¹ For a sampling, see, e.g., the articles in Robert Keohane & Stanley Hoffman, The New European Community: Decision-making and Institutional Change (1991), Burley, Anne-Marie & Mattli, Walter, Europe Before the Court: A Political Theory of Legal Integration, 47 Int’l Org. 1 (1993)Google Scholar, and Pollack, Mark, Delegation, Agency and Agenda Setting in the European Community, 51 Int’l Org. 1, 99 (1997)CrossRefGoogle Scholar.

² See, e.g., Lobbying the European Union (R.H. Pedler & M.P.C.M. Van Schendelen eds., 1994); Organized Interests and the European Community (Justin Greenwood, Jurgen Grote & Karsten Ronit eds., 1992).

³ See, e.g., The European Community’s Commercial Policy After 1992: The Legal Dimension, (Mark Maresceau ed., 1993); I. Macleaod, I.D. Hendry & Stephen Hyett, The External Relations of the European Communities (1996).

⁴ ‘This work-in-progress’ findings are based on interviews with representatives of the European Commission, EU member state representatives, trade lawyers based in Brussels and representatives of trade associations who have been involved in the procedures described in the paper. The interviews complemented my review of relevant public documentation concerning the Market Access Strategy and the Trade Barrier Regulation, and their implementation.

⁵ The provisions of the Treaty of Rome, in Article 113, require decision making at higher political levels. This takes place when disputes are more politicized, as were the disputes over the United States’ Helms-Burton Act and the Iran and Libya Sanctions Act. The Helms-Burton Act is the popular name for the Cuban Liberty and Democratic Solidarity Act of 1996. The EU challenged provisions of the Act before the World Trade Organization, but suspended and then finally withdrew the procedure pursuant to ongoing discussions with the United States. The EU has threatened to bring a similar claim concerning the United States’ Iran and Libya Sanctions Act of 1996, sometimes referred to as the D’Amato Act after the New York Senator who sponsored it.

⁶ This is often referred to as a “neoliberal” orientation. The term neoliberal refers to a model of societal relations in which government regulation of trade is constrained in order to foster the play of market forces driven by private enterprises pursuing profit maximization. In a pure neoliberal model, these private enterprises have direct economic rights to bring claims against trade-regulatory barriers. While most countries do not grant private enterprises the right to bring claims under WTO rules within their jurisdictions, this paper shows how private enterprises can work with government representatives to pursue their interests through intergovernmental negotiations within the “shadow” of the WTO system.

⁷ Press conference of Nov. 12, 1996, http://europa.eu.int/en/comm/dgOl.

⁸ For a description of the EU’s reactive trade policy during the Uruguay Round negotiations, see the excellent overview of these negotiations in Hugo Paemen & Alexandra Bensch, From the GATT to the the Wto: The European Community in the Uruguay Round (1995) (describing how the EC often found itself reacting to US proposals as opposed to strategically advancing an organized EC agenda).

⁹ The EU Council, comprised of representatives of the fifteen EU member states, reserves the authority to authorize Commission actions pursuant to the Article 113 procedure, and has the authority to veto Commission decisions under the TBR procedure, described below. However, in practice, considerable authority has been delegated to the Commission under both of these procedures, as also described below.

¹⁰ Foreign trade barriers include any measure that directly or indirectly results in an impediment to trade. Tariffs and quotas are classic trade barriers. Less transparent trade barriers include internal taxes, which are neutral on their face but are applied principally to foreign imports, internal subsidies, technical standards, licensing requirements, inspections and similar measures that result in increased costs for foreign producers.

¹¹ The Market Access database is available on the Internet at http://mkaccdb.eu.int. The data was obtained in an interview with Dorian Prince, head of the Market Access Unit, on March 5, 1998. See also Sir Leon Brittan, opening address to the second symposium on the Market Access Strategy, “The EU’s Market Access Strategy: One Year On” (Nov. 4, 1997).

To some, the public nature of the EC database may recall the United States’ use of the “Super 301” and “Special 301” mechanisms under the US trade laws to highlight “priority” foreign trade practices and pressure foreign governments to remove them through threatening economic retaliation. The EC database, however is not accompanied by the build-up and media hype which surrounds the publication of the “Super 301” and “Special 301” lists once per year. Rather, it is an ongoing compilation of trade barriers which more closely resembles the US Department of Commerce’s new “Market Access and Compliance” service (see http://www.mac.doc.gov). While the Commission notifies the foreign government before adding the trade barrier to its database, and while it may use that opportunity to have the barrier removed, the primary reason for its notice is to ensure the accuracy of the barrier’s description before publication, further investigation and formal reference to the EC’s Member State representatives.

¹² Notification may occur through direct contact with the Market Access Unit or indirectly through a sector-specific or country desk within the Commission, through a member state ministry official, through a member state foreign embassy, or through one of the EU’s 126 foreign missions.

¹³ Brittan, supra note 12; Prince, supra note 12.

¹⁴ Prince, supra note 12. Prince remarked how the source of these queries demonstrates that the EU’s interests in foreign trade are much more varied than its traditional focus on agriculture, steel, textiles and other well-organized sectors.

¹⁵ Id.

¹⁶ Before consulting a foreign government, the Commission, for its own internal purposes, will analyze whether the alleged trade barrier is in violation of a provision of a WTO agreement or of one of the more than 100 bilateral and regional agreements signed by the EU.

¹⁷ The Commission investigation will typically be conducted by the Market Access Unit in an Article 113 proceeding, although other Units of DG1 could take primary responsibility. In a TBR case (described below), the Commission’s TBR unit conducts the investigation.

¹⁸ These are figures published on the WTO Web site as of March 16, 1998.

¹⁹ In foreign trade matters, the Council typically acts through the Foreign Affairs Council, which consists of the foreign affairs ministers of the fifteen member states.

²⁰ The EU institutions have exclusive competence over matters involving the sale of goods. However, the European Court of Justice’s Opinion 1/94 (World Trade Organization) (1994 E.C.R. I-5267, Nov. 15, 1994) holds that the member states retain competence over most matters covered by the WTO TRIPs (Trade Related Aspects of Intellectual Property Rights) and GATS (the General Agreement on Trade in Services) agreements. As regards trade in services, in broad terms, the member states retain competence to the extent the provision of the service requires a person to cross an EU border, which is usually the case.

²¹ The fifteen members of the Article 113 Committee are generally the most senior trade officials in the civil services of each of the fifteen member states. These representatives, referred to as “titulaires,” typically meet in Brussels once a month unless special meetings are called on important matters. Otherwise, lower-level officials from the member state trade ministries meet in Brussels on a weekly basis.

²² Decisions on Article 113 matters are, technically, to be made by the Council by “Qualified Majority Vote” (QMV). Under the EU system, votes on decisions to be taken by QMV are weighted per country, so that larger countries such as Germany have more votes than smaller ones. Article 148 of the Treaty of Rome, as amended, sets forth the number of votes each member state holds on the EU Council, and the number of votes required to adopt an act by QMV. Sixty-one out of a total of eighty-seven votes are required to pass an act by QMV following a Commission proposal.

²³ Interview on March 5, 1998 with Michael Johnson, a former Article 113 representative from the United Kingdom, now an international trade consultant with Malmgren Golt Kingston & Co. Ltd. in London.

²⁴ The Commission investigation, described above under the heading, “The EU’s Market Access Strategy,” permits the Commission to have detailed knowledge of the impact of the trade barrier in question. The Commission officials’ grasp of the underlying facts enhances their authority in discussions with the member state representatives on the Article 113 Committee.

²⁵ Prince, supra note 12.

²⁶ As the Commission works through its new database, the number of weekly referrals could decrease. The majority of these referrals are trade barriers that do not involve violations of WTO rules by WTO members. They will be the subject of future bilateral, regional and multilateral negotiations, as opposed to the filing of WTO complaints.

²⁷ Section 301 also creates a formal legal procedure pursuant to which businesses may petition governmental representatives to bring international claims on their behalf to challenge foreign trade barriers. The primary differences between Section 301 and the former NCPI and new TBR are the potential unilateral nature of Section 301 and its wider scope of coverage. First, Section 301 authorizes the United States Trade Representative (USTR) to implement unilateral measures in retaliation for foreign trade barriers, while TBR does not. TBR rather requires the Commission to initiate applicable international procedures. Historically, the filing of a Section 301 complaint thus posed a greater threat to a foreign government than a complaint filed in the EU. Given the changes in the WTO rules, however, this difference is less significant where the foreign government is a WTO member, because U.S. unilateral action may be constrained and the EU’s threat of a WTO action enhanced.

Second, while US Section 301 has abroad scope of coverage, the European Court of Justice held in its Opinion 1/94 that the individual Member States (and thus not the EC institutions) retain exclusive competence over most intellectual property and services issues covered by the WTO TRIPS and GATS agreements. (See supra note 21). In consequence, the TBR should not cover most intellectual property and services issues. However, in practice, two of the eight TBR complaints involve intellectual property claims and no Member State has challenged the Commission’s competence on these matters. The two cases are (i) a claim by French cognac producers against Brazil concerning lack of protection of their “appellation d’origin” (geographic indication rights), and (ii) a claim by an Irish copyright association, the Irish Music Rights Organization, against a section of the US Copyright Act which exempts shops, bars, restaurants and similar public places from having to pay royalties to performing rights organizations. This demonstrates once more how EC trade law “in action” can be quite different than the law in the books.

²⁸ The two rejected complaints were respectively made by FEDIOL (the European Seed Crushers’ and Oil Processors’ Federation) in 1989 (re Argentinian export restrictions on soya beans) and by SmithKline and French Laboratories Ltd in 1991 (re Jordan’s allegedly insufficient patent protection).

²⁹ See Commission Decision of Feb. 18, 1997 on the initiation of international consultation and dispute settlement procedure. 1997 O.J. (L 62) 43. The U.S. was requiring the products to be labeled “made in China” on the grounds that the finishing work conducted in Italy was insufficient for them to be labeled “made in Italy” (in legal terms, the test is whether the products have undergone a “substantial transformation,” the U.S. ruling that they had not). Such a labeling did not bode well for selling the silk products at luxury goods prices in the U.S. market.

³⁰ Interview with Mr. Tettamanti, a representative of Federtessile, Feb. 19, 1998.

^3l The legalistic nature and greater “transparency” of the TBR process, as compared to the Article 113 process, explains why more has been written on it than on the Article 113 procedure, even though the 113 procedure is used over 95 percent of the time. While practicing EU lawyers have written a number of articles on the NCPI and the TBR, they have written nothing on the Article 113 process. Even so, EU lawyers remain much less involved in the TBR process than U.S. lawyers in Section 301 proceedings.

³² Interview with Tettamanti, supra note 30.

³³ The Commission claims that the different voting rules can, in particular, benefit smaller enterprises whose trade problems may be economically insignificant for the EU, so that they would not be pursued through the “intergovernmental” Article 113 process. For instance, in the Italian silk case, the silk producers were not supported by EUROTEX, the Europe-wide textile trade association, because some of EUROTEX’s members would benefit from more stringent U.S. rules of origin. In particular, European weavers would benefit from more stringent U.S. rules of origin requiring more production processes to be completed in Europe in order for the end products to be labeled from a European country as opposed to China. Yet the Italian silk producers were nonetheless able to prevail through use of the TBR mechanism. Similarly, a TBR claim brought by the Irish Music Rights Organization involves not only a relatively minor amount of royalties but also an organization based on the periphery of the EU. These examples, however, could be symbolic to publicly demonstrate that the Commission respects smaller as well as larger commercial interests.

³⁴ Interview with Johnson, supra note 23.

³⁵ Seven of the eight TBR claims to date involve practices in countries in North and South America: three against the United States, three against Brazil and one against Argentina. This imbalance could result from the greater transparency of trade barriers in the Americas compared to those in Asia. The only TBR complaint brought against a country outside the Americas is against Japan and, interestingly, one of the grounds is a nonviolation nullification and impairment claim involving Japanese restrictive business practices.

³⁶ The TBR eases, in particular, standing requirements and requirements to prove “injury.” Under the NCPI, an enterprise had to demonstrate that it was acting “on behalf of an industry”in order to lodge a complaint. Under the TBR, an enterprise may now lodge a complaint on its own behalf. The injury requirement has been relaxed under the TBR to that of a “material impact on ... a sector or economic activity... of the Community or a region” (emphasis added). This is in contrast to the NCPI requirement to prove “injury” to a “Community industry.”

³⁷ Interview with Petros Sourmelis, Commission representative in the division of DGI responsible for overseeing TBR matters (Feb. 12, 1998). The complaint against the U. S. Antidumping Act of 1916 alleges that the Act violates GATT’s national treatment clause (Article III of GATT). The complaint against Argentina alleges that the restrictions violate Article XI of GATT 1994. The challenged Japanese practices include alleged illegal quotas, subsidies and restrictive business practices.

³⁸ Stewart, Alistair, Market Access: A European Community Instrument to Break Down Barriers to Trade, 4 Int’l Trade L. And Reg. 121, 123 (1996)Google Scholar.

³⁹ This fact is confirmed by lawyers and government officials in Washington and Brussels. One explanation for the difference is that EU enterprises have been less willing than U.S. firms to pay the significant legal fees resulting from the use of private counsel in these proceedings. European firms may be particularly hesitant to use private counsel given that, in an international dispute, the European Commission, and not their own lawyers, ultimately represents them. However, U.S. firms face this same dilemma. Another explanation is that, since European national traditions of public-private relations have been traditionally more corporatist or centralized than in the U.S. pluralist tradition, trade associations are more accustomed to directly working with public officials without the assistance of attorneys. As lobbying continues to develop in Brussels, and as the EU actively pursues trade claims pursuant to its Market Access Strategy, this difference could diminish. There are already some notable examples of EU lawyer participation. For example, Marco Bronckers, now of the Dutch firm Stibbe, Simont, Manahan, Duhot, was involved in a number of New Commercial Policy Instrument cases. He is currently representing Korea before a WTO panel in the case brought by the EC against Korea’s tax practices involving the alcoholic beverage soju.

⁴⁰ Japan—Taxes on Alcoholic Beverages, Report of the Appellate Body, 4 Oct. 1996. Can be obtained from the WTO website at http://www.wto.Org.

⁴¹ The EU first brought a complaint against Chile’s alleged discriminatory taxation of imported spirits on June 4, 1997. After Chile modified its internal tax regime, the EU brought a new complaint on Dec. 15, 1997, alleging that the modified law is still discriminatory in violation of Article 111(2) of GATT 1994.

⁴² As regards the two matters involving steel, one was brought against the United States, with the claim that its 1916 Antidumping Act is in contravention of the WTO Understanding on the application of antidumping measures, and the other against Brazil in respect of its import-licensing system. As regards the two matters involving leather, one was brought against Argentina and the other against Japan.

⁴³ The formal name of the French association of cognac producers is the Bureau National Interprofessional du Cognac (BNIC). The BNIC’s claim alleges, among other matters, that Brazil has failed to protect its geographical indication, known as an “appellation d’origin”, in breach of the WTO TRIPs Agreement. BNIC claims that Brazil permits local producers to sell an alcoholic beverage under the name of conhague. BNIC also maintains that its spirits are subject to a discriminatory tax rate in violation of Article III of GATT 1994. Interestingly, one of the first GATT cases, the 1949 case on “Brazilian Internal Taxes,” concerned, in part, a claim that Brazilian taxes on conhague were in violation of Article III. In defense, Brazil claimed that the products were “quite different from French cognac” so that there was no discrimination, a point that was accepted by the working parties (see GATT Doc. CP.3/42, 11/181, at par. 7 adopted June 30, 1949). (This point was made to me by Amelia PorgesoftheUSTR.)

⁴⁴ See, e.g., Ernst-Ulrich Petersmann, Constitutional Functions and Constitutional Problems of International Economic Law at 463 (1991 ) (asserting that lawyers should “recognize freedom of trade as a basic individual right”); Brand, Ronald, GATT and United States Trade Law: The Incomplete Implementation of Comparative Advantage Theory, 2 J. Legal Econ. 95–102 (1992)Google Scholar; and Is the WTO Dispute Settlement Mechanism Responsive to the Needs of the Traders? Would a System of Direct Action by Private Parties Yield Better Results?, 32 J. World Trade L. (1998)Google Scholar (transcript of a panel discussion of trade experts).

⁴⁵ The term self-executing is used in U.S. law and the term direct effect in EU law to denote provisions of supranational law that have direct legal effect in national law, so that they become part of, and may be invoked under, domestic law. The question of a provision’s direct effect is often divided into two subissues, one regarding the direct applicability of supranational law in the domestic setting, and the other involving standing (i.e., who may claim the benefit of the directly applicable provision). For example, Article 30 of the Treaty of Rome (which requires that all “quantitative restrictions on imports and all measures having equivalent effect... be prohibited between Member States”) has “direct effect” in all EU member states and can be invoked by private parties before national courts.

⁴⁶ By successful, I refer to cases in which a WTO panel finds that a foreign regulation constitutes a trade barrier in violation of WTO rules and the foreign government agrees to annul or amend the regulation to permit the effective importation of the goods or services in question.

⁴⁷ This process, however, calls into question other societal concerns. Unions, environmental organizations and other nonbusiness interests have quite different agendas in regard to the “effectiveness” of WTO rules. To defend their endeavors at the national and international level, environmental groups demand that the WTO decision-making process be made more transparent and that they be granted greater access to the WTO’s many fora. Only then can they advocate, albeit in a defensive posture, their positions with respect to domestic regulations that implicate both trade and nontrade societal interests. This is the subject of another project on which I am working. For a description of the factual and policy complexities of a dispute involving trade and environmental concerns, see Shaffer, Gregory, Alternative Outcomes to the WTO Shrimp-Turtle Dispute, 15 Int’l Trade Rep. (BNA) No. 7, at 294 (Feb. 18, 1998)Google Scholar.

⁴⁸ For the reasons described in the previous footnote, the WTO system will raise issues of deference to local decision making analogous to the issues of “subsidiarity” in the EU and of federalism in the United States.