European Union as a Single Actor

Mario Afonso Lima (marioafonsolima@gmail.com)

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,

BUENOS AIRES, JULY 2014. THIS IS A PRELIMINARY DRAFT VERSION. PLEASE DO NOT CITE WITHOUT

CONSENT.

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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