Crosscurrents in European Union External Commercial Relations: The Controversy Over the Germany-United States Treaty of Friendship

Abstract

In the annals of the conduct of trans-Atlantic economic relations there have been few cases as complex and curious from the legal and political perspectives as that involving the German challenge to the European Commission in the matter of the Utilities Directive of 1990. The invocation by Germany of the largely forgotten Germany-United States Treaty of Friendship, Commerce and Navigation of 1954 laid bare the rather unsatisfactory state of commercial legal relations between the European Union, its Member States and the United States. While the German challenge to the Commission might well have forced a restructuring of transatlantic commercial legal relations, a compromise resolution of the Germany- Commission dispute has been reached, and so for the near term at least the need for a restructuring of these relations has been averted. Nevertheless, the attention of the Commission doubtless has been fixed on the potential threat to its trade policy authority inherent in allowing the present state of affairs to continue. The longer term result is therefore likely to include an intensive review of the present state of trans-Atlantic commercial legal relations by the Commission and a proposal to restructure them in a post-Uruguay Round legal order in a manner that makes more clear the limits of Member State discretion.

Keywords: Germany, FCN Treaty, EU, common commercial policy, Commission

JEL Classification: K33