Coreper discusses legislative proposals from the Commission and provides important feedback to the Council. A large number of working groups – about 150 to 250 – will feed into Coreper at any one time. They examine legislative proposals from the Commission.

The Council’s main legislative function is that it must vote on Commission proposals for legislation before they become law. In the anti-dumping field, for instance, the Council is responsible for the adoption of final measures upon a proposal from the Commission. Safeguard measures instituted by the Commission may be appealed to the Council which has the power to repeal or amend them by qualified majority.

1.7.3 The European Parliament

The European Parliament’s plenary sessions are held in either Strasbourg (France) or Brussels. Since the most recent elections in 2009, the Parliament is composed of 736 members (MEPs). The European Parliament has experienced a transformation from a powerless assembly of the 1950s to the relatively powerful institution that it is today. Initially, it exercised only a consultative and supervisory role. It played no substantive legislative role. However, under the Single European Act in the late 1980s, it gained more legislative powers, and in the Treaty on European Union (the Maastricht Treaty), which introduced the co-decision procedure, it now has an important legislative role to play. The Amsterdam Treaty further extended the co-decision procedure to a wider range of policy areas, and the Treaty of Lisbon further extended the co-decision procedure, while also renaming it the "ordinary procedure".

The political group system in the European Parliament is unique: Instead of guarding national political interests, Members of Parliament (MEPs) from political parties across the EU come together in “supranational” groupings. Thus, for example, the largest grouping, which is the European People’s Party - European Democrats (EPP-ED - brings together 265 MEPs from all 27 EU Member States.

At present, there are seven political groupings in the European Parliament and 27 non-attached MEPs. The number of MEPs from each Member State in the current Parliament is provided in the table below:

Member State

Votes

1. Germany

99

2. France

72

3. UK

72

4. Italy

72

5. Spain

50

6. Poland

50

7. Romania

33

8. Netherlands

25

9. Belgium

22

10. Czech Republic

22

11. Greece

22

12. Hungary

22

13. Portugal

22

14. Sweden

18

15. Austria

17

16. Bulgaria

17

17. Denmark

13

18. Slovakia

13

19. Finland

13

20. Ireland

12

21. Lithuania

12

22. Latvia

8

23. Slovenia

7

24. Luxembourg

6

25. Cyprus

6

26. Estonia

6

27. Malta

5

Total

736

Under the Lisbon Treaty, this distribution of seats will be changed, as of the 2014 Parliamentary elections, to the following:

Member State

Votes

1. Germany

96

2 France

74

3. UK

73

4. Italy

73

5. Spain

54

6. Poland

51

7. Romania

33

8. Netherlands

26

9. Belgium

22

10. Czech Republic

22

11. Greece

22

12. Hungary

22

13. Portugal

22

14. Austria

19

15. Bulgaria

18

16. Sweden

20

17. Denmark

13

18. Slovakia

13

19. Finland

13

20. Ireland

12

21. Lithuania

12

22. Latvia

9

23. Slovenia

8

24. Luxembourg

6

25. Cyprus

6

26. Estonia

6

27. Malta

6

Total

750

In addition, one non-voting seat will go to the President of the Parliament.

Under the ordinary (previously known as co-decision) procedure, the European Parliament has the right to veto certain legislative acts proposed by the Commission and deliberated by the Council. The procedure covers proposed legislation in a number of areas important to Hong Kong traders exporting to the EU, namely, legislation concerning the functioning of the internal market, the environment, consumer policy and many aspects of the Common Commercial Policy. The European Parliament has traditionally been in favour of hard-hitting legislation protecting human health and the environment, thus conflicting with, and forcing significant compromises from, the Council. However, in recent years, partly due to more specialised and increased lobbying action in Brussels, industry has been gaining ground in the Parliament’s favour.

1.7.4 The European Court of Justice (ECJ) and The General Court (GC)

The GC is attached to the ECJ. The ECJ is the judicial branch of the EU. It has played its part in developing EU law, giving flesh and substance to the TFEU. It is a collection of individual judges, Advocates General and legal personnel. The ECJ can adjudicate on widely varying matters such as the proper division of powers between the Member States and the EU; competition policy, social policy, agriculture and transport. It decides cases between individual Member States and the EU Institutions, and cases referred from a national court.

The GC was established in 1988, by the Single European Act, in order to relieve some of the burden on the ECJ. It handles appeals in anti-dumping cases and cases brought by “non-privileged parties”, i.e. not the Member States and the Institutions. Hong Kong traders may already know that in order to bring a case before the EU Courts, the applicant must prove that he has sufficient standing (a concept that is harder to prove than in national courts). Thus, in an appeal against an anti-dumping duty, the applicant can challenge the measure provided that it is of direct and individual concern to him.

There may be an appeal on a point of law from the GC to the ECJ. There is no further appeal from judgments of the ECJ, which is the ultimate or supreme court of the EU.

1.7.5 Some Other European Bodies Relevant to Trade

a) CEN, CENELEC and ETSI

CEN is the European Committee for Standardisation. It was founded in 1961 by the national standards bodies in several European countries. CEN prepares voluntary technical standards in areas including environmental protection and the health and safety of consumers (e.g., regarding toys).

CENELEC, the European Committee for Electrotechnical Standardisation, was created in 1973. CENELEC is similar to CEN, but in the electrotechnical field. CENELEC’s mission is to prepare voluntary electrotechnical standards for electrical and electronic goods.

ETSI, the European Telecommunications Standards Institute, was founded in 1988 and produces standards related to telecommunications, broadcasting, and other electronic communications networks and services. 

The standards bodies are necessary for preparing Harmonised Standards under the so-called New Approach. The New Approach Directives present the legal requirements to be achieved in the form of Essential Health and Safety Requirements, with the detailed technical requirements removed. Instead, CEN, CENELEC, and ETSI are mandated by the Commission to prepare Harmonised Standards in support of these Directives. Hong Kong’s traders will be familiar with several of the New Approach Directives, e.g., the Directives on the safety of toys and the safety of electrical equipment.

Standards are also adopted under the Directive on General Product Safety, for products which are not covered by other specific directives. An example of such a product is cigarette lighters.

A “Harmonised Standard” is a standard relating to one or more directives that has been produced by CEN, CENELEC, or ETSI and has been published in the Official Journal of the European Union. Its use by manufacturers will provide a presumption of conformity with the Essential Requirements covered by the standard. Thus, in short, the relevant directives state the legal objectives to be met, while Harmonised Standards identify the technical means to meet these legal objectives.

Harmonised Standards are one way of meeting the Essential Requirements and are never intended to be mandatory. However compliance with them does give a presumption of conformity, and, conformity by any other means usually being more cumbersome and costly, traders generally prefer to make use of the Harmonised Standards.

Every New Approach Directive has a programme of standards associated with it. Details of existing standards, and work in progress of draft standards, can be obtained from the Commission’s New Approach programme website or the CEN, CENELEC and ETSI websites.

Should Hong Kong traders wish to obtain particular standards or draft standards, they may do this on payment of a fee via a CEN/CENELEC/ETSI national member. A full list of national members can be obtained using the following link: http://www.cenorm.be.

b) The European Trademark Office and The European Patent Office

The Office for Harmonisation in the Internal Market (OHIM) and the Community Trade Mark (CTM) were established in 1994. The OHIM’s task is to promote and manage trademarks and designs within the EU and, as part of this task, it registers CTMs. The CTM is a sign for identifying and distinguishing goods or services valid across the EU, registered with the OHIM in accordance with certain specified conditions.

Since its establishment, more than 200,000 companies from all over the world have come to the OHIM in order to get EU-wide legal protection for their trademarks. This success is attributable, in part, to the fact that both a CTM application and a CTM are valid in the EU as a whole: the application and the ensuing registration extend automatically to all 27 Member States. Furthermore, there is one single registration procedure, which is centrally handled by the OHIM. This means that no actions before the Member States’ industrial property offices are necessary.

In addition to its work managing EU trademarks, OHIM also regularly meets with foreign trademark bodies in an effort to harmonise industrial property classifications and rules. In particular, OHIM annually meets with its US and Japanese counterparts to discuss cooperation initiatives and is considering cooperating more closely with the Chinese Trademark Office to share information on IT issues and best practices.

As for patents, the European Patent Office is a pan-European body responsible for granting patents across Europe. Its primary purpose is the granting of a European patent. The Convention on the Grant of European Patents of 1973, commonly known as the European Patent Convention (EPC), is a multilateral treaty instituting the European Patent Organisation and providing an autonomous legal system according to which European patents are granted. One of the most important articles of the Convention, Article 52(1) on “Patentable inventions”, states that “European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step”. This comprises the basic patentability provision under the EPC.

The EPC, which is in force in 38 countries, provides a legal framework for the granting of patent protection in any participating countries designated by the applicant, via a single, harmonised procedure overseen by the European Patent Office. A single patent application may be filed, in English, French or German, at the European Patent Office in Munich, or at its branches in the Hague or in Berlin, or at a national patent office of a Contracting State, if the national law of the State so permits.

The cost for filing a European patent application varies according to the number of the States selected. Any payment of fees will take into account the fee for filing, the search fee, the translation and the costs for the arrangement of the application. After the research of novelty and the payment of the examination fee, the patent may be granted or rejected. If the patent is accepted, it will be necessary to file a translation in every selected State and pay the relevant fee. According to one expert commentary, the cost involved overall throughout the application procedures is roughly equivalent to the cost of obtaining separate national patents in three European countries.

The EPC is separate from the European Union. There is currently no single EU patent. Discussions have been ongoing for several years on introducing an EU patent. However, numerous delays and disagreements between Member States over the previous decade suggest that the creation of a single EU patent is unlikely to happen in the next several years.

Content provided by Hong Kong Trade Development Council
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