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Trade | Brussels, 1 December 2009

Treaty of Lisbon enters into force – Implications for the EU’s trade policy

The Treaty of Lisbon enters into force today. The Treaty provides the EU with modern institutions and optimised working methods to tackle today’s challenges more effectively. It represents a major achievement for the European Union’s external relations with the creation of a European External Action Service headed by Catherine Ashton, High Representative and Vice-President of the Commission with responsibility for external relations. The European Commission will now move to implement the Lisbon Treaty, which has a significant impact on trade policy.

Three significant changes are made directly to trade policy in terms of institutional powers, competence and voting rules:

Role of the European Parliament

Lisbon empowers the European Parliament as a co-legislator with the Council (the Member States). This is a major change that improves the democratic legitimacy of the EU in an important policy area. Under the revised treaties: 

  • Parliament, together with the Council, adopts the legislation defining the framework for implementing the common commercial policy; and,
  • Parliament's consent is required for the ratification of all trade agreements.

Competence - Investment

In terms of new competences, the Lisbon Treaty explicitly mentions "foreign direct investment" as forming part of the EU common commercial policy. This includes investment protection. Explicit confirmation is provided that the common commercial policy is an area of exclusive EU competence. .

Voting rules

The Lisbon Treaty provides for qualified majority voting for all aspects of trade policy, except where:

  • Commitments on cultural and audiovisual services risk prejudicing the EU's cultural and linguistic diversity;
  • Commitments on social, educational or health services risk seriously disturbing the national organisation of such services and prejudicing the responsibility of Member States to deliver them; and,
  • Where unanimity is required for the adoption of internal rules.

BACKGROUND

The Treaty of Lisbon

The Treaty of Lisbon was signed by the Heads of State or Government of the 27 Member States in Lisbon on 13 December 2007. The last formal step for the Treaty of Lisbon to take effect was completed as the Czech Republic deposited its instruments of ratification in Rome. This cleared the way for the Treaty to enter into force on 1 December 2009. An extraordinary informal summit took place on 19 November in order to fill top EU posts created under the Treaty, namely the President of the European Council and the High Representative of the Union for Foreign Affairs and Security Policy. European leaders selected Belgian Prime Minister Herman Van Rompuy to be the European Council’s first permanent president. European trade commissioner Catherine Ashton was nominated as the next High Representative for the European Union's Foreign Affairs and Security Policy.

The European Union's trade policy

The European Union created a Common Commercial Policy to govern its trade relations with non-EU countries. The creation of a common commercial policy followed as a logical consequence of the formation of a customs union among its Member States. The European Union's trade policy therefore establishes common rules including, among others, a common customs tariff, a common import and export regime and the undertaking of uniform trade liberalization measures as well as trade defence instruments.

The Common Commercial Policy is explicitly placed under the exclusive competence of the Union (Article 3 of the Treaty of Lisbon). This confirms existing case-law of the European Court of Justice and means that the Union alone is able to legislate and conclude international agreements in this field.


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