REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Initial Review of the scope of the Enforcement Regulation
Date: 2017-07-11
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: GATS, GATT, World Trade Organisation, common commercial policy, international agreement, international trade, provision of services, trade agreement (EU)

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   EUROPEAN COMMISSION  Brussels, 11.7.2017  COM(2017) 373 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Initial Review of the scope of the Enforcement Regulation  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT 
AND THE COUNCIL 

Initial Review of the scope of the Enforcement Regulation 

On  15  May  2014,  the  European  Parliament  and  the  Council  adopted  the  Enforcement 
Regulation1, providing the European Union with a legislative framework to enforce and 
defend the rights it enjoys under international trade agreements in a swift and effective 
manner and in accordance with the Lisbon Treaty and its international obligations.  

The  Enforcement  Regulation  ensures  that  the  European  Union  is  able  to  enforce  and 
defend its rights under international trade agreements by adopting trade policy measures:   

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that suspend concessions or other obligations under the WTO Agreement or other 
international  trade  agreements,  including  regional  or  bilateral  agreements, 
following the adjudication of trade disputes under such agreements; and  

that rebalance concessions or other obligations, by exercising its right under the 
WTO  Agreement  on  Safeguards  or  the  provisions  on  safeguards  in  other 
international  trade  agreements  to  respond  to  a  safeguard  measure  applied  by  a 
WTO Member, or  by exercising  its right under Article XXVIII of the GATT to 
respond to modifications of concessions applied by a WTO member.   

The  Enforcement  Regulation  empowers  the  Commission  to  adopt  such  trade  policy 
measures by means of implementing acts in the area of trade in goods, by introducing or 
increasing customs duties or quantitative restrictions on importation or exportation, and 
in  the  area  of  public  procurement.  The  Enforcement  Regulation  does  not  empower  the 
Commission to adopt such trade policy measures by means of implementing acts in the 
area of services or intellectual property.   

The  Enforcement  Regulation  requires  the  Commission  to  review  the  scope  of  the trade 
policy  measures  that  it  is  empowered  to  adopt  by  means  of  implementing  acts2.  The 
Commission must carry out such review in two steps.   

1   Regulation  (EU)  No  654/2014  of  the  European  Parliament  and  of  the  Council  of  15  May  2014 
concerning the exercise of the Union's rights for the application and enforcement of international trade 
rules and amending Council Regulation (EC) No 3286/94 laying down Community procedures in the 
field  of  the  common  commercial  policy  in  order  to  ensure  the  exercise  of  the  Community's  rights 
under international trade rules, in particular those established under the auspices of the World Trade 
Organization. 

2   Article 10 of the Enforcement Regulation. 

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No later than three years after the first instance of the adoption of an implementing act or 
no  later  than  18  July  2019,  whichever  is  the  earlier,  the  Commission  must  review  the 
scope  of  the  Enforcement  Regulation,  particularly  with  respect  to  the  trade  policy 
measures that may be adopted, as well as its implementation, and must report its findings 
to the European Parliament and the Council. The Commission will carry out such a final 
review and report its findings to the co-legislators by the agreed deadline. 

In the meantime, by 18 July 2017, the Commission must undertake a review to envisage 
additional  trade  policy  measures  in  the  field  of  services;  examine,  inter  alia,  a  certain 
numbers of aspects as listed in Article 10.2 of the Enforcement Regulation; and report its 
initial  assessment  to  the  European  Parliament  and  the  Council.  The  Commission  has 
carried out such an initial review and its assessment is set out below.  

In its initial review of the Enforcement regulation, the Commission has examined: (i) the 
international developments with regard to the suspension of other obligations under the 
General  Agreement  on  Trade  in  Services  (GATS);  (ii)  the  developments  within  the 
European  Union  with  regard  to  the  adoption  of  common  rules  on  services  sectors;  (iii) 
the effectiveness of possible additional trade policy measures as a means to enforce the 
European  Union's  rights  under  international  trade  agreements;  (iv)  the  available 
mechanisms to ensure the practical implementation, in a uniform and efficient manner, of 
possible  additional  trade  policy  measures  concerning  services;  and  (v)  the  implications 
for  service  providers  present  in  the  European  Union  at  the  time  of  adoption  of 
implementing acts under this Regulation. 

Based on its initial assessment, and for the time being, the Commission does not envisage 
proposing an extension of the empowerment under the Enforcement Regulation to adopt 
also  trade  policy  measures  in  the  area  of  services.  This  is  because,  as  of  the  entry  into 
force of the Enforcement Regulation on 15 May 2014, the Commission has observed no 
new developments that would require such an extension of the empowerment.    

First, the Commission has observed no new developments at international level in respect 
of the suspension of concessions or other obligations under the GATS. In particular, the 
Commission has enquired into whether any WTO Members requested authorisation from 
the Dispute Settlement Body (DSB) of the WTO to take countermeasures in the area of 
services.  As  of  15  May  2014,  WTO  Members  requested  DSB  authorization  to  take 
countermeasures in five disputes: Colombia – Textiles, India – Agricultural Products, US 
–  Tuna  II  (Mexico),  US  –  COOL  (Mexico),  and  US  –  COOL  (Canada).  None  of  these 
requests  for  DSB  authorization  to  take  countermeasures  was  filed  by  the  EU.  None  of 
these requests pertains to trade in services under the GATS. 

Second, the Commission has observed no new developments within the European Union 
in respect of the adoption of common rules on services sectors that are capable of altering 
the conclusion that, at this stage of development of European Union law, it is appropriate 
to focus on areas other than services for the purposes of the Commission's empowerment 
to adopt trade policy measures under the Enforcement Regulation.  

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On  16  May  2017,  the  Court  of  Justice  of  the  European  Union  rendered  its  Opinion  on 
whether the European Union enjoys exclusive competence to sign and conclude the EU-
Singapore  free  trade  agreement.  The  Court  declared  that  the  European  Union  has 
exclusive competence inter alia on those parts of the agreement relating to market access 
in goods and services (including all transport services).  

Notwithstanding  this  important  clarification  by  the  Court,  and  notwithstanding  the 
adoption  by the European Union of common rules on certain services sectors3, the fact 
remains that rules adopted by the Member States continue to apply in numerous sectors, 
whether harmonized at European Union-level or not. By way of example, certain rules at 
Member  States  level  still  condition  the  provision  of  services  in  a  certain  sector  to  a 
national authorisation scheme operating through licences, approvals or concessions. The 
co-existence between common rules and Member States' rules and authorization schemes 
in  services  sectors  remains  important  in  determining  whether  a  Commission's 
empowerment  to  adopt  trade  policy  measures  in  the  area  of  services  under  the 
Enforcement Regulation ought to be envisaged.  

Third, the Commission has observed no new developments as to the practical limitations 
on  how  workable  and  effective  trade  policy  measures  in  the  area  of  services  may  be, 
because  of  the  inherent  features  characterising  the  provision  of  services,  including  the 
enforceability  of  restricting  their  supply.  There  were  also  no  new  developments 
concerning the conditions – in particular the legal framework under the TFEU  – which 
are  relevant  for  the  situation  of  service  providers  present  in  the  Union,  in  case 
implementing acts would be applied in relation to them. 

In conclusion, the Commission's initial assessment has indicated that, since the entry into 
force of the Enforcement regulation, and for the time being, no international, European or 
substantive development is capable of justifying a change in an approach that envisages 
an expansion of  Commission's  empowerment to  adopt additional trade policy  measures 
in the area of services under the Enforcement Regulation.    

This said, the Commission will continue monitoring any relevant developments so as to 
be in a position to review the scope of the Enforcement Regulation and report its findings 
to  the to  the  European Parliament and the Council by 18 July  2019, also in  light  of  its 
experience  in  designing  and  applying  trade  policy  measures  suspending  or  rebalancing 
concessions or other obligations under international trade agreements.  

The Commission would like to underscore the growing importance of services in today's 
economy. Services are increasingly traded across borders and are tightly interlinked with 
traditional  manufacturing  trade  and  investment.  That  is  why  the  number  of  WTO 

3   On  24  June  2015,  for  instance,  the  Commission  adopted  Implementing  Regulation  2015/983, 
providing rules on the procedure for issuance of the European Professional Card and on the application 
of  the  alert  mechanism  pursuant  to  Directive  2005/36/EC  of  the  European  Parliament  and  of  the 
Council. As a result, since January 2016, the European Professional Card is available for a number of 
professions such as nurses, pharmacists, physiotherapists, mountain guides and real estate agents.   

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disputes  in  the  field  of  services  is  growing.  Taking  countermeasures  in  the  field  of 
services remains a possibility.   

The  Commission  would  also  like  to  reconfirm  that  EU  trade  policy  must  strengthen 
Europe’s  place  in  global  supply  chains  by  supporting  the  full  range  of  economic 
activities  through  which  European  companies  create  and  sell  value,  including  services. 
That  is  why  the  European  Union  has  played  a  central  role  in  negotiating  the  Trade  in 
Services Agreement and international trade agreements with a strong service component.  

The Commission would like to note in this regard that, should it prove necessary for the 
European  Union  to  resort  to  trade  policy  measures  not  covered  by  the  Enforcement 
Regulation,  including  in  the  field  of  trade  in  services,  the  Commission  could  make 
proposals  for  a  legislative  act  based  on  Article  207  of  the  TFEU  or  resort  to  other 
applicable procedures. 

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