European Union as a Single Actor
Mario Afonso Lima ([email protected])
The present article seeks to analyse the European Union behaviour
as a unitary actor in the International Organizations. As the
European integration deepens, along with its institutional unfolding,
it`s possible to perceive that a new actor has come to light in the
international scenario, enclosing 27 countries and that has been
strengthen up to the point to impact in international negotiations.
Through two case studies, this research presents the European
Union actorness and its behaviour in two International
Organizations, the International Monetary Fund and the World
Trade Organization
PAPER PREPARED FOR PRESENTATION AT THE. FLACSO-ISA JOINT INTERNATIONAL CONFERENCE,
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Introduction
The objective of this paper is to discuss the European Union (EU)
“actorness” and its participation on multilateral forums, such as IMF and WTO.
Firstly, I intend to discuss the requirement for “actorness” the evolution of these
requirements. Later on, it will be presented how the EU acts on international
forums as a united actor.
European integration process started nearly sixty years ago, and for the
past twenty years it has been a major unified economic bloc acting on the
international stage, not as a state, nor as an international organization, since it
has a preferences of its own, but not the others characteristics of a state. In the
Academy there has been a long debate about what kind of international actor the
European Communities and, its latter counterpart, European Union are.
According to John Peterson, the founders of European Economic
Community “had little ambition to create a new kind of international power”
(PETERSON, 2008: 202), which was one of the reasons that the Communities
had no external powers except to conduct international trade negotiations, which
was justified by the impossibility of forming a common market without a common
trade policy. (PETERSON, 2008). Some blame this lack of an external side to the
functionalist’s theory that “was silent on the external environment just when the
European Communities (EC) was forming in the 1950s.” (GINSBERG, 1999:
432). Ginsberg states the reformulation of the functionalist theory, which leaded
to the Neofunctional theory which, according to Ginsberg, “responded to the
sounds of the silence on the external dimension” but, before they gained more
strength, the neofunctionalists “lost their punch” to other theories and were
engulfed by them. (GINSBERG, 1999: 432).
This research’s aim is to evaluate EU unitary action, and to understand if
EU has become a stronger unitary actor, with system affecting capabilities
especially in various economic sectors and especially in the field of commerce,
through its role in WTO and the IMF.
Nevertheless, first, it is important to define what we understand as an
international actor. Many academics, such as Daniel Thomas, Karen Smith and
Roy Ginsberg, go back to using Gunnar Sjöstedt’s definition of international
“actorness”, which defines the international actor as those who has “the capacity
to behave actively and deliberately in relation to other actors in the international
system” (SJÖSTEDT, 1977:16 apud THOMAS 2010:2). Ginsberg points out that
the discussion over European Union (EU) “actorness” steers away from the
debate of EU as a superpower, but at the same time enable us to “chart the
changing EU role in the world” (HILL, 1993 apud GINSBERG, 1999: 447).
As Nick Wright argues, there is no question that the European Union is an
international actor, as it has already proven its capabilities to sustain a “coherent
international action in some areas” as economics, trade as the promotion of
human rights. In other areas such as security, as the traditional sense of it, the
EU manages a discreet performance, but it still has a role.
Defining Actorness
Professor Daniel Thomas discusses the theme of actorness and presents
the definition that “EU actorness is better understood as the Union’s capacity to
aggregate preferences and select policies on international issues, and then to
pursue them in relations with other states, non-state actors and international
institutions” (THOMAS, 2010). This definition is based upon the , already cited,
Gunnar Sjöstedt’s definition of actor and the CEG from Christopher Hill, not
including any reference to effectiveness as happens with other definitions, such
as the one from Charlotte Bretherton and John Vogel (THOMAS, 2010 ).
According to Thomas, the literature already existent in this field is a “mix of
rationalist and constructivist perspectives” and some of de determinant factor do
not belong to an empirical world. The two examples given by the author are: a)
“commitment to shared values and principles”; b) “legitimacy of decision process”
(BRETHERTON & VOGLER, 2006 apud THOMAS, 2010:3). Both characteristics
can enhance EU actorness, but they are not necessary to the EU act in the
international scene. To say that these two conditions can be found in every
territorial state would be naïve, and even foolish, and still the actorness of
territorial states are indisputable.
The recognition by others proposed by Joseph Jupille and James Caporaso
is another point that Thomas debates by saying that other international actors are
not necessarily recognized, as is the case of Hamas or Hezbollah, and yet they
still an international actor. For Thomas even though the EU has all the conditions
for being considered an international actor, such as “the capacity to undertake
international negotiation” and “access to policy instruments” (BRETHERTON &
VOGLER, 2006 apud THOMAS, 2010:4), the EU “is still often not perceived as a
foreign policy actor.” (THOMAS, 2010:4).
However, what is undoubtedly relevant to the discussion of actorness and
how effective is the actor can perform in international negotiations is political
cohesion, defined by Jupille and Caporaso as the “ability to formulate internally
consistent policy preferences and thus to adopt common policies or positions,
which may emerge because member states have similar preferences”. (JUPILLE
& CAPORASO, 1998 apud THOMAS, 2010:4). Bretherton and Vogler have
highlighted the importance of “the ability to formulate coherent policies” and
“formulate and implement external policy” (BRETHERTON & VOGLER, 2006
apud THOMAS, 2010:4).
Cohesion, for Bretherton and Vogler, involves three components: “shared
commitment to a set of overarching values, the ability to provide overall strategic
direction for EU external activity and the everyday requirements of policy-making
and implementation, including the availability of policy instruments”
(BRETHERTON & VOGLER, 2006 apud THOMAS, 2010:5). Thomas also add
the component “shared norms and values” as proposed by Martjin Groenleer and
Louise Van Schaik. (GROENLEER & VAN SCHAIK, 2007 apud THOMAS,
2010:5). The author see one problem in these components of cohesion: they are
not easily converted into measurable variable and so it would be impossible to
analyze qualitatively the EU cohesion.
To solve this question the author propose a new definition of cohesion
especially for the theme of EU. In the authors word “cohesion is best defined as
the sharing of policy preferences among EU member states and supranational
institutions, the adoption of determinate common policies, and the
implementation of those policies by the same member states and supranational
institutions” (THOMAS, 2010:5). This definition is consistent with the definition of
EU actorness, already exposed above, and gives three measurable dimensions
– “preferences, policies and behaviour”.
The first dimension – convergent preferences – is the range of preferences
that the member of the EU have prior to any deliberations among them. The
second – policy determinacy – reflects, “how clearly and narrowly an EU common
policy defines the limits of acceptable behaviour” by the member of EU and the
supranational institutions. The third – behaviour (or what the author calls,
‘implementation’) – shows how strict EU actors comply or implement the terms of
the common policy agreed.
Thomas draws a table comparing each one of the three perceptions of
requirements for Actorness – Jupille & Caporaso, Bretherton &Vogler and his
own – in order to show the differences between each one.
Through the table it is easier to notice the similarities and differences that
each set of authors has. Cohesion seems to be an a converging point between
Jupille & Caporaso and Bretherton & Vogler, and in a smaller degree to Thomas,
as ‘convergence preferences’ can be understood by ‘cohesion’. The Autonomy
proposed by Jupille & Caporaso is very similar to the formulation of coherent
policies’ adding the ‘capacity to undertake international negotiation’ – which on
its turn could be considered the sum of Jupille’s ‘autonomy’ and the ‘recognition
by others’. Thomas’ variable, ‘determinate common policy’ is can be related to
Bretherton’s ‘access to policy instrument and, in a smaller degree, to the ‘capacity
to undertake international negotiations’ and to Jupille’s ‘autonomy’.
Table 1: Requirements for Actorness
Jupille & Caporaso,
1998
Bretherton & Vogler,
1999/2006 Thomas, 2010
Cohesion Shared values & principles Convergent Preferences
Authority
Formulation of coherent
policies
Determinate common
policy
Autonomy
Capacity to undertake
international negotiations
Consistent
implementations by
member states and EU
institutions
Recognition by others Access to policy instruments
Legitimacy of decision-
making process
Source: Thomas, 2010
The curious point about this table is that it is possible to notice how very
subtle the differences are. There are only two points in the table that is difficult to
link with the rest: Jupille & Caporaso’s ‘authority’ and Bretherton & Vogler’s
‘legitimacy of decision-making processes. Both of these points can be debated if
it is really a requirement for EU actorness. In the first case – authority – can be
refuted by the fact that a common institution does not have to take the authority
over foreign policy to represent, one could still formulate foreign policy in a state
level and use the supranational mechanism only to implement the policy and still
it would be seen as an European policy, as has happened with the formulation of
the Common Agricultural policy, that was formulated inside the French state and
has become an European policy.
The second case ‘legitimacy of the decision-making, can be rebutted by the
simple argument the even some traditional state does not have a legit decision-
making process and even so they are seen and respected as actor. On the
supranational level, if the member states have decided to ‘pool’ a part of their
sovereignty into a single or a group of institutions their already given all the
legitimacy need for the institution to act on their behalf, on subjects previously
accorded.
Daniel Thomas advances explaining how to measure each one of his three
requirements. Convergent preferences is one of the more important items, due
to the fact that the object in question is a supranational institution formed by
governments, so the higher the level of convergence more power the institution
will have. It is also the most subtle and hard to measure, since the states and
institution tries to hide their preferences and true intentions throughout layers of
foreign policy acts, so one must use either deduction or induction to find out the
true goal behind negotiation in order to measure the level of the convergent
preference. (THOMAS, 2010)
The second requirement, determinate a common policy, is a fundamental
point to the EU actorness. The fact that the institution can define a common policy
makes it more seriously taken into account when acting as a unified actor.
Thomas states that to measure determinacy “requires attention to the formal
wording of the policy adopted” and that a policy with clear goals and limits to
acceptable behaviour will get higher scores on measuring it.
The last requirement – consistent implementation by member states and
EU institutions – or behaviour can be analysed on how the other actors perceive
the action of the EU. Many bodies form the EU and sometimes it does not agree
on how to proceed acting with an inconsistent performance. Therefore, a
consistent performance, or the behaviour, of several organizations within the EU
is as important as political convergence and determination. (THOMAS, 2010).
The IMF structure
The IMF was created in 1945 as one of the Bretton Woods organizations
aiming at the reconstruction and maintenance of the International Financial
System. As part of its creation, the 30 countries that signed their agreement also
made the deposit of a specific amount which represented a share, thus defining
their participation in the IMF, resembling other institutions where voting is
proportional to the contribution made by countries members. In 1969, the IMF
created Special Drawing Rights (SDR), a financial asset that is based on four
major currencies and serves as an alternative to the dollar reserves and gold.
Each country has a reserve asset with values stipulated by IMF Executive
Committee, based on the performance of the national economy. From this
amount, countries can use the SDR to negotiate among themselves to purchase
foreign currencies (Dollar, Sterling Pound, Yen and Euro) or even SDR. Should
the rate of SDR pass the stipulated value, the country tends to profit. The opposite
occurs when the country falls below the rates set by the IMF.
The SDR is also related to the distribution of IMF quotas, as one of the
integral parts of the deposit system. The deposit system works to this day and
continues to set the voting shares of member countries along with a number of
other factors, such as gross domestic product (GDP) how open is the economy,
the level of import and exports, balance of payments (BOP) and reserve balance.
This mechanism generates a weighted voting system where each state has a
different weight, which reflects the economic aspect of every nation. Of the thirty
countries that created the _, the six members who contributed financially to the
fund, appoint six executive directors who directly represent their own interests.
These countries were the U.S., UK, Japan, France, Germany and Saudi Arabia.
The other countries were organized in constituencies - groups of countries - that
would elect their representatives every two years and they would represent the
interests of all those who were in their constituencies.
In the following decades, several changes in the distribution of quotas and
the constituencies due to the number of member countries and how factors above
(GDP, openness of the economy, BOP etc.) Were mentioned in the moments of
revisions of quotas occurred. These changes have meant that two countries,
Russia and China, to gain prominence within the IMF and could appoint their own
executive officers. As the distribution of votes within the IMF and given in percent
for some members gain greater voting power, others must necessarily lose. In
the formation of the IMF, the U.S. held approximately 33% of the vote in the
Executive Committee and the UK had the second largest share with 16% of the
votes. Since then, the two countries have steadily declined in each quota revision.
In the early 1990s, the U.S. accounted for 19.1%; in 2010, had 17.08% of the
votes while the UK had 4.95% (GIANARIS, 1990; BINI SMAGHI, 2005).
For a decision to pass on IMF Executive Committee, it needs at least 50%
of the votes, but in some special occasions may need to reach a majority of 75%
and even 85% of the votes. As the most important decisions of the Executive
Committee require a majority of 85%, even with the relative loss of U.S. power,
this still holds veto power, unlike the UK who no longer owns it. The following
table demonstrates the need for approval of various actions of the Executive
Committee of the IMF majorities. From this table we can realize the power held
by the U.S., and is currently the only country that alone can veto any decision
that requires 85% of majority.
The IMF also has a very interesting feature. According to its statute, the IMF
is to be stationed in the country / constituency that has the largest share. Since
its inception, the IMF has maintained its headquarters in the U.S., however this
is subject to change.
Table 2: Voting Thresholds
BINI SMAGHI, 2005
EU Actorness
The deepening of European integration and alignment of the policies of its
member states brings the question of whether the EU has, in recent decades, is
configured as an actor on the international scene. Since 1992, with the Maastricht
Treaty, when it was established subsidiarity, and deeper after the Treaty of
Lisbon, when the external service of the EU was established, the debate has
intensified.
Currently, European countries are part of several international
organizations, either as a full member or as an observer member. The table below
shows the multilateral organizations and groups where the EU has external
representation, either total or through one of its organs. Through this table, it is
possible to realize that in most cases the EU is invited as an observer member.
Only the G20, the OECD and the WTO is that some European organization is
considered a full member. However, when considering the role of the EU as an
observer, the EU representation shows present in several institutions.
Table 3: EU Participation in Forums and Organizations
Mahieu et al. 2005
Even if the EU does not have a formal representation in international
organizations or multilateral groups, in many cases, several EU members
participate and have formal representation in these environments. With a closer
alignment of the European states policies, the EU member states end up
defending similar positions. Where there is a formal representation and
subsidiarity, the role of the EU is clearly identified.
Since EMU's creation, the prospect that the EU would become a unitary
actor in IFS came intensifying. However, the unitary activity still is not a reality
because of two major issues: the Agreement establishing the IMF and the will of
the member countries of the IMF.
Duality in Unity: EU in the IMF
The case of the single EU representation within the IMF is a different
question. As explained earlier, the IMF is made up of 24 constituencies and 8 of
them unitary. Within the IMF, European countries are spread across 10
constituencies. Three of these permanent - UK, Germany and France - and seven
diluted between EU members and non-members. This mixture between members
and non-members makes difficult the performance of the EU as a unitary actor in
the current conditions.
Table 4 shows the division of EU countries in 10 constituencies in which
they participate. It is clear the difficulty in coordinating the activities of all members
of the EU in the IMF, mainly because the constituencies of Denmark, Finland,
Sweden, Latvia, Lithuania and Estonia have a president who does not always
make the EU. The same happens in the constituency of Spain, but the turnover
of the presidency is between Mexico, Venezuela and Spain. Ireland and Poland
are in constituencies that have a fixed chair, Canada and Switzerland
respectively.
Table 4: EU Countries in IMF Constituencies
EU Countries Other Countries Constituency’s
Director Votes (%)
Germany Germany 5.87
France France 4.84
UK UK 4.84
Italy, Greece, Portugal, Malta
Albania, San Marino, East Timor Italy 4.09
Netherlands, Bulgaria, Cyprus,
Romania
Armenia, Bosnia e Herzegovina, Croatia, Georgia, Israel, Macedonia, Moldavia,
Ukraine
Netherlands 4.74
Austria, Belgium, Luxemburg, Czech Republic, Hungary, Slovakia, Slovenia
Belorussia, Kazakhstan, Turkey Belgium 5.13
Denmark, Finland, Sweden, Latviaa, Lithuania, Estonia
Iceland, Norway Interchangeable: Denmark, Finland,
Sweden and Norway
3.43
Spain Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Venezuela
Interchangeable: Spain, Mexico and
Venezuela
4.44
Ireland Antigua e Barbuda, Barbados, Belize, Canada, Dominica, Granada, Jamaica,
San Cristovan e Nevis, Santa Lucia, São Vicente e Grenadines
Canada 3.63
Poland Azerbaijan, Kyrgyzstan, Switzerland, Tajikistan , Turkmenistan, Uzbekistan
Switzerland 2.78
BINI SMAGHI, 2004; BRAY, 2008 Formatted by the author
Thus, the role of the EU in the IMF is completely diluted, even if the member
countries are able to coordinate their policies and positions, the current
configuration of constituencies makes a joint action very difficult. The most critical
cases are from Ireland, Poland and Spain. In the Spanish case, the placement
must be agreed with many other countries that are not part of the EU or even
Europe and which have a development gap when compared to parts of the
constituency. Even though Spain is among the countries with the highest share
within that group, others have very different perspectives. The cases of Ireland
and Poland are very similar to Spanish, however, these two countries are in
constituencies whose presidency is fixed - the Irish case is the Polish case in
Canada and Switzerland - making it even harder a single action of European
countries.
However, what has occurred is a cooperation between the constituencies,
which is not exactly something new. For decades, the G7 has sought to meet
previously to discuss the issues seeking consensus in order to reach a common
position, and seek to implement it in multilateral decisions. Such cooperation is
easily understood by understanding the power of voting group of countries -
nearing 47% - which represents an almost total adoption of decisions requiring
50% in the IMF. This type of organization also encourages its members with the
possibility to veto most sensitive decisions requiring 75% and 85% majority for
approval (BINI SMAGHI, 2004).
Lorenzo Bini Smaghi in his 2004 work makes an effort to demonstrate the
impact of these groups and the power to vote. Seeking to demonstrate the power
of a single constituency for the EU, the author uses the current quotas for a
demonstration would be simpler than this unit chair. Bini Smaghi stressed that
cooperation between EU countries is still a recent phenomenon and has a
political motive, unlike the arrangements such as G7 or G20, which are organized
depending on the size of quotas or the position of creditor / receiver. The
cooperation among the member countries is part of the effort to strengthen the
role of the EU in international fora. In 1998, the European Council concluded that
it was vital that the EU cooperate in forums such as the G7 and the IMF in order
to gain greater power (BINI SMAGHI, 2004).
The European coordination has taken substantial steps to achieve unitary
action. One of the biggest examples of this is the ECB's participation in meetings
of the IMF representing the Eurozone in certain situations involving the European
currency and which will affect it. However, its observer status causes serious
limitations such as the fact that the ECB only have the power of word is assigned
to it. The creation of the ECB has generated a debate in the IMF for its
participation in the forum, since all trading countries and representation in the IMF
is via the central banks and ministries, Finance and Economy and the IMF as an
institution based in countries and nongovernmental organizations. Thus, for the
IMF and EU representation in the Eurozone remain unchanged, with the
exception of cases that are directly linked to the Euro. In these situations, the
constituency that represents the country that holds the rotating presidency of the
ECB and the euro made a statement on behalf of the Eurozone and all its
members (DÍEZ, 2003; BINI SMAGHI, 2004; SMITS, 2009).
In fact, EU still lacks an effective mechanism for policy coordination. In the
current configuration, if the EU to make available effective means of coordination
and converging interests, with only three independent constituencies - Germany,
France and the UK - the European bloc could have the power of veto. If expanded
to the Euro area, the U.S. could mobilize 25% of the votes. However, one reason
for this loose coordination is the degree of importance that member states give
to the IMF. Countries with large economies tend to give greater weight issues
relating to IMF than countries with a small economy. Thus, some countries prefer
to delegate their positions to the presidents of their constituencies, regardless of
membership in the EU or not (BINI SMAGHI, 2004; BINI SMAGHI, 2005).
The creation of European constituency in the IMF is directly affected by the
reform of the Fund and the way quotas are calculated. Bini Smaghi, as well as
other scholars have sought to demonstrate the various scenarios for IMF reform
and scenarios for EU action. Agnès Benassy-Quéré and Carlos Bowles (2002)
suggest four possible changes and new settings intended to unify the EU within
the IMF: A constituency-Germaine Franco, one of the eurozone, one with the EU-
15 and the other with the EU-25
Table 5: Scenarios for EU single seat
Bénassy-Quéré & Bowles, 2002
In the table above, we can see the possible scenarios for the formation of
constituencies that include the EU countries. In the first case, the proposal would
merge the shares of France and Germany, the two largest economies of the
Eurozone and considered the driving forces of European integration. In fact, this
first scenario would be the one that would have the smaller impact on the current
formation IMF. In the EU-15 and EU-25, or even the Eurozone scenario, directly
implicate in the expansion of European power at the supranational level, since
EU countries have between 15% and 20% of total vote - without the need to work
together with actors from outside the EU -, competing directly with the U.S. and
relying on the power of veto on decisions that require 85% of the votes.
The scenario of a unified Eurozone has a differential of the other scenarios
because the supranational institutions seeking to manage and centralize financial
and monetary issues, such as the ECB. The supranational this group of countries
comprising the Eurozone ultimately strengthens the election of a constituency for
the Eurozone. The quotas calculated - by Benassy-Quéré & Bowles (2002) and
Bini Smaghi (2004), demonstrate the size of the amount of votes that a European
constituency would have, in addition to emphasizing the amount of votes that the
EU can mobilize nowadays.
The projections of Bini Smaghi aim to demonstrate the impacts that a unitary
seat in the IMF would cause in European countries. By analyzing the scenarios
above you can see that the 2004 quota was used for the formation of a European
constituency, the EU would have more than 30% of the votes while the U.S. had
just over 17%. Even reducing this scope for the Eurozone, the figures would be
higher than the USA. This difference has made during the discussion of the
creation of unitary constituency arose another debate, this one on the intra-EU
trade and whether this should be considered as part of the variables of the
formula for calculating quotas, since the EU is treated as a unitary actor, the intra-
EU trade becomes equivalent to domestic trade of a country. This argument
arose from North American questioning aimed to defend a relative loss of power
and sought to argue so contradicts the unification of European constituencies. In
the American view, this process would open precedent for the unification of all
monetary unions, as well as countries that have pegged their monetary policy to
the dollar.
The creation of the single constituency also imply something gentler on IMF
reform. According to the Articles of Agreement on the current formation of the
IMF, the head office must be in the territory with the largest share. If this is
indeed created, the IMF headquarters should be moved to Europe. Even with
the projected expansion of European power in the IMF, some EU countries still
skittish to fight for a European constituency. The reasons for this attitude are the
most diverse, they see that some countries do not have much power in the IMF
is an asset, since they have small economies such as Malta, while the UK,
Germany and France fear that the creation of a European constituency would a
loss of relative power, as they already have joint positions and elect their own
Executive Directors (BINI SMAGHI, 2004).
Unitary action in the WTO
The European regionalism was the first example of regional integration, but
not the only one. A few years after the formation of the ECSC, various regional
blocs began to emerge around the world. In the decades that followed, almost all
the continents had at least one regional bloc uniting the countries of a region,
whether for the purpose of security, either as a means of achieving economic
development, such as SADC (South African Development Cooperation), or as a
means of expanding market, as is the case of NAFTA (North America Free Trade
area) and the FTAA (Free Trade Area of the Americas - which did not come to
fruition - or even a search for a greater competitiveness, for example,
MERCOSUR.
Many of these blocs have suffered readings and eventually change their
characteristics, some changing their purpose, leaving aside his initial idea and
seeking to reinvent itself - it was mainly with the blocks facing security after the
end of the Cold War - to remain competitive in the scenario international, others
sought the incorporation of new members and new subject areas, expanding its
international operations, as occurred with the European Communities and later
the EU. However, what differentiates the EU from other blocks, enabling it to be
an actor, in the sense defined by Sjöstedt and later Jupille & Caporaso and
Thomas, and taking into account the different characteristics of the EU in order
to be recognized by the other actors? In other words, what provides European
actorness?
The main change, which meant that the EU became a unitary international
actor, derives from the Treaty on European Union (TEU), signed in Maastricht in
force in 1993, which established the European Union in fact. Competence of the
European Community, the Common Foreign and Security Policy, and Justice and
Consumer Affairs: In this treatise, the restructuring of the political powers of the
EU into three pillars was defined. Themes about trade policy fits into the former
first pillar being the exclusive competence of the EU, demonstrating a correlation
between the member states in the political arena that the issues should be
handled by the supranational body, giving up their traditional way of doing politics,
in which each state pursues own interests in favour of a unitary block position.
However, it is not only the exclusive jurisdiction that made the European bloc be
defined differently from other actors. What is crucial in this matter is Article 190
of the TEU, which defines the EU, has legal personality and thus can act
independently of its members, seeking their own objectives.
The Lisbon Treaty, in force since 2009, also made significant changes in
the EU system. The main one was the abolition of the three pillar system for a
division of powers between the EU and member countries, and create the post of
High Representative for International Affairs which further strengthened the
perception that the European Union would be empowered to act in the System
international. The following table facilitates visualization of how the EU is
organized in relation to the division of responsibility for policy-making, after the
Lisbon Treaty, which finally extinguished the three pillars established in the
Maastricht Treaty.
Trade policy is among the exclusive powers of the European Union, being
treated only by the Union, where policies, decided by EU legislative method, are
self-applicable and has prominence on the national, demonstrating the
supranational Union on the subject. In addition to trade policy be exclusive
feature, the Union has exclusive competence on completion of any international
agreement when its conclusion will generate a legislative act or when permission
for the Union to exercise its internal competence is required. Following Article 2A
of the Lisbon Treaty, the EU has exclusive competence for the conclusion of
agreements generated at the end of multilateral trade rounds WTO (LISBON
TREATY, 2007), which effectively explains the single seat, since it has exclusive
competence ensured by an internal EU treaty.
The supranational exerted by the European Union regarding themes of
public policy of exclusive or shared, racing allows it manages on a European level
laws that are applicable supranational and self, it is not necessary that national
parliaments accept the same laws. This gives even more power to the EU to act
internationally, allowing them to negotiate directly with the Union and the result
can be self-applicable to its members.
The single acting in the WTO can be considered a necessity, since to be a
customs union and a common market it is necessary that the block apply common
policies. Thus, the role of the EU in the WTO is something that has been occurring
since well before 1986, dating from the formation of the EEC in 1958. Being a
common market expected the EU to act in a unified way WTO, being almost an
endogenous need of the organization.
EU in the WTO
European participation was critical to the formation of the Bretton Woods
institutions. Although the bloc did not formally exist, often European nations
worked together to stay as one of the dominant poles of the new multilateral
trading system that was emerging. This position, which often went beyond
motives of self-interest, has made Europe continued as one of the poles of the
world trading system, alongside the U.S. (EVENETT, 2007)
The signing of the Treaty of Rome in 1957 had as its purpose the formation
of an economic zone that configuring it a customs union, thus enabling the
establishment of a uniform tariff, which took place only at the end of the 1960s,
only after the Empty Chair crisis and the creation of the CAP. Even so, the
European Economic Community was formed in the mould of GATT, largely due
to a German insistence collude with the rules in force in the international system.
The Treaty of Rome also eventually gave jurisdiction over international trade in
goods to the EEC, empowering the European Commission to act as sole
negotiator on behalf of the Community (SBRAGIA & STOLFI, 2008).
The power of the committee further increased with the Nice Treaty, which
gave the Commission the power to negotiate trade in services, and in Lisbon,
which included intellectual products. However, Sbragia and Stolfi (2008) point out
that even with the power to act as sole negotiator, the power to define the
positions of the European Union in international negotiations still remain with the
member states, so who continues to define the guidelines of trade policies are
the member countries and the European Commission seeks ways to apply them
(BACHE ET AL., 2011).
The European Union several times was, and still is portrayed as an example
of trade liberalization, but not always, the picture holds true, what can be
perceived by accusations that EU member states are like a "protectionist club"
which ultimately opt to pay more, or even by consuming lower quality products
for the maintenance of jobs and the economy itself of its member countries. The
positions of the EU, contradictory, made Peterson (2007) to define as a
schizophrenic actor, mainly due to its internal differences, between a north and
east closer to the ideals of free trade than their southern countries. Consequently
noted by the author, the internal consensus is more difficult to occur, causing the
bloc’s international positions to appear contradictory and illogical.
Another factor, which confirms the image of the EU schizophrenia, was
presented by Ole Elgström & Michael Smith (2006), showing that the European
bloc is different from other WTO members, not because of an internal system of
checks and balances, which makes difficult the internal consensus - indeed
occurs in several states, including the United States - but the fact that there are
two spheres of government with substantive power, the national and the
supranational. This characteristic, which the authors called vertical
fragmentation, is one of the greatest difficulties of the bloc's unitary action. As an
illustrative example, the authors spend the idea that the EU has hands tied and
may be more strongly tied or more loosely, however they are always tied. In case,
the Commission may have a larger or smaller room to negotiate, however the
size of the win-set is always conditioned the acceptance of the United States
(Elgström & SMITH, 2006).
For Young, even if the commercial area is one of the greatest competences
of the EU, does not mean that a tension between national governments and
supranational authorities does not exist. Still, the EU comes covering topics on
their responsibility increasingly. The reason for this is that, the EU is at its core,
a customs union and therefore becomes necessary to give in some trade
sovereignty towards a higher institution. Initially, this transfer occurred only in the
areas of trade and tariffs, however, with its development, the EEC was gaining
more space and allowing acted in more themes that are commercial and now
representing the EU in a better way (Young, 2007a ).
The EU's relationship with the WTO has shown a relationship sometimes
troubled. Alasdair Young seeks to demonstrate this by discussing how the EU
seems to have complacency problems with the rules and decisions of the WTO.
The author cites two cases where the WTO has given permission to the
application of penalties to the EU: the question of meat treated with hormones
and the banana trade regime. Another source to demonstrate this issue was the
conduct of a formal process to check whether the EU would be implementing the
necessary measures for the two processes to adapt the rules of the current
multilateral regime (Young, 2004).
Even with a troubled relationship, the EU is a key member of the multilateral
regime and has an active participation in the WTO and the multilateral trading
rounds. Since the system of dispute settlement entered into force in 1994/95, the
EU was the second most used, and that more was thrown into the system, behind
only the U.S., as shown in the following table.
Table 5: WTO dispute solutions system
Country Claimant Respondent
South Africa 0 3
Argentina 15 17
Australia 7 10
Brazil 25 14
Canada 33 16
China 7 21
USA 97 110
India 19 20
Japan 14 15
Mexico 21 14
Switzerland 4 0
EU 82 70
Uruguay 1 1
Venezuela 1 2
Country Claimant Respondent
Germany 0 2
Belgium 0 3
Denmark 0 1
Slovakia 0 3
Spain 0 2
France 0 4
Greece 0 2
Hungary 5 2
Ireland 0 3
Netherlands 0 3
Poland 3 1
Portugal 0 1
UK 0 3
Czech Rep. 1 2
Romania 0 2
Sweden 0 1
By analysing the first table it is possible to note that the recognition of the
EU by the other actors and by the institution itself, by allowing this to start their
own processes against members who are not complying with WTO rules and by
enabling other members to activate the WTO dispute solutions system against
the EU. The second table shows the participation of European countries in the
dispute settlement system since 1995. Noted that this can only Hungary, Poland
and the Czech Republic have initiated proceedings against third parties, and as
highlighted in the table, only three countries became members of the EU in 2004,
so it was not possible for these if they use EU mechanisms. This data is an
excellent example to demonstrate the supranational EU and corroborates the
notion that the EU acts in a unified way in the WTO, this action is done by
activating the dispute settlement mechanism or through direct participation in the
negotiations, as will be seen later in the text.
The above table also shows that the commercial area member countries
end up giving up their policies towards a more unified position. In this case, the
EU member states fail to activate the mechanisms for dispute settlement WTO
multilateral way, members of the EU using EU internal mechanisms to resolve
disputes between them, since the internal market issues are shared competence
between the EU and the member states and the EU has already developed a
number of mechanisms to regulate the market. Member countries also do not
want to activate the mechanism of the WTO dispute settlement alone and end up
using the European supranational structure so as to enable the engine when the
disagreements involve countries that are not part of the European bloc, giving
greater legitimacy to his cause and using a much larger market than theirs
domestic as a bargaining chip, since the mechanism of the WTO dispute
settlement allows taxation as punishment if the claim is accepted.
Another interesting highlighting point to the tables above is the sum of all
proceedings against EU member countries is 35, while in the same period the EU
has undergone 70 processes, twice the number of processes suffered individually
also showing a preference of other actors in dealing directly with the EU than with
each of the members individually.
Final Remarks
Throughout this study, two action fronts of the EU in international
institutions, the IMF and the WTO, and the differences and peculiarities of each
of the organizations and European action in these institutions, were presented.
EU participation in international organizations is a process that has slowly been
increasing over the past decades. However, asserting the existence of a
European Unit actor in the international system is still a sensitive issue. In fact,
the member countries of the EU is seeking to intensify their cooperation in order
to achieve greater bargaining power in the international arena as a group of
converging interests, as in the case of European foreign policy, but only in some
areas is possible to realize the effectiveness of this coordination of interests, as
well as at specific times. Thus, any generalization at this time on the theme would
be inadequate and incorrect
The two case studies presented throughout this research sought to show
the behaviour of the EU and its member states in international institutions. The
first case presented the role of the EU in SFI and consequently the IMF is a more
delicate example of affirming European operations because monetary and
financial areas are not the exclusive competence of the EU, except for the issues
of the Zone Euro. However, the creation of a unitary constituency for the EU is a
highly debated issue in the IMF reform. Among the scenarios discussed, creating
a constituency represented in the Eurozone shows the most likely due to greater
institutionalization, obtained from the European Central Bank and other
agreements to standardize member countries' policies. Even so, this would
generate a great impact of the voting power of countries belonging to the EU in
relation to other countries.
Academics (such as Agnès Benassy-Quéré and Carlos Bowles) and
politicians (i.e. Bini Smaghi and Willy Kiekens) believe that the EU can indeed
have a single representation at the IMF. However, the issue is completely related
to the reform of the IMF, making the institution come emphasizing that its
members should be independent of their countries international organizations.
Considering that the first condition of the formation of a unitary actor is recognition
by their peers and other actors, this problem has not appointed an easy solution
in the case of the IMF.
In the second case study, the involvement of the EU in the commercial area
as a unitary actor is clear. As demonstrated, the EU is not only an actor
recognized by the member states as well as the WTO. The trade issue is located
within the "former first pillar" of the EU by establishing the exclusive competence
of the European institution on this area. Furthermore, it is noteworthy that the
TEU itself has further strengthened the unitary EU position to ensure legal
personality and capacity to own goals.
The alignment of European policies in the international arena has been
occurring since the mid-1980s and became very strong after the creation of the
WTO in 1995, when the EU was given the status of full member of the WTO. The
European institutions, in particular the European Common Market, has great
impact on the way that member countries interact with the rest of the world and
with the competent international institutions. As members of the Quad and the
WTO, the EU actively participates in international negotiation, influencing the
agenda for discussion and decisions in the negotiations.
Returning to the hypothesis that, in recent decades, with increasing
integration in Europe, the EU has strengthened as a "European Actor" affecting
the international system, especially in various economic sectors and especially in
the field of commerce, through its role in WTO and the IMF, after taken into
account the definition of actorness worked here, we can say that there is a duality
of European action in the international arena. In other words, in the International
Financial System, neither the EU nor the Eurozone, have a formal representation,
however, the reforms of the IMF, the mere possibility of the emergence of a
European actor ends up influencing the entire system. If the EU is to develop
more centralized and supranational powers emergence of a European
constituency in the IMF would make the organization become polarized between
the U.S. and EU, further reducing the power of developing countries. On the other
hand if not created the unitary constituency and the EU increase its cooperation
and coordination, the block could still raise more than 30% of the votes in the
IMF. In the commercial context, there is no such duality.
However, it is concluded that in fact the EU is shaping up as a unitary actor
on the international scene and has the power to affect the international system
directly and even indirectly, as in the case of the IMF. As the integration deepens,
it has strengthened the prospect of unitary action in many international
organizations and multilateral negotiations that the EU participates.
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