The EU and the adoption of Free Trade Agreements (FTAs): heading towards a vetocracy?

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 by Francisco Pereira Coutinho, Professor at the NOVA Law School, UNL

Few would disagree that signing free trade agreements (FTAs) is one of the raisons d ´être of the European Union (EU). As the United Kingdom will probably discover after leaving the EU, the bargaining power of a State, even a member of the G8, is far inferior to that of the world largest economy, which is also the one that most imports, exports, receives and sends foreign direct investment. Ever since the Rome Treaty (1957) granted ius tractum to the European Economic Community, dozens of FTAs were adopted. The latter are pivotal to the European economy: around 31 million employments in the EU (1/7 of the total) depend, direct or indirectly, from the external trade.

The Lisbon Treaty broadened the legal capacity of the EU to adopt ‘new generation’ FTAs, which are trade agreements which contains, in addition to the classical provisions on the reduction of customs duties and of non-tariff barriers to trade in goods and services, provisions on various matters related to trade, such as intellectual property protection, investment, public procurement, competition and sustainable development (ECJ, Opinion 2/15, para. 17).

The Comprehensive Economic and Trade Agreement (CETA) is a ´new generation’ bilateral FTA that was signed on 30 October 2016 between Canada, of one part, and the EU and the Member States, of the other part. It is expected to increase EU-Canada trade in goods and services by 23% and boost EU GDP by about €12 billion a year.
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The Customs Union – an island under construction?

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 by Andreia Barbosa, PhD student at the Law School of UMinho

“No country is an island”[i]. It is an idea that is entirely valid in the context of the European Union and is particularly relevant in the area of ​​the Customs Union. Although the European Union represents only 6.9% of the world’s population, the volume of trade with the rest of the world corresponds to approximately 20% of the volume of world exports and imports[ii].

In fact, and in order to meet the characteristics that have been identified as necessary for a perfect Customs Union, there can be no frontiers among the Member States, although their territories may be separated by sea.

In particular, in the field of the European Union, the levying of customs duties between Member States no longer makes sense in view of the establishment of the internal market. Thus, the 1957 Treaty of Rome prohibited customs duties and charges having equivalent effect in trade between Member States. A Customs Union emerged, where national borders were replaced by the limits of the customs territory of the Union.

It happens that the Customs Union is not – and cannot be – an island. Commercial contact with the rest of the world is essential for the very survival of the Member States, making it reasonable that trade with third countries is sometimes facilitated, in approximate terms to those that exist internally. Free trade agreements are particularly important in this area.
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