978-1285427041 Chapter 15

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CHAPTER 15

THE EUROPEAN UNION AND OTHER REGIONAL TRADE AREAS

CASES IN THIS CHAPTER

Commission of the European Communities v. Italian Republic (Public Monument Case)

Commission of the European Communities v. Portuguese Republic

Commission of the European Communities v. Italian Republic (Debt Recovery Case)

National Farmers’ Union and Secrétariat général du gouvernement (France)

TEACHING SUMMARY

One of the major players in international trade is the European Union. Not only is it the

grandfather of modern free trade areas such as NAFTA, but it also includes a monetary union

(more recently introducing the standard currency of the euro) and a political union. These

additional elements (which in some ways resemble the relationship among the states of the

USA) distinguish it from free trade areas and custom unions. The EU’s common market seeks to

eliminate barriers to the movement of goods, services, capital and workers. It also establishes

common tariff (known as the Combined Nomenclature) and commercial policies toward non-

member states. New states continue to seek EU membership while some present members

(UK) seek to alter their membership terms. Current economic and political differences within the

EU suggest changes in the area are likely to take place in the near future.

CASE QUESTIONS AND ANSWERS

Commission of the European Communities v. Italian Republic,(Public Monument Case)

1 What was the ECJ’s holding with respect to Italy’s claims regarding the cost to local

governments of maintaining cultural attractions and historic locations?

2. What was the basis for the ECJ’s decision that the Italian national government was

responsible for the conduct of local governments with respect to the fees charged for

admission to museums and cultural attractions?

Commission of the European Communities v. Portuguese Republic

Chapter 15: The European Union and Other Regional Trade Areas

1. What was the ECJ’s holding with respect to Portugal’s claims that the prohibition upon

window tinting was in the interest of public safety and eradication of crime?

Answer: It acknowledged the ban did promote those interests, but also said there were

2. What was the basis for the ECJ’s decision that Portugal’s law constituted an obstacle

to the free movement of goods?

3. How did the ECJ conclude that the prohibition on window tinting was an obstacle to the

free movement of goods when the Portuguese law did not contravene a directly

applicable EU law?

Commission of the European Communities v. Italian Republic (Debt Recovery Case)

1. What was the recommendation of the ECJ with respect to the consistency of Italy’s

regulation of debt collectors with its obligation to ensure free movement of services?

2. What provisions of the Italian debt collection licensing scheme were deemed

inconsistent with the free movement of services? How was each of these provisions

inconsistent with free movement?

Answer: The ECJ invalidated Italy’s requirement that licenses be obtained from local

3. The opinion noted that the EU had not adopted rules with respect to the regulation of

debt collectors. Nevertheless, the conclusion was that Italy’s regulations were

Chapter 15: The European Union and Other Regional Trade Areas

inconsistent with the free movement of services. Is this an example of the EU improperly

interfering with an area of economic activity that should be left to national governments?

Why or why not?

Answer: This question calls for student opinion.

National Farmers’ Union and Secrétariat général du gouvernement (France)

1. What was the ECJ’s holding with respect to continued French prohibitions on the

importation of British beef and veal?

Answer: The European Commission issued emergency directives to protect against

2. Does the decision give adequate regard to France’s concerns about the safety of British

meat products or does it sacrifice such concerns in the interest of eliminating a barrier to

the free movement of goods? What are the reasons for your conclusion?

Answer: This question calls for student opinion.

ANSWERS TO QUESTIONS AND CASE PROBLEMS

1. Answer: The court ruled against Germany, finding that a unilateral requirement of

2. Answer: The European Court of Justice ruled that Italy was not justified in requiring the

3. Answer: The EU has been very cautious about Genetically Modified Organisms (GMO),

Chapter 15: The European Union and Other Regional Trade Areas

in fact the largest producer of GMOs. In September 2003, the UN Cartagena’s Protocol

4. Answer: The ECJ struck down the German regulation. The court found that the EU

5. Answer: Regulations affect all member states as a law without requiring the individual

6. Answer: This question call for an opinion. Students may be directed to the Internet to

MANAGERIAL PROBLEMS

1. Answer: This is really an employment law question. Moreover, there is not

enough information here to provide a complete answer. Assumptions will be made as follows: (i)

2. Expansion into Europe means a choice between EU and non-EU countries.

Chapter 15: The European Union and Other Regional Trade Areas

and transparency of legal requirements so that U.S. businesses can better understand the

playing field and adapt to foreign rules of doing business. (A unified currency also adds to such

3. Answer: Strategically, exporting to Europe depends on the product. For example,

if Labco is a tobacco company, they will not be able to advertise their products because an EU

Directive banned newspaper, radio, magazine, and Internet ads effective 2005. The TV ban is

4. Answer: (a) Yes there are standards. A search could begin here: www.tietoy.org

or here: http://eu-lex.europa.eu.

Directive also excludes playground equipment intended for public use, automated playing

machines, toy vehicles equipped with combustion engines, toy steam engines, and slings and

catapults.

(d) The essential safety requirement is that the user of toys, as well as anyone

Chapter 15: The European Union and Other Regional Trade Areas

ETHICAL CONSIDERATIONS

This question calls for student opinion. Based on the concerns set forth in the text, students may

be asked whether further integration adds to the overall utility and greater good of the European

community and its citizens in a manner consistent with utilitarianism. Follow-up questions are

whether the success of greater economic integration is an adequate measure of the utilitarian

nature of the EU, and who should determine the course of future integration in the EU – its

citizens or the institutions. Finally, students may be asked to opine on what, if any, local

concerns of European citizens are sacrificed as a result of the current state of integration or will

be sacrificed as a result of the greater future integration.

TEACHING SUGGESTION / COOPERATIVE LEARNING ACTIVITY

This chapter presents a unique opportunity for students to explore negotiations as well as the

tension between furthering the interests of the EU (which also should further the interests of

individual EU member states) and furthering the interests of its individual states or allowing

them to maintain their individual identities.

Referring to any issue that affects the EU as a whole but at least two countries differently, divide

students into groups representing a number of countries. Instructors may also wish to have an

EU representative or EU arbitrator/ mediator. Ensure that two of the chosen countries have

different interests in the issue or have interests different from the whole of the EU. Present the

identified issue and have student representatives (who must vigorously represent the interests

of their countries) negotiate a treaty, agreement, or directive. Instructors may wish to run several

concurrent sessions of negotiations and compare and contrast the ultimate remedies suggested

by each negotiation group.

Additionally, if used as a graded assignment, the instructor can require country representatives

to first submit a set of negotiation guidelines, outlining their positions and critical issues. This will

provide a baseline for the later assessment of the negotiated remedy. Furthermore, this initial

set of guidelines will help demonstrate the individual student’s research into and understanding

of both the issues to be negotiated and their country’s position. The overall viability and

creativity of the ultimate “armistice” would also be factored into the assessment.