Symposium on the European Economic Community -- An Introduction
Dennis Thompson, Symposium on the European Economic Community -- An Introduction
Symposium on the European Economic Community -- An Introduction
Dennis Thomp son 0
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Symposium on the European Economic
The editors of the Northwestern Journal of InternationalLaw &
Business are to be congratulated for commemorating the 25th
anniversary of the founding of the European Economic Community with this
issue. This issue brings together many distiguished experts to deal with
the very diverse legal consequences of the Rome Treaty. From these
contributions it will be seen that the new legal order in Europe has
taken firm root.
Marc-Hubert Battaille examines proposals from the European
Commission for worker participation in corporate policy and
Dominique Brault compares French refusal to supply standards with those of
Elizabeth Freeman considers the interpretation of the Convention
on Jurisdiction and Enforcement of Judgments prescribed by the
Treaty under Article 200. Donald Holley writes on patent licensing, a
topic not immediately apparent as being subject to the Treaty but
which the Court has dealt with to revolutionary effect.
Walter Kolvenbach writes on the evolving labor relations
legislation, thus showing the growing extension of Community jurisdiction,
* Former Director for Restrictive Agreements and the Abuse of Dominant Positions in the
Directorate-General for Competition of the European Commission in Brussels.
while Valentine Korah turns her attention to one of the more
controversial issues under Article 85, the invalidity of contracts.
Professor Kurt Lipstein applies the classical conflict of law rules to
certain problems of the Treaty, while Professor E.-J. Mestmicker turns
to the uncharted area of the competition rules in the free trade
agreements with the EFTA countries. A.H. Peulinckx and H.A. Tielemans
survey the various rules of the Member States with regard to the
termination of agency and distributor agreements.
Lord Mackenzie Stuart, a judge of the Court, writes with authority
on its working, while Hans van Houtte considers the capacity of the
Community to sign international treaties.
For those readers unfamiliar with the structural workings of the
Community, Dr. Utz P. Toepke offers an historical and practical
Professor VerLoren van Themaat, a former Director General with
the Commission for Competition and currently an Advocate General at
the Court, and L. W. Gormley deal with quantitative restrictions on
imports and exports, and this author's former colleague, Jean-Francois
Verstrynge examines the "perfume" cases, which were perhaps treated
a little too discreetly by the Commission.
These articles are illuminating and necessary for those involved
with the legal problems of doing business in the Community. The
articles are also valuable for any attempt to understand the Community's
mechanisms which are so different in form, though perhaps not in
substance, from equivalent procedures in the United States.
Since the authors gathered for this commemorative issue deal
specifically with several diverse legal aspects of the Community, it is
appropriate to consider generally the overall health of the Community.
How far has it travelled along the path envisioned by its founders and
which direction will the Community take in the future?
Considering first the internal growth of the Community, it is
significant that many important developments have occurred only
recently. Progress has been made towards the establishment of the
European Monetary System; the Community successfully enlarged
itself by including Greece in 1979; and the European Parliament reached
a new level with the direct election of its members in 1979. As a result
of this newly-acquired legitimacy, the Parliament is able to speak with
greater authority. The responsibility of the Parliament to approve the
Community budget, representing the surrender of a measure of power
by the Member States, adds to the Parliament's importance in the
functioning of the Community. By its control over certain of the
Community's own resources, which may well be extended, the Parliament
exercises an independent authority in its own sphere, thus
strengthening the Community's "supranational" element.
Perhaps an even more significant development has been in the
field of political co-operation. It has been customary, over the past
several years, for the heads of state or government of the Member States to
meet and discuss matters of common interest, not only those within the
framework of the Rome Treaty, but concerns outside the Treaty as
well. Such activity is now formally institutionalized within the
European Council, in the belief that "the strengthening of the Communities,
the extension of political co-operation and the prospect of further
enlargement have made the reinforcing of existing structures imperative."1
The European Council consists of the heads of state or government,
accompanied by the President or Vice-President of the Commission,
thus giving the Community co-ordinate status with the Member States.
The Council meets three times a year, and last year, in addition to
discussing internal matters, also discussed the situation in the Middle
East, the Iranian hostage crisis, Lebanon's internal strife, the Soviet
invasion of Afghanistan, East-West relations and the tensions in Poland.
These discussions, in turn, led to further consideration of foreign affairs
in the Council of Ministers, ultimately resulting in the members of the
Community taking a more highly co-ordinated position as to external
affairs. This has perhaps been the most successful aspect of the recent
U.K. Chairmanship of the Council.
The Parliament has also shown itself to be uninhibited in its
wideranging surveys of foreign affairs and foreign policy. These activities
lend support to those who believe that there will be a "spillover" effect
from the strict obligations of the Treaty into unscheduled but necessary
areas where common policies are required.
Another outstanding feature of the Community is its impact on the
rest of the world. Not only is the Community party to free trade
agreements with the remaining European Free Trade Association countries
in Europe, but it additionally has a number of preferential trading
agreements with Mediterranean countries, as well as India, Pakistan
and other Asian nations, including the People's Republic of China.
The Community has a trading agreement with Canada, another with
Spain and is party to a number of world-wide commodity agreements
and agreements relating to specific matters such as textiles, fibers and
steel. Beyond these is the Second Lom6 Convention, between the
I E. NOEL, WORKING TOGETHER-THE INSTITUTIONS OF THE EUROPEAN COMMuNITy 34
(1979) (emphasis added).
Community and some sixty African, Caribbean and Pacific States
(which include many of the world's least developed areas), providing
for aid, trade and technical assistance to these countries.
Not the least important of the Community's external relations are
those with the United States. The Community and the United States
form two great pillars among the free market economy countries. Each
is the other's best trading partner, with 24 per cent of U.S. exports
going to the Community, and 16 per cent of the U.S. imports coming
from the Community (second only to 19 per cent from Canada). The
United States is the Community's best customer for exports (16 per
cent) and the largest supplier of the Community's imports (13 per cent).
They are also each other's best partner as far as direct investments are
The number of long-term bilateral agreements between the
Community and the United States are few, namely for the supply of nuclear
fuels (1958), co-operation in the peaceful use of atomic energy (1959),
an exchange of letters on co-operation in environmental matters (1974)
and an agreement made in 1977 relating to fishing in U.S. coastal
The main significance of the relationship, however, lies in the
mutual support both provide in the wider trading and commercial
agreements made with the General Agreement on Tariffs and Trade
(GATT), the Organization for Economic Cooperation and
Development (OECD) and other international organizations. The joint efforts
of the Community and the United States led to the successful
conclusion of the Tokyo Round, with its related agreements covering a
number of nontariff issues. Although commercial differences have
arisen from time to time over such issues as chickens, cheese, steel and
Japanese automobiles (and perhaps soybeans in the future), these are
minor irritations compared with the major interest that both the EEC
and the U.S. have in maintaining the stability of world trade. The
Community's common agricultural policy is not favored by the United
States. It will no doubt be the focus of criticism from west of the
Atlantic, but it is unlikely to lead to a serious confrontation.
As President Carter said in Brussels in 1978, his visit symbolized
"America's abiding commitment to a strong and united Europe, and to
the European Community." This policy is reflected in the number of
unofficial contacts between members of the European Commission and
the U.S. Administration, together with meetings between members of
2 EUROPE INFORMATION EXTERNAL RELATIONS-THE EUROPEAN COMMUNITY AND THE
UNITED STATES (1980).
the European Parliament and U.S. Congressmen, as well as the
meetings of the heads of state from the United States, Canada, Japan and
Community countries. The common interest extends beyond purely
economic relations to the maintenance of the NATO alliance for the
defense of the United States and Europe.
Given how far the Community has now come, it is important to
inquire where it was intended to go. The aim has frequently been
expressed in terms of "European integration", "European union", or
European unity". Exactly what these concepts specifically imply has
never been made clear. In 1946, Sir Winston Churchill spoke in Zurich
of "a kind of United States of Europe". The resourceful Jean Monnet
declared "Nous ne coalsonspas des Etats,nous unissonsdes hommes."
In seeking a union of peoples rather than states, it was clear when
Monnet founded his Action Committee for the United States of Europe
*that his objective, shared by other visionary Europeans, was for a full
European Federation. The main inspiration was the United States, a
federation, which in the words long ago of Justice Samuel P. Chase,
would lead to the creation of "an indestructable Union composed of
With a federation or union as the aim, the far more difficult
question was how this could be created from a number of fully sovereign
States by peaceful means. The strategy adopted was to launch the pilot
project which became the European Coal and Steel Community,
whereby certain very limited powers were taken out of the hands of the
national governments and entrusted to the High Authority, a European
executive, which would order the enforcement of its measures by the
Member States even if the latter did not consent to them.
This system showed promise, and gave new hope to an extension
of the European idea. The more ambitious proposals for a European
Defense Community and a European Political Community were
rejected in the 1950's, however, and a more circumspect approach
became necessary. Encouraged by the results of the Coal and Steel
Community, the leaders of the six founding States decided to go ahead
with plans for including the rest of their economies in a scheme for
European unification. At the Messina conference in 1955 the six
governments called for a fresh advance towards "the building of Europe,"
and they expressed their aim in a declaration as follows:
They consider that it is necessary to work for the establishment of a
united Europe by the development of common institutions, the
progressive fusion of national economies, the creation of a common market and
the progressive harmonization of their social policies.
When it came to drafting the Treaty of Rome, the first paragraph of the
Preamble declared that the Member States were "[d]etermined to lay
the foundations of an ever closer union among the peoples of Europe."
These thorough-going Europeans never intended that the Treaty
be an end in itself. They based their thinking on the conviction that if
only a loose confederation acting through the Member States could
once be created, it would inevitably develop (given the modem needs
of government) into a full and effective federation, whereby the central
institutions would have powers they could exercise independently of
the Member States.
For those who saw the Treaty as the cornerstone of an eventual
European Union, precedents were found in the historic developments
of the United States, the German Reich and the Swiss Confederation.
In the United States, the first independent constitution was enshrined
in the Articles of Confederation of 1777. This was soon found
insufficient, lasting only ten years before the Federal Constitution was
introduced. In the same way, the Zollverein of 1818 started as a customs
union between the German States under the auspices of Prussia (to the
exclusion of Austria), and succeeded in bringing all the members
within its net over the course of the following thirty years. In
Switzerland, too, the confederation which was formed by the Perpetual League
of the Cantons of Uri, Schwyz and Unterwalden in 1291 continued
until 1848 when it was transformed into a federal type of constitution,
although substantial powers were left in the hands of the Swiss
The formulation of the Rome Treaty was a masterpiece of political
strategy. The European Commission was given the power of
presenting proposals to the Council of Ministers, but the over-riding power
that had been given to the High Authority was not repeated. Decisions
would be taken by the Council of Ministers, which had the duty to take
certain decisions by a qualified majority vote. The Court of Justice was
made the sole interpreter of the provisions of the Treaty, and the
Parliament (not then directly elected) was given powers to review proposed
legislation, examine the budget and, if necessary, to dismiss the
members of the Commission en bloc. This arrangement left the Council in
the dominant position, although there were some provisions giving the
other institutions powers of a quasi-federal nature.
The initial results were less than some had hoped, due, in part, to
those, such as France's General de Gaulle, who wished to establish a
Europe despatries consisting simply of an association of States-each
free to exercise full sovereign rights. The Commission was treated with
less than full respect, and its right to make proposals to the Council was
largely ignored. Instead, the Council increased its secretariat and set
itself up as a rival to the Commission in the formulation of policy. By
the "Luxembourg Agreement" the principal of unanimity in the
Council was established whenever an "essential interest" of a Member State
was at stake, and, in fact, unanimity became the general rule. Of the
Community's institutions, only the Court of Justice enhanced its
reputation, establishing by a series of remarkably sure-footed judgments the
pre-eminent position of the Treaty over national law. In this, the Court
was greatly assisted by the rule that the Court gives only a single
judgment. The rule provided the judges with the mantle of unanimity and
ensured that, even if some doubts were reflected in the more Delphic
paragraphs of the decision, there could be no outside dissemination of
The Community system proved rigid enough to withstand the
strains of nationalism and managed to survive, albeit in a somewhat
lower key than was originally intended. The situation had relaxed
somewhat by 1973 when the Community added three
members-Denmark, Ireland and the United Kingdom. Other problems emerged on
the world horizon in the seventies, however, with the increased price of
oil, recession, unemployment and inflation. These pressures led to a
tendency towards protectionism, with the Member States reluctant to
indulge in further European advances. Although it was agreed in 1974
that unanimity should not always be required in the Council of
Ministers, the Council nevertheless remains deeply attached to unanimous
agreement. This, in practice, is to give Member States a right of veto.
Thus, the Council, the Committee of Permanent Representatives
(COREPER) and the other Council committees are often engaged in
laborious and time-consuming attempts to secure unanimous
agreement, based more on assembling a package accommodating the various
national interests of the Member States than finding a solution which is
in the interest of Europe as a whole. In spite of this obstacle the
Council has weathered many controversial storms, including the recent
questions of the United Kingdom's financial contribution, mutton and lamb
production, fishery rights and other sensitive political issues.
Thus far, the Commission has not recovered its intended prestige.
This may be its own doing, since the Commissioners have generally not
acted as a collegiate body constituting a European "cabinet". Focusing
on the administration of their particular portfolios, they have not
concentrated on the formulation of a common position among themselves.
Examining the Community's status and position today, some of
the more enthusiastic politicians have been disappointed. Signor
Northwestern Journal of
International Law & Business
Emilio Colombo, the Italian Foreign Minister, speaking on behalf of
his people, said recently:
We realise we have already achieved a great deal, and not without
difficulty. We are not however satisfied ... because we believe that
Europe has lost its drive, and lost the ideals for which it was brought into
being, and has today become a fount of fragile compromise, slow to be
reached and not always fair to all.
There are however reasons for taking a more optimistic view in the
longer term. There is still a strong commitment to the concept of a
European union. As recently as December 1978, the European Council
appointed a committee of "Three Wise Men" to "consider the
adaptation of the mechanisms and procedures of the Institutions which are
necessary, on the basis of the Treaties and their institutional systems, to
assure the harmonious functioning of the Communities andtheprogress
The "Three Wise Men" reported5 their view that the Council must
function more efficiently, and recommended a greater use of majority
voting, even in the committees. They urged that a special sense of
responsibility and initiative be assumed by the presiding Member State
in the Council. As for the Commission, the "Wise Men" advocated a
collegiate-type cabinet, with the Parliament responsible for ensuring
co-operation between the Commission and the Council. On the issue
of European union, which they regarded as "not so much of a definite
goal as of a direction of movement", the "Wise Men" emphasized the
need for cohesion in the Community to preserve what has already been
achieved as well as preserving the capacity to make necessary
modifications (perhaps as to the common agricultural policy). Their report
stressed the need for the Member States to act together in facing the
rest of the world, particularly vis a vis energy resources, the
international division of labour and the Community attitude toward the
developing countries. Only by facing its difficulties together, the authors
concluded, can the Community avoid degeneration into national
rivalries. As a result, the Commission has been charged with making an
annual report to the Council on the progress towards European union.
Whether progress will be made in this direction remains to be
seen. It may well be that a period of consolidation is required for the
present decade. If so, the essential elements will be respect for the rule
of law, particularly on the part of the Member States, and strict
obser3 London Times, Apr. 7, 1981.
4 Emphasis added.
5 B. BIESHEUVAI., E. DELL & PL MARJOLIN, REPORT ON THE EUROPEAN INSTITUTIONS
vance of the Treaty provisions. Then, perhaps, the Member States may
eventually find it to be in their individual and collective best interests
to strengthen the scope and authority of the institutions of the
So that this directional choice-and the myriad more specific
choices facing rule-makers, politicians, lawyers and businessmen-may
be made with a clear understanding of the Community's legal
structure, this symposium issue of the NorthwesternJournalof International
Law & Business is presented to commemorate the 25th anniversary of
the signing of the Treaty of Rome.