Can the abusive exercise of a –procedural- right constitute an abuse of dominant position?

Danai FATI, 10/05/2017

Introduction

The aim of this contribution is to cast light on a development characterizing competition law, namely the newly emerged category of ‘procedural abuses’ conducted by dominant undertakings in the EU’s internal market. The adjective ‘procedural’ is meant to show that the abuse is essentially linked to the abusive use of a procedure, be that administrative or judicial.

Article 102 of the Treaty on the Functioning of the European Union (hereafter TFEU) stipulates that “any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.

The decisional practice of the European Commission together with the confirmation given by the European Court of Justice (hereafter ECJ) in the Huawei case (C-170/13), reflect a new tendency in the boundaries of competition law. These boundaries are now being tested as a dominant company may be found to be breaching EU Competition law and particularly Art. 102 TFEU, not because of some conduct it held in the market but because it has exercised one of its procedural rights in an abusive way.

Background

The discussion on the emergence of procedural abuses was sparked by the judgment of the ECJ in the Huawei case, rendered a couple of summers ago. In a nutshell, Huawei is high-tech company active in the telecoms market, which developed a patent concerning the mobile network communications. Huawei’s technology was then incorporated in the establishment of a technical standard. To give a short insight to readers not familiar with the standard setting process, various market players of an industry, such as manufacturers, network operators, service providers and others, may decide to come together and through a standard setting body to set out some common technical standards for the manufacturing of complementary products. The development of standards can be very beneficial as it ensures that different products, for example a smartphone and headsets, produced by different companies are technically compatible and interoperable. When a company gives its patent to be part of a standard (called Standard Essential Patent or SEP), it also makes a commitment to grant licenses of its intellectual property (IP) to third parties who want to use that standard. The license must be offered by the SEP holder on FRAND terms, meaning on terms which are Fair, Reasonable and Non-Discriminatory. This commitment is offered in advance so to avoid that the IP holder, whose patent has been used in a standard, can misuse its power and lock-in third parties by refusing to grant them license or by granting it only in an excessive rate.

Huawei, as a SEP holder, and ZTE, the company seeking a license, failed to reach an agreement on the FRAND terms and thus Huawei refused to grant license to ZTE. Huawei then decided to initiate legal proceedings before national courts seeking for injunctions against ZTE, who had started using that SEP.

On examining the facts, the Court found that Huawei had abused its dominant position by bringing an action seeking an injunction prohibiting the use of its patent.  Of course, the finding of an abuse was subject to strict conditions set out by the Court. What is striking, however, and constitutes the essence of the case, is that a company which is dominant may see, under certain conditions and within a context, its right to have access to justice being restricted on the basis of competition law. The case introduces the idea that the exercise of the right of access to justice, now also enshrined in Art. 47 of the Charter of Fundamental Rights of the European Union, may constitute an abuse of dominant position. In other words, the –abusive- use of a procedure, a judicial one in this case, may constitute an abuse of dominant position.

However, how ‘new’ is this finding and where does it come from?

The emergence of ‘procedural abuses’ as a distinct type of abuse

The idea that a use of a procedure in an abusive way may trigger the application competition law and Art. 102 TFEU, may not come as such a surprise if one closely follows the decisional practice of the Commission and the Court in the past. Studying the relevant case-law shows that the judgment in Huawei case cannot be regarded as an isolated incident. In fact, the Commission had the occasion to talk about the possibility of new types of practices falling under Ar.102 some years ago following the Commission’s Sector Inquiry in the Pharmaceutical sector. There the Commission found evidence which seemed to suggest that dominant pharmaceutical companies might be using a variety of -in principle legal- instruments with the aim to block or delay competition in the market. Indicatively, such practices may consist in patent filing strategies, recourse to litigation by dominant originator companies to delay generics, settlements between originators and generics over patents in the context of litigation or the intervention of originators in the process of market authorization of generics medicine. On the first reading, all these practices do not seem to entail any illegal behavior. In fact, quite the opposite; Settling in litigation is absolutely legitimate. Recourse to litigation, as enforcement of IP rights, is a fundamental tool to oppose infringements for their holders (on an EU level with regard to the enforcement of IP rights, the Enforcement Directive 2004/48 aims to ensure a common high and equivalent level of protection in the internal market). Therefore, what the Commission suggests is that although the use of all those procedures is legitimate they can be abusively used, be they administrative as is the case of patent filling before national or European patent offices, or judicial as is the case of bringing an action before court or the settling in a context of litigation with the opponent.

It is apparent from the analysis just above, that the abuse of a dominant position which is linked to an abuse of a procedure, does not necessarily only refer to the initiation by a dominant company of legal proceedings before courts (for seeking injunctions in the context of a SEP whereby the patent holder has undertaken to grand license under FRAND terms). In fact, there are other types of procedures which can be misused with the aim to exclude competitors and which can thus constitute a competition law infringement. This is not just theoretical; the case-law of the Commission and the Court have already paved the way. Based on the analysis of existing case-law, the procedural abuses identified so far can be summarized in three main categories: a) misusing an administrative patent filing process, b) settlements in litigation and c) bringing an action seeking injunctions (in a SEP context, as in the Huawei case). Let’s take a closer look to each of those practices and see how they ended up being caught under art. 102 TFEU.

  1. a) Filing a patent as an abuse of dominance

How bad can the filing of a patent be? The Commission had from very early on the opportunity to establish in the Astra Zeneca case (COMP/37.507, 15/6/2005) that the misuse of an administrative procedure regarding the filing of a patent before a patent office can amount to an abuse of dominant position. And the Commission’s position was well upheld by the ECJ (C-457/10P). Astra Zeneca was a pharma company which had a acquired a patent for the drug ‘Losec’. The company was found to have abused its dominant position by abusing public procedures to exclude or delay generic companies’ drugs to enter the market. More in detail, Astra Zeneca gave misleading information to several national patent offices which resulted in the company gaining extended patent protection for Losec, whose patent was about to expire. Based on the applicable procedure at the time, the patent office was not expected to make a substantive evaluation of the data provided but essentially relied on the information given by Astra Zeneca. In addition, the company misused the national procedures applied by the national medicine agencies when issuing market authorizations for drugs, by selectively deregistering the market authorizations for Losec capsules, with the aim to delay the authorization and marketing of generic drugs. At the time, a generic medicine could be imported and traded only if an original medicine was already authorized in that country. So by deregistering the original drug, Astra Zeneca was misusing a (patent-related) process to exclude competitors who could have entered the market with cheaper generic medicine, benefiting health systems and consumers.

One could of course say that this finding was subject to the special circumstances of the case, relating to the area of IP sand to the fact that the public authorities had no discretion to evaluate the validity of the information provided by the undertaking so to grant the patent. However, the principle was set out: the abusive use of a procedure can now also bring antitrust liability.

  1. b) Settlements in courts between competitors as an abuse of dominance

As seen in the Huawei case, analyzed above, the right of access to a judge is a constituent part of the right of effective judicial protection, a right protected at an international level through the European Charter of Human Rights, at an EU level through the Charter of Fundamental Rights of the EU, and also at a national level of the EU member states. But this did not restrict the Commission and the ECJ from holding that when Huawei exercised that right by initiating proceedings in national courts against a competitor, it was abusing its dominant position. Something different but closely related occurred in the Servier case (AT 39612, 9/07/2014), decided by the Commission in 2014.

Servier is a French drug company producing the bestselling blood pressure drug, perindopril. Servier was found to have abused its dominant position by entering into the so called “pay-for-delay” settlements with four generic companies within the context of litigation before national courts. In a nutshell, the abuse consisted in the fact that Servier, who had initiated proceedings against the generic companies claiming they were breaching its patent rights, proposed and signed settlements with the defendants whereby it agreed to pay them a fee in return for their commitment not to enter or delay their entry in the market. These are also known as reverse payment settlements, as normally it is the generic companies who pay the originator of a drug for the damages caused to him from infringing its patent. However, here, the originator pays the generic companies to extract their consent to delay introducing their competing drug in the market. The rational for condemning the company based on competition law was that Servier had used a chain of settlement agreements (an utterly legitimate judicial procedure in principle) to delay the generic companies from entering the market and thus to protect itself against competition. In other words, it was established that a judicial procedure, commonly available, was used in an abusive way, aiming not at ensuring the plaintiff’s rights protection, but as a targeted strategy to exclude competitors. That conclusion was of course subject to the exceptional circumstances found on that case; Servier had initiated the legal proceedings against four generic companies and was a common subject in all four settlements (that showing the anti-competitive exclusionary strategy), that the settlements were part of a single strategy (to keep competitors out of the market) and that the chain of settlements was self-reinforcing.

To be noted that an appeal against the Commission’s decision is currently pending before the EU General Court (T-691/14).

 

  1. c) Initiating legal proceedings before courts as an abuse of dominance

As already discussed above, the idea that an abusive exercise of the right to have access to justice may amount to a competition law infringement, was recently established by the ECJ in the summer 2015 in the Huawei case. However, this is not actually an entirely novel idea; the Commission had opened the door with a couple of decisions that had preceded.

In 2014, the Commission issued two decisions, again both emerging in the area of IP, one against Motorola and the other against Samsung. The facts of both cases were quite similar, pertaining on the fact that these two undertakings, each holding a dominant position, had abusively exercised their right to recourse to justice by seeking injunctions against their competitors. To use Motorola case as an example, the company had filed an action seeking injunctions alleging that its competitor, which happened to be Apple, had infringed its SEP-patent by using its patent without paying royalties since the parties had not succeeded in agreeing on the FRAND terms for its licensing. The Commission, however, underlined that since Motorola’s patent referred to a SEP, the undertaking had committed to grant a license to its competitors under FRAND terms. Therefore, seeking now injunctions against Apple for the use of the SEP could be regarded as an abusive exercise of that right and also an abuse of dominant position, especially in light of the fact that “Apple was not unwilling to agree on a license on FRAND terms”. That conclusion was of course subject to certain conditions and the Commission developed a detailed procedure which needs to be followed by the SEP holder in order to avoid being caught under 102 TFEU. The procedure, essentially, aims to ensure that the parties enter into genuine negotiations for the FRAND terms, with good faith and according to the standard commercial practice of the field. Despite the strict conditions established by the Commission and the ‘exceptional circumstances’ of the case at hand, one being the existence of a SEP and a preexisting commitment by the IP proprietor to grant licence to its competitors, the principle was spelled out by the Commission: the abusive exercise of the right of access to justice may amount to a competition law infringement. It is interesting to note that Motorola and Samsung were Commission decisions and their reasoning and conclusion had not been confirmed by the Court since those cases never reached the ECJ. This is why the Court’s ruling in the Huawei case was a stepping stone, being the first instance where the ECJ established the principle.

 

Conclusions

The analysis above shows that the Commission and the Court have established a new concept according to which the abusive exercise of a right can amount to an abuse of dominant position. And this is how the ‘procedural abuses’ were born.

Although, the concept of an abusive exercise of a right is well established in national jurisdictions and commonly prohibited on the basis of civil law provisions, one may wonder on the necessity of the use of competition law on such an occasion. The essential factor triggering the application of competition law seems to be the exclusionary intention of the dominant company when exercising its rights to have recourse to administrative procedures or litigation. Meaning that, instead of using a procedure as a means to assert its rights, the dominant company resorts to procedures with a view of making it more difficult or impossible for competitors to enter the market and compete.

It is important to note, however, that the new category of procedural abuses seems to have risen in the area of intellectual property and this is something to be taken into account when one assesses that legal development. And both the Commission and the Court have underlined the relevance of the ‘particular circumstances’ which were present in all the cases where an abuse was established. Therefore, the approach followed can be better understood if put in the context of the Commission’s agenda as regards the enforcement of competition law in the area of IP. As competition law stands today regarding the interplay between competition law and IP, dominant companies which are IPR holders should be vigilant of the case-law analyzed above if they want to avoid antitrust liability.

The bottom line is that in the EU, the balance to be struck between the need to ensure appropriate remuneration of IPR holders and the need to avoid abusive recourse to procedures or litigation, seems to end up in curtailing the IPR holders’ room for maneuver.

 

Danai FATI held the post of Academic Assistant in the Law Department of the College of Europe, specialising in competition law issues. She is also an alumna of the Havel Promotion. 

 

Down with the ‘Bogeyman’: Why Protests and Marches Against Trump Are Missing the Target

 

Women's March

Participants to the Women’s March on Washington, 21 January 2017

 

Tommaso EMILIANI

 

Trump Inauguration Day on the 20th of January was marked by widespread protests around the world, with two millions of pacific demonstrators worldwide taking the streets to rally against the newly installed administration. Political protests reached their apogee with the so-called Women’s March on Washington, which gathered more than 470.000 women (and men) to denounce the President’s worrying agenda on civil rights – starting with the restriction of women’s control over their own bodies.  While protesting against a Weltanschauung so blatantly opposed to the values of gender and social equality is not only a good thing but also a true civic duty, the current mainstream framing of American politics appears quite peculiar.

Liberal media across the world unanimously hailed to the ‘resistance’ opposed by peaceful demonstrators against the advance of right-wing populism embodied by Trump. Media coverage significantly abstained from a firm condemnation of the riots that resulted in at least 217 arrests for the clashes between demonstrators and the police. As if violence were somehow justified by its ultimate target, namely undermining Trump’s legitimacy. In this regard, it is quite interesting to observe reactions of European media to the unrest created by this ‘Black Bloc’ – an expression that is European in its essence, having being invented in Germany in 1980 to label Berlin squatters involved in violent clashes with the police. While, for instance, European liberal outlets had no problems with evoking the Black Bloc threat in occasion of the clashes between the No Border movement and the Austrian police at Brennero, or for the demonstrations against the loi travail in Paris, riots in Washington received a rather different coverage. Burning bins and broken windows were regarded as the product of ‘America’s political division’, and violent perpetrators as ‘American demonstrators’ . Little reference was made to ‘guerrilla-like scenarios’ or ‘Russian infiltrators’ this time. European liberal media seemed to suggest that yes, violent protestors exaggerated, but: “hey, this is what you get when people have enough of dictators”. The ‘Liberal Bloc’, they seemed to say, brings more good than evil to the cause of the free world.

The huge impact of such a narrative appears in all its evidence when one compares audiences’ reaction to two recent viral videos featuring naïve individuals advocating violence in different contexts. In the first one, a Baltimore woman angrily slaps her son in order to remove him from the riots that ensued the death of the African-American Freddie Gray at the hands of the local police department. In the second, a Washington youngster brags about starting a small fire because: “I’m saying ‘screw our President’”. The Baltimore boy was immediately shamed on the internet and on television, while his mother became a celebrity and was praised as ‘mom of the year’. The Washington kid, on the other hand, raised to the status of public hero on social media and was called ‘a legend’ for his actions.

Unanimous condemnation of Trump by liberal media on the left and on the right mirrors the dismay of a Trans-Atlantic political elites that do not miss a chance to express their discomfort with the new President. This transversal alliance against the man considered to be the source of all problems reminds closely of the united front created in the early 2000s in Italy to counter Silvio Berlusconi’s political raise. In both occasions, liberals identified in the ‘anti-democratic’ practices of the leader the biggest threats to an open society. What they failed and keep failing to acknowledge was that acute social crisis brought about by liberal globalism, that disenfranchised wide sections of the middle class throwing them into poverty and moral humiliation.

The liberal world struggles to grasp the nature of the beast. In a desperate search for landmarks, it is waging war against the only enemy it can make sense of, that is, a slightly less liberal version of itself. Hence, the media reaction to Melania Trump’s expression during the Inauguration Ceremony, to the lack of taste of the presidential gift to Michelle Obama, and to the alleged good prospects for Barron Trump to evolve into a “homeschool shooter”.

All this also leaves the awkward impression that there would have been no Women’s March without Trump, nor protests or clashes, as if structural racial and gender inequality in the U.S. would have disappeared with the election of Hillary Clinton. No protests, for instance, surrounded Clinton’s campaign, although she voted for the 2006 Secure Fence Act Mr. Trump refers to when he speaks about building a wall at the border with Mexico.

The paradox is that an anti-Trump front composed by a mainly white, educated bourgeoisie takes the street to protest against that fraction of America’s (female and male) white, economically privileged population that Trump embodies, with both sides completely forgetting that many of Trump’s voters are to be found among those discriminated people that liberals claim to support. The Women’s March – with, on the one side, female CEOs subsiding employees’ attendance and, on the other side, Black Lives Matter activists recusing the initiative – accounts as a perfect example for the paradox. Very few representatives of the African-American and Latin communities, as well as the so-called ‘white trash’, could be found among the pussy hats that demonstrated for equality.

While liberals worldwide fight against what Donald Trump represents, they keep ignoring who he does represent. Which is, to a great extent, large sections of a deluded middle class that globalisation and thirty years of neo-liberal policies have pushed down to the redneck ranks. These people will hardly listen to those who preach social inclusion and offer an historicised and literate version of feminism. Rather, they found in Trump’s assertive campaign those promises of enduring resilience to globalisation they were denied by the Republican and Democratic establishment alike.

By demonising the Donald Trump parvenu and neglecting the structural issues affecting U.S. society, organisers of protests and marches that look up at the French strike model may be missing the target. Instead, they might look at Spain for inspiration. The Iberian country is one of the few in the West to have so far escaped from the rise of a strong right-wing populism. Among the other factors, analysts have identified a lack of fundamental conflict between natives and non-natives over welfare resources to account for the absence of a significant racist rhetoric in politics.

A fairer redistribution of resources among the population – this was the notable stone guest at the Washington protests.

 

Tommaso Emiliani is an IRD Academic Assistant at the College of Europe in Bruges and an alumnus of Falcone & Borsellino promotion at the College of Europe in Natolin.

The author wishes to thank the ‘Militant’ collective for the inspiration to write this article.

Much Ado about Labeling: EU’s guidelines on the products imported from Israeli settlements

 

Israeli minister Ofir Akunis said Europeans lost sight of "terrorism of extremist Islam" by focusing on boycotting Israeli goods.

Israeli minister Ofir Akunis said Europeans lost sight of “terrorism of extremist Islam” by focusing on boycotting Israeli goods.

Sante FIORELLINI 12/01/2017

 

In November 2015, the European Commission issued an interpretative notice on the “indication of origin of goods from the territories occupied by Israel since June 1967”. The document, formally related to customer protection, is drafted so as to sound non-political and unbiased; yet, it bears a remarkable diplomatic weight. It is in fact aimed at responding to Benjamin Netanyahu’s government policy of building Israeli settlements outside Israel’s recognized borders, an agenda widely regarded by the international community as being in stark contrast with international law and already condemned by the United Nations Security Council (UNSC) Resolution 2234 as recently as December 2016. This intervention will cover the main points of the document and its consequences for the EU-Israel relations.

In spite of its ambitious political intentions, it is appropriate to start with highlighting the (limited) scope of this interpretative notice, which is, giving guidelines to the Member States on how to apply existing EU legislation on product labeling. In other words, the EU recommends avoiding the label “Made in Israel” for goods produced in the occupied territories should be avoided, in favor of expressions such as “Made in the West Bank (Israeli settlement)”. However, the responsibility to implement said indication rests solely on the member states. It is worth noting that United Kingdom, Belgium and Denmark had adopted similar rules even before the the issuing of the Commission guidelines.

Second, the document only concerns those goods produced in the settlements to be exported to the EU (mainly grapes and dates, wine, poultry, honey, olive oil, and cosmetics). According to the Israeli Ministry of Economy, their value amounts to a mere €45 millions, a drop in the ocean of the €30 billions total value of Israeli exports to the EU.

Third, the EU identified as occupied territories the Gaza Strip, the West Bank including East Jerusalem, and the Golan Heights. Interestingly, the latter, annexed from war-ridden Syria, were not mentioned by the above mentioned UNSC Resolution. Commentators close to Israel, such as Eugene Kontorovich, felt that the mention of the Golan Heights accounted for clear evidence of EU’s real intention, namely, to indiscriminately sanction the state of Israel.

Finally, and most importantly, labeling products from the settlements is not the same as declaring them illegal, as the EU is not imposing a ban on their import.

It is clear that the document has a mere symbolic value: it neither affects Israel’s economy, nor it changes the existing agreements between the two parties, or really affects the situation on the ground.

As predicted, Israeli firms were barely touched by the Commission policy: since it was implemented only Ahava, a multinational cosmetics company, decided to relocate out of the West Bank – and the correlation with the EU labeling policy is dubious at best, as it was already facing financial difficulties prior to the issuing of the Commission notice, and it ended up selling its shares to a Chinese investment group soon afterwards.

Still, Israel’s response was quite assertive, to the point of chilling down diplomatic contacts with the EU. Amongst other reasons, Netanyahu, acting as interim Minister of Foreign Affairs, lamented EU’s double standard vis-à-vis Israel compared to other conflicts. A questionable argument, as the EU, simply does not have “one standard” and decides its position on a case-by-case basis, taking into account both international law and political opportunity. For instance, it can be argued that, on the one side, it quietly acquiesced to Moroccan’s control over Western Sahara, and it is not involved in the Chinese-Tibetan issue, while, on the other side, it banned any import of goods from Crimea and Sevastopol carrying the label “Made in Russia”.

Nevertheless, Netanyahu’s decision to play hardball over the document paid off, as he won the diplomatic standoff. In fact, more than a year later, EU’s expectations crushed under the weight of pragmatism and political divisions. If anything, the document served an unintended purpose: highlighting and exacerbating EU’s internal rifts. The majority of the member states essentially ignored the guidelines, while Hungary, Czech Republic and Greece openly opposed them. With these premises, in February 2016, the EU and Israel resumed talks through a phone call between Netanyahu and Federica Mogherini. The High Representative stressed that the implementation of the guidelines depends exclusively on the member states: implicitly, the EU admitted that it doesn’t have the political power to propose further restrictive measures. Overall, if the objective was to put pressure on the settlement policy, it certainly failed.

At the time of writing, only one country implemented the guidelines: France, in November 2016.

The Israeli-Palestinian peace process goes into 2017 with no progresses between an increasingly assertive Israeli government and an increasingly weak Palestinian leadership, with the issue slowly fading out of the international agenda. The EU, for its part, after the labeling guidelines’ blunder, is in search of a new role: a first indication of the Union’s intentions will come from the Middle East Peace Conference, to be held in Paris on January 15.

 

Sante Fiorellini is an IRD student from the Keynes Promotion.

 

SOURCES:

Vince Chadwick, Maia De la Baume, “How one phrase divided the EU and Israel”, Politico, 04/01/16, available at: http://www.politico.eu/article/best-before-1967-how-the-eu-labeled-israels-occupied-territories-food-labels-european-commission/

Eugene Kontorovich, “The ‘true origins’ of the E.U.’s Israel labeling policy”, The Washington Post, 16/11/2015https://www.washingtonpost.com/news/volokh-conspiracy/wp/2015/11/16/the-true-origins-of-the-e-u-s-israel-labeling-policy/

Hugh Lovatt, “EU differentiation and the push for peace in Israel-Palestine”, European Council on Foreign Relations, 31/10/16, available at: http://www.ecfr.eu/publications/summary/eu_differentiation_and_the_push_for_peace_in_israel_palestine7163#a4

Steven Schefer, “Israel fumes over planned EU labeling of ‘settlement’ products”, Reuters, 10/11/15, available at: http://www.reuters.com/article/us-israel-eu-labelling-idUSKCN0SZ21120151110

EU Trade Policy-Making: “The Times They Are A Changin’”

 

State of play & Perspectives

industry-438428_1920

The twilight of EU trade policy ?

Nicolas RENARD, 13/12/2016.

With Brexit, the CETA[ii] saga and the election of Donald Trump in the US, future is not looking good for EU common commercial policy (CCP) and we should really start asking ourselves if times are changing for EU trade. In this article, I analyze the consequences of the ‘CETA saga’. I will not discuss the content of the agreement, such as the controversial ISDS mechanism, but rather focus on the trade policy-making process itself. To broaden the debate, I will try to draw up a state of play, capture the current trends and go over some perspectives for EU trade policy.

  • At the basis of trade policy making in the EU

First, the basics – how does the EU negotiate trade agreements? According to the Treaties, Member States (MS), through the Council[iii], authorize the European Commission (EC) to start and conduct the negotiations while the Council monitors the talks before voting to sign and conclude the deals. With the entry into force of the Lisbon Treaty in 2009[iv], trade was reinforced as an exclusive competence of the EU, encompassing new areas such as services, investment, etc. In theory, with those new areas covered by EU’s exclusive competence, the conclusion of free trade agreements (FTAs) cannot be blocked by MS or depend on the ratification by 28 national parliaments. The EU – which has legal personality – has the full powers to sign trade agreements.

In practice, two kinds of FTAs can be distinguished[v]: regular trade agreements covering exclusive EU competences, and ‘mixed’ agreements. So called ‘mixed-agreements’ have a much broader coverage – encompassing not only EU exclusive competences but also shared and even MS exclusive competences – and thus require a different legal basis. Mixed-agreements need to be signed, concluded and ratified by both Member States – and thus national parliaments – and the EU. According to the Treaties and practice, they can be provisionally applied – i.e. before ratification by the national parliaments. Though, a recent decision of the German Constitutional Court stated that national Parliaments, despite signature by the EU Council and their government, could veto the ratification process and thus block its conclusion.

If the distinction between regular and mixed trade agreements may appear evident, here comes the tricky part: there are no references to those ‘mixed-agreements’ in EU Treaties. Hence, “the choice of the proper legal basis of an agreement is often controversial”[vi]. In fact, a highly expected ECJ decision on the EU-Singapore FTA[vii] should clarify how to determine the nature of trade agreements – i.e. which part of an agreement can be considered as ‘mixed’.

In recent years, the EU has been negotiating more and more ambitious trade agreements, so called ‘comprehensive free trade agreements’, not only focusing on removing tariffs for goods but also including trade-related areas (or WTO + issues) such as investment, public procurement, sustainable development in the negotiations. The majority of recent EU “new generation” FTAs are thus considered as ‘mixed agreements’ – despite Lisbon’s developments – and MS are increasingly interfering with EC’s prerogative. That’s precisely what is happening with CETA.

  • The ‘CETA saga’ and its consequences on trade policy making

The ‘CETA saga’

About a month ago, the EU and Canada finally signed the CETA, after months of uncertainty. At one point, after having vetoed the signature of the agreement by Belgium and thus the EU[viii], Wallonia’s representatives started negotiating directly with Canada trade representatives, a grande première in the history of EU trade policy-making.

How did we end up here? A few months ago, pressured by MS, the EC stated that CETA should be considered as a mixed-agreement – and thus would have to be signed and ratified by both the 28 MS and the EU. As a result, we ended up with one region, Wallonia, representing only 0.45% of EU trade with Canada[ix], blocking the EC, the Council, and the whole ratification process.

Finally, the CETA was signed at the EU-Canada Summit on 30 October 2016, after the Walloon government negotiated the inclusion of an intra-Belgium Statement and a Joint interpretative declaration, putting a (very) temporary end to the ‘CETA saga’.

Consequences on EU trade policy-making

As Politico puts it, it seems that “Wallonia sends EU trade policy back to the drawing board”. Of course it might be a bit too soon to scrap EU trade policy and its policy-making processes, but it is true that doubts are raising and the CETA/TTIP saga won’t go without consequences[x].

Indeed, not only it reveals “Treaties’ structural flaws” but it can be analyzed as a major step back for EU trade policy-making. First, as recalled above, trade policy has historically been a core exclusive competence of the EU – even more with the Lisbon Treaty: “The origins of the EU’s role as an international actor lie the CCP”[xi]. Of course, the balance between supranationalism and intergovernmentalism has always been sensitive (and the distribution of competences a controversial process, inherent to the construction of the EU itself) but this episode illustrates how MS are increasingly and dangerously pressing to retake trade power over the EC. The risks being that they will use it as a bargaining chip as well as for domestic purposes unrelated to trade.

Secondly, it can also be perceived, especially from the point of view of our trade partners, as a blow to EU trade power. It questions EU’s ability to negotiate and conclude trade deals. The EU is often perceived as a “trade power”, thanks to its economic and trading weight, but also as a power “in” and “through” trade[xii]. Indeed, this ‘economic power’ gives the EU the possibility to be heard on the international scene and to influence its partners. The fact of not being able to secure and conclude trade deals, mainly because of internal disputes, will most certainly affect on-going and future negotiations[xiii]. Wolfgang Münchau from the Financial Times, even states that the “CETA debacle heralds a period of disintegration for the EU”.

In addition to the above structural and internal challenges, it is interesting to rise above the clouds and take some time to analyze the global trends and current factors affecting the EU and its trade policy:

  • A shifting trade strategy: For a long time, the EU had privileged the forum offered by the WTO. However, the successive failures of the negotiations in the framework of the Doha Round, within an organization crystallizing tensions and rivalries between ‘developed’ and ‘developing’ countries, set up a new deal and forced the EU to adopt a “second-best” approach. In fact, since the mid-2000s, EU’s approach to promote its economic, regulatory and political agenda has evolved. Focusing at first on regional agreements, it currently mainly negotiates free trade agreements (FTAs) bilaterally. The “new generation” FTAs mentioned above fall within this trend.
  • A global trade slow-down: Recent reports from the ECB and the IMF have shown that trade growth has been “dangerously” slowing down since 2012. If the IMF attributes this trend mainly to the decline in investment[xiv], the ECB isolated two main types of factors: (1) “compositional factors” such as “shifts in the geographical, sectoral and demand composition of global activity”; (2) structural factors such as the slowing growth in the global value chains, the rising protectionism – also within the EU – and “a declining marginal impact of financial deepening”. On the other hand, some economists such as Daniel Gros welcome this slowdown as an opportunity to end the dangerous “hyper-globalisation narrative”.
  • Other clouds include the dragging debate on the modernization of EU trade defense instruments, linked to the debate on whether or not to grant China Market Economy Status. As Charles De Marcilly writes, it is about “showing [EU’s] ability to protect itself by using adapted instruments”[xv].
  • But certainly, the main ‘threat’ for EU trade policy comes from the peoples themselves and the increasing inequalities dividing our societies. It is essential to differentiate the sound questioning of mega-trade deals such as CETA and TTIP by citizens and Civil Society Organizations (CSO) – partly explained by an opposition to an “unstoppable globalization”, unregulated finance and multinationals – from the rise of euro-skepticism and populism “giving voice to the anger of the excluded” as Dani Rodrik warns[xvi].

The first embodies the increasing need for transparency and involvement of civil society in the policy-making process to ensure public understanding and support. Certainly, the EC is well aware of this and multiplies public consultations, impact assessments, dialogues, etc. With a rising impact of public opinion on EU trade policy-making[xvii], EU institutions need to step up the pace – starting with a coherent communication strategy for the EC (especially on values, standards and norms), questioning of MS inconsistencies at the Council and greater implication of the European Parliament.

The second, pushing forward a fierce opposition to free trade liberalism and globalization leads to national downturn, economic protectionism and isolationism. Brexit and the election of Donald Trump, two dramatic results of this (economic) disintegration trend, will certainly have a dreadful impact on EU trade policy.

  • Perspectives: What’s next for the EU trade policy-making process?
  1. Re-focus on core trade competencies? The EC could limit future negotiations and deals to ‘regular’ trade areas such as trade barriers and tariffs. It would mean the end of mega-trade agreements. In the current global context, it though seems unlikely and dangerous for the EU to leave out WTO+ and WTO-X areas[xx].
  1. Adjust the trade policy-making process?
    • Two-track trade agreements as a pragmatic second-best solution? MEPs such as Daniel Caspary and Manfred Weber came up with an alternative path: negotiating two-track trade agreements. At the first level, the EC would have full competencies whereas at the second level, MS and national parliaments would have their say and the ability to veto.
    • For Guillaume Van Der Loo, an alternative solution could be to require unanimity for Council’s decisions and votes on trade. Replacing the Qualified Majority Voting (QMV) rule “could mitigate the risk that a member state will hold an FTA hostage for domestic (non-trade related) reasons”.
    • David KLEIMANN and Gesa KÜBEK see democratic representation as EU’s main weakness and suggest three policy recommendations: (1) strengthen the role of national parliaments; (2) “strengthen the democratic capacity of the European Parliament”; (3) restore public trust in the European Commission[xxi].
  1. Re-build the CCP? Some MS and national politicians are asking for a CCP reform addressing the “democratic need”[xxii]. Exclusive trade powers could be withdrawn from the EC so that national parliaments and “regional powers” would also have the ability to negotiate. Wallonia also unveiled its own proposal for a new way to negotiate trade agreements, based on three clusters: “Respect for democratic procedures”, “Compliance with socio-economic, sanitary end environmental legislation”, and “Guarantee of public interest in the dispute resolution mechanism”.

A key question remains: would national political stakeholders, CSO and citizens throw themselves into less mediatised and ‘ideological’ trade agreements? Despite foreseeing similar provisions to CETA, EU-Japan FTA negotiations could be concluded in the months to come without any questioning. Moreover, avoiding that one country could block the whole negotiating process with domestic issues, and preventing national interests from interfering with the general interest – aren’t they the reasons why trade policy-making power was transferred to the EC in the first place?

In any case, many of these proposals could not happen without a reform of the Treaties, which is very difficult to foresee in the months – or even years – to come; not to mention that they could further weaken EU’s trade “power”. Maybe one additional option could be to go for WTO again? Although very unlikely, a multilateral system of governance remains the first-best solution for gathering EU’s and its partners’ trade and global interests[xxiii].

***

Trade policy, one of the symbols of EU integration and MS delegation of power to the EC, is going through difficult times. It is clear that the trade policy-making process needs to fully integrate all stakeholders from the very beginning and address their fears so as to regain public support and legitimacy; which is essential to its success. But this should not mean to renationalize trade policy or “politicize” the policy-making process by involving national parliaments. This is especially vital as, while ‘hyper-globalisation’ should give way to a more “moderate globalization[xxiv], EU trade policy weakening also means that the EU could lose part of its “normative power” in the promotion of high standards and regulatory rules[xxv].

 

Nicolas Renard – Falcone & Borsellino promotion (IRD 2014 – 2015) – works as Project Manager, notably in trade and private sector development (Brussels – nicolas.renard@coleurope.eu). 

 

References

BENDINI Roberto, “The Future of the EU trade”, European Parliament, DG EXPO/B/PolDep/Note/2015_227, July 2015

DE MARCILLY Charles, “Confronted by internal challenges, an ambitious trade policy is compromised”, Fondation Robert Schuman, European Issues n°407, 18 October 2016

GSTÖHL Sieglinde, “The European Union’s Trade Policy”, Ritsumeikan International Affairs, vol. 11, 2013, pp. 1-22

GSTÖHL Sieglinde & Dominik HANF, “The EU’s Post-Lisbon Free Trade Agreements: Commercial Interests in a Changing Constitutional Context”, European Law Journal, vol. 20, no. 6, 2014, pp. 733-748

Keukeleire  Stephan & Tom Delreux, The Foreign Policy of the European Union, Basingstoke, Palgrave Macmillan, 2nd Edition, 2014

KLEIMANN David & Gesa KÜBEK, “The Signing, Provisional Application, and Conclusion of Trade and Investment Agreements in the EU The Case of CETA and Opinion 2/15”, EUI Working Papers, RSCAS 2016/58

MEUNIER Sophie & Kalypso NICOLAÏDIS, “The European Union as a Conflicted Trade Power”, Journal of European Public Policy, vol. 13, no. 6, 2006, pp. 906-925

POLITICO, “Is free trade dead?”, Symposium Politico, 7 October 2016

PUCCIO Laura, “A guide to EU procedures for the conclusion of international trade agreements”, European Parliament, Briefing, October 2016

RENARD Nicolas, “Is ‘Green’ Really the Colour? Protecting the Environment through Trade Policy: EU’s Biased and Uncertain Approach”, Master Thesis, College of Europe, May 2015

TAYLOR Paul, “Europe’s trade genie is out of the bottle”, POLITICO, 24 October 2016

VAN DER LOO Guillaume & Jacques PELKMANS, Does Wallonia’s veto of CETA spell the beginning of the end of EU trade policy?, CEPS, CEPS Commentary, 20 October 20016

VAN DER LOO Guillaume, CETA’s signature: 38 statements, a joint interpretative instrument and an uncertain future, CEPS, CEPS Commentary, 31 October 20016

VAN DER MAREL Erik, “Why concluding CETA is so important for the EU”, ECIPE, ECIPE Bulletin No. 2/2016

VON DER BUCHARD Hans, MARKS Simon and MUCCI Alberto, “Wallonia sends EU trade policy back to the drawing board”, POLITICO, 24 October 2016

 

[i]The Times They Are A-Changin’”, song written by Bob Dylan, 1964.

[ii]Comprehensive Economic and Trade Agreement (CETA)

[iii]aka. the Council of the European Union

[iv]The Lisbon Treaty also gave increasing powers to the European Parliaments (EP) which now has a “veto-power” on the adoption of trade agreements. Also more implicated during the negotiations, this is leading to an increasing “politicization” of trade negotiations but also guarantees a better integration of civil society.

[v]For clarity reasons, I differentiate here two kinds of FTAs: regular and mixed-agreements. In reality, “three types of trade-related agreements can be distinguished: trade, cooperation and association agreements”. See Sieglinde GSTÖHL & Dominik HANF.

[vi]Ibid.

[vii]Follow the case here or here.

[viii]Considered as a mixed agreement covering areas such as agriculture, non-tariff barriers, services, public procurement, investments, IPR, competition policy with a disputes settlement mechanism, CETA required unanimity at the Council for the adoption of the decision concluding the agreement. For Belgium to be able to ratify the agreement, Belgium federal entities first had to allow it.

[ix] For more figures on EU-Canada trade, see Bruegel’s blog post.

[x] On the contrary some analysts see it as a “stand for democracy” and a lesson to meditate, putting its consequences into perspective.

[xi]Stephan KEUKELEIRE & Tom DELREUX, p. 200.

[xii]Sophie MEUNIER & Kalypso NICOLAÏDIS, pp. 906-925.

[xiii]In fact, concrete consequences of the ‘CETA saga’ can already be observed. Vietnam, with whom FTA negotiations were concluded in January 2016, will send its ambassador to address Walloon parliamentarians in order to avoid a similar blockage.

[xiv]For the IMF, other factors include the rise of protectionist measures, the decline in the growth of global value chains and the evolving nature of demand for ‘non tradables’.

[xv] Charles DE MARCILLY, p. 5.

[xvi] Here a selection of articles on “anti-globalization” from Project Syndicate. Also read Bjørn LOMBORG’s opinion on “the free-trade miracle” and Paola SUBACCHI “Free Trade in Chains” from Project Syndicate. Dani RODRICK states that we shouldn’t “cry over dead trade agreements”.

[xvii] It is interesting to note the relative lack of academic studies on the link between ‘public opinion’ and trade policy. Understanding its role/impact on the policy-making process but also analyzing how to better inform and increase citizens’ participation is, I believe, essential to ‘solve’ the legitimacy and democratic crisis.

[xviii] On Brexit, also read Simon EVENETT, “Are trade agreements passé? Deal-making after Brexit”, published on http://www.ictsd.org/, 19 July 2016.

[xix] Also read “Trumping Trade”, a review of economists’ assessments on Trump’s trade policy proposals during the campaign, written by Silvia MERLER for Bruegel, 3 October 2016. “Europe in the Trumpworld: EU trade and security under the new US executive” by Fredrik ERIXON and Hosuk LEE-MAKIYAMA for the ECIPE.

[xx] See “Beyond the WTO? An anatomy of EU and US preferential trade agreements” by Henrik HORN, Petros C. MAVROIDIS and André SAPIR, for a distinction between trade-related areas.

[xxi] David KLEIMANN & Gesa KÜBEK, “The Signing, Provisional Application, and Conclusion of Trade and Investment Agreements in the EU The Case of CETA and Opinion 2/15”, EUI Working Papers, RSCAS 2016/58

[xxii] http://www.lemonde.fr/economie-mondiale/article/2016/11/08/apres-le-psychodrame-du-ceta-la-france-veut-reformer-la-politique-commerciale-europeenne_5027649_1656941.html

[xxiii] See Wade JACOBY and Sophie MEUNIER, “Europe and the management of globalization”, Journal of European Public Policy, vol. 17, n°3, pp. 299-317.Also, “Mega-regional Trade Agreements: Implications for the African, Caribbean and Pacific Countries” by Peter DRAPER, ECIPE, April 2014. On the state of play at the WTO, read Ricardo MELÉNDEZ-ORTIZ, “What’s ahead for the WTO: Looking around the corner and beyond”, published Voxeu.org, 26 July 2016.

[xxiv] Also read Paul DE GRAUWE, “How far should we push globalisation?”, CEPS Commentaries, 4 November 2016.

[xxv] As a complementary point of view, read MEP Bernd LANGE’s opinion in Politico, 14 November 2016.

Ukraine, the EU and the colorful materialization of misunderstanding

Political reflections on ‘your little Europe in the Kyiv metropolis

Picture: Colorful houses, Comfort Town, Kyiv, Ukraine by Stephen Rush, photo taken on November 3, 2012

Picture: Colorful houses, Comfort Town, Kyiv, Ukraine by Stephen Rush, photo taken on November 3, 2012

David Lodder, 18 November 2016. Originally published on www.natolinblog.com.

Comfort Town is an overly colorful city within a city that promises its inhabitants ‘the real European experience’. In reality the fenced off neighborhood and its alleged 5000 happy families achieve the direct opposite of this goal. They reveal the misinterpretation of a European Union that seems both incredibly close and very far away.

 

What is it that supposedly makes this little oasis on the eastern bank of the Dnepr so European? A long description on the website of the residential complex crowns the non-functional red windmill in front of a bright yellow flat as the symbol of the European conception according to which the town was build. Viktor, a middle-aged resident enjoying the afternoon in the park, chose to move to Comfort Town because “it’s a residential complex of a closed type and of a European type”. A more profound explanation of its European’ character can be found among the many pictures, stories and interviews featured on the website. Safety, color, an easy life and child friendly utilities seem to be the most dominant elements. Olena Yermakova, a Ukrainian student at the College of Europe in Warsaw provides us with a more straightforward answer: “The Ukrainian perspective of ‘European’ comprises that which is not Soviet”. What makes Europe so desirable is not something concrete and tangible, it is determined by its contrast with the relics of a very recent past. Moving away from modern housing into the realm of political considerations, this includes ideas of democratic values, economic prosperity and progressive values.

These strong, often dichotomous perceptions of the EU reached their height during the Revolution of Dignity on the Maidan Square in 2014. The organizers of the protest utilized the European flag as a symbol of freedom and democratic liberty as opposed to the semi-authoritarian rule of Yanukovych. By contrast, in his ‘Ukraine Diaries[1]’ Andrej Kurkov explains how at the same time the anti-European Ukrainian Choice movement managed to persuade many Ukrainians that closer association with the European Union would lead to a universal conversion to homosexuality. Where the last claim is not difficult to debunk, the former seems more deeply rooted in both the convictions of many young Ukrainians as well as in the external communication strategy of the European Union itself. Notwithstanding the political and economic achievements of decades of European integration, to declare the project as an ultimate democratic success seems somehow premature. With record-low electoral participation, what many see as democratic back sliding in Poland and Hungary and increasing dissatisfaction with the unfairly distributed advantages brought about by European integration, it seems there is still quite some trouble in ‘paradise’.

Democratic disillusion

One could ask why defining a somewhat overly glorified goal to strive for should be criticized. The fact that it can motivate an otherwise politically less active community to work together to change the status-quo can only be applauded.  The danger lies in the disillusion that follows the confrontation with a reality that will never be able to live up to the ideal that inspired it. The Russian poet and dissident Joseph Brodsky accurately describes a similar quick succession feeling of high expectations and consequent disillusion among dissidents in the USSR: “Hopelessly cut off from the rest of the world, they thought that at least that world was like themselves; now they know that it is like the others, only better dressed”[2]. Even though the context might be different, there is an increasing risk that the young Ukrainians who turned their hopeful gaze to the West will cultivate a similar feeling of disillusion with the pace and depth of the European project.

The mutual idea of a somehow democratically superior European Union furthermore obstructs the lessons the European Union can learn from Ukraine. A practical and slightly ironic example of this is provided by Prof. Yaroslav Hrytsak from the Ukrainian Catholic University of Lviv, who explains that the Revolution has created an unprecedented level of political participation among the young Ukrainian population. In the process of protesting in favor of the European model of democracy they have, at least in terms of participation, easily surpassed their peers in that very same European Union.

It is hard to imagine Comfort Town in Amsterdam, Paris or Berlin; not because the people in these cities categorically despise color, but because of an increasing dissatisfaction with anything associated with ‘the European experience’. Comfort Town nonetheless has more in common with the European Union than meets the eye. Both started out in a relatively open and inclusive manner and ended up as communities fenced off from their neighbors. Both promise a set of European values that in reality rarely live up to the ideals that inspired them. This should not dissuade those living in these two communities to keep on striving for this European ideal. It should make us aware that its realization will require more than buying a house or signing an association agreement.

[1] Kurkov, Andrey. Ukraine Diaries: Dispatches from Kiev. Translated by Sam Taylor. Random House UK, 2015.

[2] Brodsky, Joseph. Less Than One: Selected Essays. 4.1.1987 edition. New York: Farrar, Straus and Giroux, 1987.

 

 

David Lodder is currently a student of the College of Europe, Natolin Campus. 

European Parliament to EU Governments: ‘Ban nukes in 2017!’

Leo Hoffmann-Axthelm, 29 October 2016

Brussels/Strasbourg. European Union’s legislature takes clear stance on upcoming negotiations on international treaty to prohibit nuclear weapons: the EU’s Member States should “support the convening” and “participate constructively” to its negotiation.

Non-proliferation we can agree on. The EU scored a major foreign policy success in brokering the talks between Iran and six major world powers on the dismantling of parts of its nuclear programme. It is less vocal on the nuclear weapons of the other countries pictured here.

Non-proliferation we can agree on. The EU scored a major foreign policy success in brokering the talks between Iran and six major world powers on the dismantling of parts of its nuclear programme. It is less vocal on the nuclear weapons of the other countries pictured here.

Even as the EU expands its foreign policy machinery and acquires new powers to represent its Member States at the United Nations, it has been oddly silent on one of the most exciting topics at this year’s UN General Assembly meetings.

Its silence on nuclear disarmament and the humanitarian-led push to ban nuclear weapons, is even more striking if one considers the EU’s status as “civilian super-power” and the world’s largest provider of humanitarian assistance.

So what is its stance on the last weapons of mass destruction not yet subject to a universal treaty prohibition? In two words, embarrassingly reactionary. On the occasion of the 2015 NPT Review Conference, when 185 countries joined statements entitled “Humanitarian Initiative” or “Humanitarian Consequences Group”, the EU’s representative was unable even to utter the word “humanitarian”, positioning the EU on the outer fringe of the nuclear discourse.

Nuke watchers will not be surprised to hear that a veto is to blame for this diplomatic blunder. The EU’s Foreign Affairs Council is the Council formation composed of foreign affairs ministers, which formulates EU foreign policy – if they can reach unanimity. France’s reticence in particular left the EU with only one option to show that it cares about nuclear disarmament: ensuring highest-level attendance and sending Federica Mogherini, the EU’s “Foreign Minister” and Chair of the Foreign Affairs Council, to deliver the EU statement in person. Ms Mogherini is known to be a longstanding supporter of nuclear disarmament.

With the Council and by extension the European Commission’s foreign affairs apparatus deadlocked, attention turned to the European Parliament. Freed from formal obligations in foreign policy matters, the European Parliament – like most national parliaments – finds it easier to ‘do the right thing’ and put moral considerations above so-called ‘realist’ constraints, e.g. the claim that NATO states cannot be leaders on disarmament matters, having to move at the speed of the slowest members.

Alas, after progressive resolutions reinforcing the global calls for complete nuclear disarmament in years past, the 2014-19 legislature had so far remained silent on the matter. Leading up to the 2015 debacle, the parliament declined to pass a resolution to call for a progressive EU position, in spite of efforts to the contrary. Ms Mogherini voiced her dismay in the next plenary session.

As the Humanitarian Initiative unfolded into a movement to negotiate a treaty prohibition of nuclear weapons, parliamentarians took notice, however. Unlike the majority of the EU’s governments, who appear to prioritise NATO cohesion over their moral convictions, the European Parliament took a clear stance last Thursday. With impeccable timing, on the same day as the start of voting in the United Nations General Assembly’s First Committee tasked with disarmament matters, the EU’s Parliament:

  • “Welcomes the recommendation to the UN General Assembly … to convene a conference in 2017 … to negotiate a legally binding instrument to prohibit nuclear weapons”
  • “Invites the EU Member States to support the convening of such a conference in 2017 and to participate constructively in its proceedings”
  • “Invites VP/HR Federica Mogherini and the European External Action Service to contribute constructively to the proceedings of the 2017 negotiating conference”

In a particularly encouraging development, almost all of the EU’s centre-right and conservative parties also voted in favour of this language. While their governments at home are almost the only countries globally to oppose a Ban Treaty, except for the nuclear-armed themselves, the people’s representatives took a view that much closer mirrors what surveys have been showing for a long time: we reject nuclear weapons, and will not want to entrust our “security” to a deterrence gamble that has failed far too often to guarantee 100% reliability. Even while condemning Russia’s nuclear sabre-rattling, the resolution sends a clear signal of de-escalation. No nuclear warfare in Europe, please.

Nobody said banning nuclear weapons was easy: otherwise, it would have happened decades ago. Banning nuclear weapons takes courage, or, as President Obama would say, it takes a “moral revolution”. Let’s ban the worst weapons of all under international law, and help his successors to overcome obstacles in taking more decisive steps to reduce investment, posture and numbers.

Nuclear disarmament is a process, after all, not a black-and-white dichotomy. A ban helps.

@leo_axt

 

Leo Hoffmann-Axthelm (Voltaire Promotion) has followed nonproliferation and disarmament diplomacy since 2010. After a stint as disarmament envoy for the Republic of Nauru, he co-founded the International Campaign to Abolish Nuclear Weapons (ICAN) in Germany. Today he is in Brussels for ICAN and Transparency International.

 

Free passes for InterRail ?

keep-calm-and-go-interrail-3

Vincent Delhomme, 14 October 2016

Violeta Bulc, the Commissioner for Transport, recently told the European Parliament[1] that she was ready to carry through an old idea of offering free InterRail tickets to all young adults turning eighteen, sparking a wave of enthusiasm among MEPs and Brussels officials. These tickets enable their holders to travel by train freely through Europe for a certain number of weeks and has quickly become a masterpiece of the young European tool-kit. The aim of such a measure is clear: enhancing youth mobility and fostering the European feeling among new generations. However, if on the face of it, the plan may sound appealing, it is neither a legitimate policy instrument, nor an efficient way of fighting Euroscepticism and increasing mobility.

First and foremost, this idea will be costly, tremendously costly. Estimates vary from 1,5 to 3 billion euros, between 1 and 2 % of the EU budget, at a time where this budget is precisely subject to fierce negotiations and is put under stronger pressure due to the financial impact of Brexit. Which program is going to be trimmed in order to pay for this generous plan? Which other source of financing is available? These remain open questions.

It is not to say that building a European sense of belonging is not worth a couple of billions. It undoubtedly does. But it is doubtful that offering InterRail passes is the best way of reviving the love for the EU among youngsters. Frequent trips throughout Europe are already a reality for many young Europeans thanks to InterRail and low-cost carrier flights. Alternatively, this money would be better employed to fund the Erasmus programme whose financing has been put under threat for the last years and which still remains inaccessible for many students. This money could also be provisioned for the programme of an apprenticeship Erasmus, put forward by the French MEP Jean Arthuis[2].

This idea is also problematic on a political point of view. Is it really the role of a government to offer free journeys with taxpayer’s money? And even if it were, is it the role of the European Union? If something needs to be done to help the least well-off to discover their continent, it seems that national governments are perfectly capable, and better suited, to conduct such a policy. At a time where resentment for the Union is at a record high, when it is regarded as an out of touch and wasteful institution, it is not the moment to make its detractors right.

Moreover, the EU has better tools at its disposal to make travelling easier and cheaper for all European citizens. It could carry on with the opening of the European rail network to competition, especially international lines, currently in limbo. If the EU seeks to increase mobility as a whole, it should continue to break down barriers on the continent, a task it has been very good at for the last decades.

Simply put, this plan is demagogic and clientelistic. It is just wrong to buy the love and support of the voters with gifts. It is ridiculous to expect to get the respect of young people by offering them a trip to explore the night-clubs of Budapest and Berlin. Youngsters are perfectly capable of rationally understanding why the EU is so important in their lives and for their future. The EU is an extraordinary journey that has done more than any other institution to connect the European peoples, and this is precisely why it should give up this idea that undermines its credibility and will do nothing to improve it.

[1] https://www.euractiv.com/section/transport/news/eu-ready-to-explore-free-interrail-tickets-for-european-youngsters/

[2] http://jean-arthuis.eu/fr/presse/393-un-erasmus-des-apprentis-experimente-en-2016.html

Vincent Delhomme is currently a student of the College of Europe, Legal Studies Department.