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29.4.2004

Comment on the EU-constitution and public services: Why the new proposal from the EU-presidency for article 217.4. in the EU-constitution must be rejected.


On 29th April 2004 the Irish presidency presented a new working document (CIG 73/04) for the Intergovernmental Conference negotiating the planned constitution for the European Union. The document includes an amended proposal for article III-217, on Common Commercial Policy. Given the profound implications for European public services of WTO-agreements and other international commitments the article is central to the quality of the EU-constitution from the point of view of general welfare policy.


Article III-217 (as proposed by the Irish EU Presidency on 29th April 2004)

" 1. The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union's external action.

2. European laws or framework laws shall establish the measures defining the framework for implementing the common commercial policy.

3. Where agreements with one or more States or international organisations need to be negotiated and concluded, the provisions of Article III-227 shall apply subject to the special provisions of this Article.

The Commission shall make recommendations to the Council of Ministers, which shall authorise the Commission to open the necessary negotiations. The Council and the Commission shall be responsible for ensuring that the agreements negotiated are compatible with internal Union policies and rules.

The Commission shall conduct these negotiations in consultation with a special committee appointed by the Council to assist the Commission in this task and within the framework of such directives as the Council may issue to it. The Commission shall report regularly to the special committee and to the European Parliament on the progress of negotiations.

4. For the negotiation and conclusion of the agreements referred to in paragraph 3, the Council shall act by qualified majority.

For the negotiation and conclusion of agreements in the fields of trade in services and the commercial aspects of intellectual property, as well as Foreign Direct Investment, the Council shall act unanimously where such agreements include provisions for which unanimity is required for the adoption of internal rules.

The Council shall also act unanimously for the negotiation and conclusion of agreements in the field of trade in cultural and audiovisual services, where these risk prejudicing the Union's cultural and linguistic diversity.

5. The negotiation and conclusion of international agreements in the field of transport shall be subject to the provisions of Section 7 of Chapter III of Title III and Article III 227.

6. The exercise of the competences conferred by this Article in the field of commercial policy shall not affect the delimitation of competences between the Union and the Member States, and shall not lead to harmonisation of legislative or regulatory provisions of Member States insofar as the Constitution excludes such harmonisation."


COMMENT AND ANALYSIS:

In the above version of article 217, para. 4. introduces some new restrictions to decision-making by majority as compared with the proposal from the Convention from July 2003. The mentioning of investments is a step forward but the safe-guards concerning public services in e.g. health, education, and the cultural and social sectors are weak. Finland has last autumn at the IGC tabled a significantly better proposal in this regard.

There are several problems with the Irish (CIG 73/04) formulation of the services exception. Some of them are:

1. With the new constitution welfare services (health, education, cultural and social services) are increasingly subject to decision making by majority voting on the inner market. Hence, the proposal from the Irish presidency shifts decision making regarding external trade in services - e.g. regarding GATS - to unanimity only to a small extent as compared with the proposal from the Convention of July 2003.

2. Through political processes and through new juridical means provided for in the constitution there can be an ongoing, peacemeal shift to majority voting regarding public services in the EU. The exceptions from majority rule provided for by the Irish proposal may easily be a sinking ship.

3. The Irish proposal effectively hands over the monitoring power to the commission. I.e. DG Trade would be in effective control of deciding whether unanimity is called for. (For those who remember how decisions for the new negotiation mandate for Cancun were made in July 2003 the political significance of this control of this should be obvious.)

4. The Irish proposal shifts competence regarding trade in welfare services to the Union exclusively. This is a big step compared with the Nice treaty. (In this regard, the Finnish and Swedish proposals also need amendment.) - NB: Competence is not the same as decision-maing rules: the proposed new regime eliminates the ratification procedure in member states!

5. The Irish proposal builds on the so called doctrine of parallelism. But the right place for this doctrine is in article I-12.. Neverthless, the Irish proposal does not help with regard to the tremendous and even bizarre enlargement of EU competence brought into the constitution through the " technical" change the commission brought to art I-12:2 on 25th Nov. 2003. (Here again, Finnish proposals to the better have not yet been successful enough.)

Helsinki, May 6th 2004
Thomas Wallgren
PhD, Docent, University lecturer, University of Helsinki
Senior fellow, Academy of Finland

(With thanks to friends in Finland who have contributed to the
above analysis.)