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The current situation

The common commercial policy has been an area of Community responsibility since 1957.� Since then, the concept has remained unchanged in the Treaty. � It essentially concerns trade in goods (and certain commercial aspects of services and intellectual property).� However, in today's world international trade covers many other aspects as well.

Trade agreements concerning goods can be concluded on the basis of Article�133, which provides for the Council to act by qualified majority.

However, if an agreement (also or solely) concerns concessions relating to services, intellectual property or investments, the general rules of the Treaty apply.� Under those rules, agreements are concluded by qualified majority or unanimously depending on whether the Community's internal decisions in that area are taken by qualified majority or unanimously.� In addition, Member�States often wish to exercise their residual powers in those fields in which no internal Community rules apply or do not yet apply.

As a result, trade agreements concerning different fields very often have to be concluded unanimously, or even by the Community (Council decision) and by all the Member�States as well.� This entails ratification by national bodies ("mixed" agreements).

The Amsterdam Treaty introduced a method which could provide a partial solution to the problems resulting from the legal situation outlined above.� Under Article�133(5) the Council can deal with all matters relating to services and/or intellectual property as an integral part of commercial policy.� However, this link would require a unanimous decision and it has not been used so far.

Why change the current system?

In today's world, services account for 25% of the Union's trade with third countries, and as much as 50% of its trade with the United States.� Half of our direct investment abroad is service-related, and the Union is the second-largest investor in the world.� In conducting their business activities, Community firms rely on effective protection in the form of copyright, patents, trademarks and designations of origin.

The rules of international trade have changed too.� No longer do they merely cover goods, as they did in the 1960s; today, services, investments, intellectual property, public procurement and competition rules are also regulated.� A brief comparison of the 1947 GATT and the WTO, or of bilateral trade agreements in the past and now, provides sufficient evidence that international law has adapted to developments on the ground.

Against this background, the concept of a common commercial policy as enshrined in the Treaty has continued to focus primarily on goods.� The specific decision-making procedure for the common commercial policy (enabling agreements to be concluded by qualified majority) applies only to goods.� Agreements on certain aspects of services, investments and intellectual property have to be approved unanimously, and in some cases even by the Community and by all the Member�States (mixed agreements).

One practical consequence of mixed agreements is that the Community's dealings with third countries have to be conducted on a unanimous basis.� Statistically, enlargement will increase the risk of a Member�State using its veto to prevent the Community adopting a common position.� This collective weakness may work to the advantage of the Community's trading partners.

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The Intergovernmental Conference decided that trade agreements relating to services or commercial aspects of intellectual property can, in principle be concluded by the Council acting by qualified majority. Although there are exceptions to this principle, it has decided to put an end to most "mixed agreements" and to open decision-making to qualified-majority voting.

Among the exceptions to this principle, based on the need for parallel internal and external rules, it should be noted that the Council cannot conclude agreements harmonising national legislation in the fields of culture, education or human health where the Community does not have internal powers to harmonise. Moreover, the Treaty provides that the Council must act unanimously where the agreement contains provisions requiring unanimity to adopt internal rules or where the agreement relates to an area where the Community has not yet exercised its powers at the internal level. The Treaty also maintains transport as a separate sector.

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