EU Liability and International Economic Law

by Armin Steinbach

Overview

The book provides both a legal and economic assessment of an increasingly important issue for the EU: the question of whether individuals can hold the European Union liable for damages they suffer due to its infringement of international economic law. However, liability regimes vary depending on the issue concerned. In international trade law the individual holds a weak position, being deprived of both legal remedies to seek annulment and damages. This is due to the constant refusal of the direct effect of WTO law. By contrast, international investment law has been designed in an 'individualistic' manner from the outset – states agree reciprocally to grant certain procedural and substantial individual rights, which they invoke to claim damages before international tribunals rather than domestic courts. The divergent role of the individual in the respective area of international economic law leads to a different set of research questions related to liability. In international trade law, the doctrinal exercise of de-coupling the notion of direct effect from liability is at the core of establishing liability. In international investment law, liability is connected to a number of issues emerging from the recent transfer of competence pertaining to investment issues from Member States to the EU and the nature of investment agreements as mixed agreements. Against this backdrop, exploring liability issues in the area of international economic law reveals a heterogeneous set of questions depending on the area of law concerned, thus offering different perspectives for studying liability issues.

Product Details

ISBN-13:	9781509901593
Publisher:	Bloomsbury Academic
Publication date:	06/01/2017
Series:	Modern Studies in European Law , #74
Pages:	216
Product dimensions:	6.14(w) x 9.21(h) x 0.50(d)

About the Author

Armin Steinbach is Senior Research Fellow at the Max-Planck Institute for Research on Collective Goods (Bonn, Germany) and Associate Member at Oxford University's Nuffield College.

Table of Contents

Preface v

Introduction 1

Part 1 EU Liability and Violations of WTO law

1 Analytical Preliminaries 9

I Terminological Issues-The Term 'Direct Effect' 9

II The Line of Argument 10

III Relevant Damage Situations 11

A Case group A 11

B Case group B 12

C Case group C 12

IV General Principles Common to the Laws of the Member States 13

V The Standard of Unlawfulness 15

2 The Lack of Direct Effect of DSB Rulings 20

I Direct Effect of DSB Decisions in the Court's Jurisprudence 21

A Atlanta 21

B Biret 21

C Léon van Parys 23

II 'Whether' to Comply with the DSB Ruling 24

III No Unconditionally Regarding the 'How' of a Compliance Obligation 26

3 Dispensability of Direct Effect for EU Liability 31

I Introduction 31

A The direct effect of WTO law as a liability prerequisite 31

B Francovich and delinking direct effect from liability 34

II Effet Utile and Article 216 Para 2 TFEU 35

A The duty to implement DSB rulings 37

i Article 216 TFEU and international law treaties 37

ii Structural comparability of Articles 216 para 2 TFEU and Art 288 TFEU 40

iii Effet utile and obligations under Article 216 para 2 TFEU 42

iv Effectiveness of Article 216 para 2 TFEU 43

III The Need for Legal Redress 50

A Individual rights and WTO violations 51

B Case groups and the need for legal relief 52

IV The Principle of Cooperation Under Article 4 Para 3 TEU 55

A The relation between Article 4 para 3 TEU and Article 216 para 2 TFEU 56

B Obligations resulting from Article 4 para 3 TEU 58

4 DSB Ruling and the Protection of Individual Rights 62

I The Requirements of Individual Protection Under Article 340 Para 2 TFEU 62

II The Protective Character of WTO Law and DSB Decisions 64

A Lack of legal standing of individuals 64

i Indirect protection of individuals under WTO law 65

ii Indirect protection of case group B: the example of hormones and bananas 68

iii Protection of victims of retaliatory measures (case group C) 70

III Interim Conclusions on the Quality of WTO Law as a Schutznorm 71

5 Identifiability of an Individual Right 72

I Addressee of the DSB Decision 72

II The Declaratory Character of the DSB Decision 73

III Identifiability in the Bananas and Hormones Disputes 74

A Case group B in the banana dispute 74

B Case group B in the hormone dispute 75

C Case group C 77

6 Further Liability Requirements 79

I The 'Sufficiently Serious Breach' Requirement 79

II Damage 83

III Causality 84

7 Damage Claims and Fundamental Rights 87

Part 2 Economic Analysis of Liability for WTO Violations

8 Analytical Foundations 95

I Economic Analysis and Liability 95

II Institutional Economics and EU Liability 98

III Incomplete Information and the Compliance Standard 102

9 Compensation of Financial Losses and Over-deterrence 107

I The Level of Welfare Maximising Protectionism 107

II The Paralysing Effect Resulting from WTO Liability Claims 109

A The effect of tariffs and optimal tariff policy 111

B Private versus social damages 113

i Damages incurring to case groups A and B 113

ii Damages of case group C 115

iii The method of damage calculation by WTO arbitrators 116

III Interim Conclusions 119

10 Liability Rule and Incentives 120

I No-Liability Rule and Malincentives 120

II Incentive Scheme and Liability for WTO Breaches 121

A Internalisation of damages through political costs 121

B Liability for 'sufficiently serious breaches' to avoid paralysis of the legislator 122

III Conclusions 124

Part 3 EU Liability and Investment Treaties

11 Introduction 129

I Investment Agreements as Mixed Agreements 131

II New EU Rules on Investor-State Disputes 133

III Liability Issues Under the New EU Investment Policy 134

A State-to-State dispute settlement as under WTO law? 136

B 'Regulatory chill'-comparison with the WTO case 138

12 Responsibility of Union and Member States for Breaches of Mixed Investment Agreements 141

I Attributing Responsibility to the Union 143

II Attributing Responsibility to the Member State 147

III Joint and Several Liability of EU and Member States? 149

13 Internal Allocation of Financial Responsibility within the EU 151

I Difficulties in Attribution 152

II Apportionment of Financial Responsibility 152

III Who should be a Party to the Dispute? 154

IV Cooperation in Proceedings 156

V Liability Claims between Union and Member States 158

A Compensation or claim for damages? 158

B Enforceability 159

i Union versus Member State 160

ii Member State versus Union 161

VI Conclusions 161

Summary 163

References 169

Index 191

Editorial Reviews

... this book amounts to a very important (and timely) contribution on a hot topic which is set to become even more relevant now that the EU has been given legislative competence on foreign investments, while at the same time international trade is set to sail some rougher seas ahead. Finally, it is recommended to the reader because it opens a window on German legal scholarship which is not always accessible to EU lawyers.

From the Publisher