Clarifying exclusive competence

How EU law divides up the power of the union and the member states to conclude international agreements is a question, perhaps, strictly for the enthusiast. But it is interesting and constitutionally important. The CJEU’s decision in Opinion 3/15 helps clarify it in one respect.

The EU is not itself a state. It has not simply ‘taken over’ and eliminated the member states’ roles as actors in international law. On the other hand, it does itself act on the international plane, including by making binding agreements. So for any international agreement the question can arise: is this an agreement that only the EU can make (exclusive EU competence), or that only the member states can make (exclusive member state competence), or that needs to be made by both (shared competence).

The basic starting point is that the EU should have exclusive competence to conclude an international agreement in relation to matters where the it has such competence internally. That obviously makes sense. But what is meant in this context by ‘exclusive’?

In many areas the EU has, as it were, a sort of latent exclusive competence: it has power to act, but until it does so the member states retain their power. Moreover, in many areas when it does act it leaves – directly or indirectly – some residual power to the member states. For instance, it may harmonise a field, but only by adopting minimum standards, leaving member states free to legislate for higher standards themselves.

There are, in such cases, two basic and simple principles. First, the merely latent power to harmonise does not give the EU exclusive jurisdiction; its jurisdiction depends on harmonisation measures having been adopted. Second, in general, once the EU has exercised the power and adopted harmonisation measures, it thereafter enjoys the exclusive competence to conclude international agreements dealing with that area. This is the so-called ERTA doctrine, which is now given verbal form in article 3(2) TFEU.

However, in the early 1990s, in Opinion 2/91 concerning the ILO Convention, the CJEU introduced a qualification to this principle: if the EU exercised its legislative power, but did so using a minimum-standards approach which left the member states free to legislate above a certain threshold, then this could produce shared rather than exclusive competence. After all, in such cases the EU has effectively decided to preserve elements of the member states’ sovereignty intact, and they must therefore be the ones which can exercise that sovereignty internationally.

Although this makes sense as a concept, it is not always easy to apply in practice. Between complete harmonisation and an overtly light-touch approach lie many pieces of union legislation which leave something in the hands of the member states, but not much. Should such cases be regarded as instances of merely partial or piecemeal harmonisation, producing shared competence? Or as essentially full harmonisation measures, producing exclusive competence?

This was an issue that the CJEU confronted in Opinion 3/15 on the Marrakesh Treaty to facilitate access to published works of blind or visually impaired people. There were EU rules in the area dealing with copyright, but they allowed member states various options about exactly what rights they would apply. The member states argued that this meant the union had shared, not exclusive, competence in relation to the Marrakesh Treaty.

The court disagreed. In its view there is a critical difference between a measure that adopts minimal standards and leaves it to member states to legislate more extensively if they wish, and one that harmonises but grants member states specific options or derogations. That seems a rather formalistic approach. Can it really make a difference whether the member states’ residual powers are defined positively or negatively?

The court, however, also pointed out that the options and derogations were relatively narrow, and subject to fairly tight control by EU law. In those circumstances, as a matter of substance, the EU has ‘occupied the field’. This seems a sounder basis than the first for the court’s view, but it is a distinct point.

As usual with EU law, there is also a bigger picture. Back when the ILO Convention opinion was adopted, minimum-standards harmonisation was all the rage – a solution to the legislative constipation that had been caused by the difficulty of agreeing comprehensive harmonisation measures. It was politic for the court to adopt a jurisdictional approach which was reassuringly protective of member states’ sovereignty. Today the pendulum has swung, and it is no surprise to find the CJEU (re-)asserting a more aggressive approach.

There were signs of this a couple of years ago in the Neighbouring Rights case (C-114/12). The ILO ‘exception’ is likely to be given an increasingly narrow interpretation, and the court can be expected to favour a simple division of competences, as it did here.

Paul Stanley QC is a barrister at Essex Court Chambers

@EssexCourtLaw essexcourt.com