THE EU INSTITUTIONS AND THEIR MODUS OPERANDI IN THE WORLD TRADING SYSTEM

12 Colum. J. Eur. L. 125 (2005 – 2006)

Rafael Leal-Arcas, M.Phil, London School of Economics; LL.M., Columbia Law School; J.S.M., Stanford Law School; Ph.D. candidate, European University Institute, Florence. Formerly, consultant in the legal affairs division of the WTO Secretariat. Currently, Visiting Professor of EU law at the National Law School of India University, Bangalore (India).

This Article is an institutional analysis of the European Community’s (EC) decision-making process in trade policy by focusing on three variables, i.e., competence, control, and efficiency versus accountability at the national and supranational levels. The empirical background is the World Trade Organization (WTO), to which the EC and its Member States belong. The EU institutions and their interaction with EU Member States’ institutions and trade policy is the core of this Article. The problems that the enlarged EU will face in its internal decision-making process (such as transparency, efficiency, and accountability) can be paralleled to the WTO’s decision-making process, and thus the European experience can be used as a role or guidance in the WTO forum so that we can learn from the EC’s benefits and, more importantly, avoid the mistakes of the European experience in the decision-making process of international trade fora.

Particular attention is given to the role of the European Court of Justice (ECJ) in international trade. The EC’s specific problems and challenges for the ECJ are partly related to the EC’s position in the WTO. The new mechanisms introduced by the WTO Dispute Settlement Understanding are perhaps not comparable to the full judicial system within the EU, but they have changed both the rules and the legal culture concerning the adjudication and enforcement obligations. Although the WTO is still an intergovernmental organization, powerful private actors have already learned to manipulate the system to reach legal adjudication under the guise of intergovernmental disputes.

This Article concludes that the EC wants to deny “direct effect” to the WTO. We must aim at the creation of new standards to judge the applicability of international agreements; otherwise it will be a risk to the EC legal order by allowing policy makers to decide rather than the ECJ. The Article also concludes that EC trade policy, as well as WTO rules and policies, need to change to become more efficient and accountable at the same time as they address the issue of lack of transparency and legitimacy of the current system of governance, denounced by the Laeken European Council. Thus, more leadership is needed.