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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.
(c) Toys mean a product or material designed or intended for use in play by
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.
