The relationship between the Commission and the Council in EU trade policy

The aim of this paper is to analyse the relationship between the European Commission and the Council in the field of trade policy in light of the Doha Development Agenda. Especially, we will question whether the former is autonomous from the latter negotiating trade agreements. This will be addressed in four sections including an introduction and a conclusion, and two main parts where I will present theories that do or do not recognize this autonomy respectively. Finally, the position and requests of the European Union (EU) in the Doha Round will be used as examples to confirm or refute the proposed theories and provide a clearer picture.

This brief introduction will provide some information about the institutional framework of EU trade policy and the Doha Development Agenda.

Since the Treaty of Rome (1957) member states have created a common trade policy and transferred an important share of sovereignty in trade policy to the Commission. Over the years European Union trade policy has changed including new domains such as intellectual property and involving new institutions like the European Parliament. However, the two institutions always involved have been and are the Commission and the Council. According to articles 207 and 218 of the Treaty on the Functioning of the European Union, the Commission can negotiate on behalf of Member States, but it has to be authorized by the Council that also issues negotiating directives. Once negotiations are over, the Council has to authorize the conclusion of the agreement most often by qualified majority. Since the Treaty of Lisbon (2009), the European Parliament has to give its consent before the agreement enters into force. However, I will not consider the role of the Parliament mainly for two reasons. Firstly, this paper is focused on the relationship between the Commission and the Council. Secondly, the functions of the European Parliament were increased when the Doha Round was almost over.

The Doha Round is the latest round of trade negotiations between World Trade Organization members. Launched in 2001 with the aim of addressing the problem of global poverty and supporting trade in developing countries, it failed since states were unable to combine their requests being stuck mainly on agriculture, market access, and industrial tariffs.

In this section we will look at authors claiming that the Commission’s autonomy is limited by the Council in trade policy. In the first paragraph we will examine the principal-agent approach according to Chad Damro’s analysis, while in the second one we will consider the Commission’s position vis-à-vis member states’ preferences in the Doha Round.

The principal-agent approach implies the delegation of authority from political principals to non-elected agents and, as specified by Chad Damro (2007), in EU trade policy political principals are the Council, while the agent is the Commission. In accordance with the authority transferred, principals allow agents to engage in activities at their own discretion as long as they respect the guidelines given by the principals. Nevertheless, since the agents may still try to gain certain degree of autonomy, principals develop institutional mechanisms to control this behaviour of the agents. The institutional mechanisms used by the principals include administrative and oversight procedures and Pollack (1998) specified that administrative procedures comprise the established procedures that the agent has to comply with, while oversight procedures refer to monitoring and sanctioning instruments. At the European level, the aforementioned negotiating directives and the Council’s ratification powers are part of the administrative procedures to be followed. As suggested by Dür (2006), if the former imposes the limits within which the Commission can negotiate, the latter ensures that it complies with these limits. Referring, instead, to the oversight procedures, Damro mentions the so-called 133 Committee appointed by the Council. Its aim is to advice the Commission during the entire negotiation process and, as Meunier (2005) underlined, the Commission almost always follows its advice since the Committee is also an instrument to increase the approval of Member States. Damro thus concludes that through negotiating directives, ratification powers, and 133 Committee the Council easily controls the powers the Commission has in trade policy.  Finally, always in light of the principal-agent approach, Kerremans (2004) argued that since the Council issues a negotiating mandate whenever the Commission wants to start new trade negotiations, the latter is also encouraged to comply with it in order to prevent the former from passing stricter mandates for upcoming negotiations.

Looking at the Doha Round, we notice that the Commission pushed for sustained liberalization of trade in services and asked for clear rules protecting the so-called “Singapore issues” that among other things included trade facilitation. Not by chance, as explained by Dür (2008), an agreement on trade facilitation was strongly supported by member states and interest groups. However, Kleimann and Guinan (2011) underline that if one hand the Commission aimed to include the Singapore issues in the negotiation agenda, on the other hand it was ready to make greater concessions on agriculture. In other words, the Commission was willing to fulfil part of member states’ demands on the condition that other demands would be sacrificed. As Elgström (2000) would declare, the Commission repackaged member states’ goals into a single EU position modifying their preferences. This observation thus appears as a refutation of Damro’s analysis, but some other elements must be stressed. Firstly, as Dür explained (2008), most member states considered agriculture as a bargaining chip in the negotiations being so willing to compromise in order to obtain larger concessions from the other negotiators on issues like trade facilitation. Secondly, also Kleimann and Guinan (ibid.) recognize that when in 2006 the Commission was obliged to make further concessions on agriculture against the will of most of its member states it preferred suspending negotiations. It thus follows that the Commission simply acted within those limits imposed by the Council that guarantee a more or less ample margin of movement. Moreover, when it was about to cross those limits it preferred staying within them to respect Member States’ preferences. Finally, Damro (ibid.) also noticed that the Council has required continuous transparency from the Commission as evidenced not only by the formal meetings between representatives of the two institutions but also by informal meetings between the Directorate-General for Trade and representatives of some Member States.

The autonomy of the Commission in trade negotiations is not refused by all scholars as Damro does. We will in fact be analysing theories recognizing such autonomy, while in the second paragraph we will look again at the Doha Round but in light of these new theories and especially the doctrine of managed globalization.  

The Commission’s independence in EU trade policy is made to depend mainly on three main sources, namely agenda setting, agency slack, and norm repackaging. Authors such as Garrett and Tsebelis (1997) and Pollack (1997) argue that the autonomy of the Commission primarily depends on its role as agenda-setter. Being the Commission in charge of elaborating proposals for the content of international trade negotiations, it may conduct them pursuing its own interests more than those of Member States. Pollack (1997) in fact recognizes that as agenda-setter the Commission is able to constrain the options available to the other negotiators. If the agenda is thus formulated in such a way as to favour the interests of the Commission rather than those of member states, the final negotiation agreement is more likely to meet the former’s preferences than those of the latter. Secondly, referring to the principal-agent approach, Meunier (2007) recognizes that despite the aforementioned control the principals exercise on the agent, they still cannot control all the actions of the agent when trading. The Commission thus has some room for manoeuvre during the negotiations to act beyond the limits imposed by the Council. This is known as agency slack. Finally, the Commission may also be able to modify the preferences of Member States. Schmidt (2000) suggests that it may convince specific Member States to change their position on an issue in exchange for greater advantages on other issues. On the other hand, as stated above, Elgström (ibid.) argues that the Commission may change States’ preferences repackaging their goals into a single EU position.

In addition to these theories, reference could be made to the managed globalization doctrine to demonstrate the Commission’s autonomy in the Doha Round. The managed globalization doctrine comes from the discourse held by the Trade Commissioner Pascal Lamy to the European Parliament in September 1999. It became the guiding principle of the EU’s trade policy and Meunier (2007) recognizes that since the agenda of the EU in the Doha Round was set up in such a way as to pursue the objectives of this doctrine, Member States’ preferences may have been altered accordingly. Lamy explained that this doctrine aimed to ensure that globalization was “maîtrisée”, namely managed, promoting multilateralism, social justice, and sustainable development. Moreover, he also underlined the necessity of establishing trade-related disputes rules in order to boost trade liberalization. If we now look at the mandate that the Council adopted in 1999 for the upcoming Doha Round, we would first notice that Member States included also a development dimension among the objectives to reach. Jabko (2006) argued that this was the result of Lamy’s ability to repackage States’ preferences in such a way as to combine both Commission and Member States’ preferences. Secondly, we should also notice that the EU firmly supported the aforementioned trade-related disputes rules, even if most Member States complained about their nature and how decisions would be made (Meunier 2007). It thus follows that in the Doha Round the Commission not only used its agenda-setting advantage, but also repackaged states’ preferences to achieve its own goals.

We have thus analysed the role of the Commission in the Doha Round from two completely different perspectives, but some clarifications seem useful to fully address our question. Referring to the agency slack behaviour, Damro (ibid.) admits that this behaviour is a potential way through which the agent may become autonomous from the principals. However, he specifies that it is more likely to be adopted by the Commission in competition policy, another area where considerable portions of sovereignty have been transferred. In fact, since trade policy is inherently more politicized, the degree of control exercised by the principals in trade policy hardly leaves room for action. Not by chance, the principals have control instruments for each stage of the negotiation process[1]. Furthermore, analysing the Doha Round, Meunier (2007) recognized the ability of the Commission in repackaging Member States’ preferences into the doctrine of managed globalization. Nevertheless, she also underlines that focusing on a single mandate distracts us from day-to-day negotiations that are those that most influence EU’s trade policy. She claims in fact that in addition to the mandate issued by the Council, the Commission must also respect the general approach of Member States in each area of trade policy. For instance, in 2006 negotiations were suspended because the Commission did not want to go against the general policy that States pursued in the agricultural sector. It thus follows that even in the Doha Round the Commission has not acted autonomously, but its managed globalization doctrine was only part of a larger framework in which state preferences were fully considered. Finally, Dür (2006) also assumed that if the Commission had generally disregarded the demands of the Council, the common trade policy would have been short-lived.

However, this paper has addressed this issue mainly in light of the Doha Round. Nowadays, there are new players on stage like the Parliament and the 13 States that have joined the Union since 2004. It may be argued that the most important role of the Parliament may increase the control exercised on the Commission, but we may also suppose that the entry of new states has given to the Commission a freedom of action that it did not have in the Doha Round, because the higher number of States could make it more difficult for the Council to reach agreements and establish clear guidelines to follow.

Michele d’Orazio

Young European Ambassador - EU Neighbour East

[1] Damro (ibid.) specifies that the principal-agent approach actually assumes that the agent has some autonomy to partially pursue its objectives. Since in EU trade policy the principals’ control instruments severely limit such autonomy, he even questioned whether this approach is the best way to examine EU common trade policy.

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