Beyond the Shadow of the Veto: Economic Treaty Making in the European Union After Opinion 2/15

Abstract

This chapter examines the evolution of the law and practice governing the signature and conclusion of trade and investment agreements in the EU. It argues that the 2001 Laeken Council objective to enhance the legitimacy of the European Union (EU) through “more democracy, transparency, and efficiency” can only be achieved by changing the modus operandi for EU economic treaty making from “mixed” to “EU-only” governance. The formal reform of EU exclusive competence for common commercial policy (CCP) through the 2009 Lisbon Treaty and the recent clarification of the material scope of the CCP by the Court of Justice of the European Union (CJEU) in Opinion 2/15 only make for one of the necessary conditions to this end. Abandoning the traditional Council practice of unanimous decision-making and member states” ratification in their own right in favor of qualified majority voting (QMV) in the Council is incentivized by the coincidence of a powerful commercial and political demand for the success of the Union’s external economic agenda, on the one hand, and the existence of a credible threat thereto, on the other hand. The threat to progress in the agenda for EU economic treaty making is epitomized by member states’ frequent exercise of “vetocracy” in the Lisbon era. The subordination of member states’ legislatures to EU exclusive governance of economic treaty making is, finally, rendered possible through democratic input legitimation at the EU level, which is now provided by the European Parliament in an increasingly effective manner. The chapter advances a normative claim for the accomplishment—and gives empirical evidence for the existence—of a new “legal-political equilibrium” in EU external economic governance, which develops as a result of the coincidence of the before-mentioned factors. In this new legal-political equilibrium, political transactions are shifted to a treaty-making modus operandi, which minimizes transaction costs of CCP governance, alters the configuration of institutionalized sources of democratic legitimacy, and enhances democratic representation at the same time.