On really responsive rule-making? The EU-US transatlantic trade and partnership (TTIP) negotiations

Dr.Elaine Fahey, Senior Lecturer, The City Law School, City University London

The script

The EU and US have now completed 6 rounds of negotiations on the Transatlantic Trade and Investment Agreement (TTIP), the trade agreement under negotiation between the EU and US to cut trade barriers and ‘behind the borders’ barriers (technical regulations, standards, approvals) in a wide variety of sectors. It is touted as having the potential to become the global trade standard. Already, the epitaph is alleged to have been written on the Agreement. Yet while this misses the mark as to the theatre of global rule-making, on the other hand, skepticism is not unwarranted. It has at times appeared as an extraordinary experiment in rule-making.[1]  TTIP harbours ambitions to grow as a living regulatory entity. It has become rife with controversy, for its secrecy, for its possible inclusion of the Investor Settlement Dispute Mechanism (ISDM) and its impact on EU regulatory standards. Some have even tried to stop the negotiations using EU law itself, in the form of a failed European Citizens Initiative.

The history of transatlantic relations is littered with many failed attempts to integrate EU and US legal order through mutual recognition, even in very limited fields. TTIP had been poised to shake up this dynamic. It has become an exercise in ‘really responsive rule-making’. However, many questions remain about international negotiations and the standard of what is and should be ‘really responsive EU rule-making’:- I reflect on its script, production process and the cast of actors.

The production process

Most EU-US rule-making processes in the past has been conducted firmly behind closed doors, in inscrutable so-called ‘Dialogues’, in a range of fields that many will never have heard of. They traditionally privileged industry. The TTIP negotiations have marked an enormous shift in EU-US rule-making.

The TTIP negotiations have been ostensibly very open as a process. There is a lively EU TTIP twitter account (@EU_TTIP), RSS feeds, video-streamed meetings, broad public consultations and prolific document dissemination- more ‘quantitatively’ than its harshest critics might care to admit. In fact, the EU often has appeared as a transparency ‘manna’ in contrast to the tight-fisted US provision of information, even tweeting about its own transparency or pictures of public consultations and meetings. However, the TTIP negotiation mandate and draft text have long been leaked alongside the official channels of information, posted in reputable German broadsheets like Die Zeit, as well as dedicated leaking forums: http://eu-secretdeals.info/ttip/).  This leaking has threatened to take the wind out of EU openness sails.

The Ombudsman late into the negotiations recently raised questions as to the true place of openness in the negotiations and launched a public consultation. Her actions appear inadequately searching, and even late in the game. A range of key CJEU decisions on transparency in 2014 (in’t Veld, Mastercard etc; see the previous blog posts on those cases here and here) have not done enough to dent the exception surrounding international relations as regards access to information. In fact, the leaking of the EU-Canada free trade agreement (CETA) in August this year by the German broadcaster ARD demonstrates the truly dented credibility of the state of openness, international negotiations and the EU.

The cast of actors

The response by the Commission to steep and sharp public scrutiny of TTIP have been to set up more civil society dialogue engagement points (eg civil society advisory bodies) and more floods of consultations. These processes have delivered only partially-scrutable results. For example, it received nearly 150,000 for the ISDM, over half which will we never know about. The involvement of civil society in the TTIP negotiations has arguably become quite unwieldy.

The responses of the would-be incumbent trade Commissioner Malmstrom to the ISDM saga have provoked scorn for her breath-taking flip-flopping on its inclusion or exclusion from TTIP. The ‘flexibility’ about the normative agenda through ‘really responsive rule-making’ is a serious concern.

There is still much scope for more truly responsive rule-making, for example, a more vibrant institutional dialogue and for parliamentary participation, at both national and EU level. The powers of the European Parliament to approve any agreement reached have been raised as both a shield and a sword to any would-be critics of its credentials as a rule-making project. Many explore its potential within a living regulatory entity.[2] However, the vastness of the rule-making exercise may warrant a pause for thought on this. For the newly elected Parliament to make an impact on the negotiations, it must surmount a significant information gap and grasp the mantle of data. The place of data transfer within TTIP has had endless twists and turns- first the NSA affair, then the Google decision, then the decision by Microsoft to shift cloud computing and comply with EU law. Yet it risks being swallowed up within the broad swathe of TTIP. The TTIP negotiators face the question of how to be really responsive to this- and whether the European Parliament and Congress- neither a homogenous entity- will accept it all.

A battle is often bitter because the stakes are so small. EU-US trade relations have never been more liberalized or responsive to each other. It colours the context of what the stakes actually are. How ‘really responsive’ the negotiations can and should be has some legal and political distance to travel.

Editor's note: This blog post was previously published on the eutopia blog; thanks for permitting it to be reblogged here.

 

Barnard & Peers: chapter 3, chapter 24

 

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[1]See E. Fahey & M. Bartl ‘A Postnational Marketplace: Negotiating the Transatlantic Trade and Investment Partnership (TTIP)’ in E. Fahey & D. Curtin (Eds.), A Transatlantic Community of Law: Legal Perspectives on the Relationship between the EU and US legal orders (Cambridge: Cambridge University Press, 2014).

 

[2] Parker, Richard W. and Alemanno, Alberto, Towards Effective Regulatory Cooperation Under TTIP: A Comparative Overview of the EU and US Legislative and Regulatory Systems (May 15, 2014). European Commission, Brussels, May 2014. Available at SSRN: http://ssrn.com/abstract=2438242.

EU decision-making becomes a little more open: access to background documents drafted by consultants

Steve Peers

‘[The plans were] on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying, “Beware of the Leopard”!’

Arthur Dent, The Hitch-Hiker’s Guide to the Galaxy

Much of what the EU does is controversial. Think, for instance, of the free trade negotiations with the USA (TTIP), the regulation of many items from vacuum cleaners to genetically modified food, and the supervision (or sometimes control) of Member States’ tax and spending decisions. The substantive content of the decisions the EU makes on these issues will always disappoint someone, but in addition to that, there has long been a concern that the EU decision-making system is not sufficiently transparent. This has undoubtedly contributed to the broad feeling that the EU lacks legitimacy.

Back in 2001, the EU tried to address this by adopting a Regulation on access to documents drawn up by, or held by, the Commission, Council and the European Parliament. Attempts to amend this legislation have failed so far, so its application in practice depends on the extensive case law of the EU courts.

Some of this case law is excellent, and some is (with great respect) rather problematic. Fortunately, today’s important judgment of the EU’s General Court in the Mastercard case falls within the former category. The Court ruled in favour of access to background documents for EU decision-making drawn up by consultants, and so has significantly increased access to information on EU decision-making process.

Judgment

Mastercard applied to the Commission for some of the background documents drawn up by a consultant (EIM), which had been supplied to the Commission by EIM as part of the process of drafting a report on the impact of the costs and benefits for retailers of accepting different payment methods. The Commission refused access to the documents, on the grounds that it had not yet made a decision on the issues concerned (the ‘decision-making’ exception), and that the documents contained information on the commercial interests of the consultant.  

The General Court rejected both of the Commission’s arguments. On the first point, the documents in question did not relate directly to any specific Commission decision-making process as regards the application of EU competition law, but rather aimed to supply the Commission with more general information to inform it on the economic issues. Also, the Commission had not relied on this exception when initially refusing access to the documents. Furthermore, it didn’t matter for the purpose of the access to documents rules that the documents were interim, and the Commission had in any event shared most of the documents concerned with stakeholders.

On the second point (commercial interests of the consultant), the Court reiterated prior case law that the exception did not apply to any information about a business, but only to sensitive information concerning issues such as business strategy, sales figures et al. Applying that case law to the facts of this case, the Court did not accept the Commission’s argument that revealing the ‘trial and error’ in the draft documents produced by the consultant  would undermine its commercial reputation or reveal its secret methodology to its competitors.

So the Commission fully lost the case, and so the documents have to be released – although the Commission has two months to appeal to the Court of Justice if it wishes to.

Comments

While much of the case law on access to documents concerns the Commission, which has most of the administrative and executive power at EU level (except as regards aspects of external relations), this case highlights an important feature of the Commission’s work: its reliance upon third-party expertise. The facts of this case are the norm not the exception: many Commission impact assessments and reports rely upon one more reports drawn up by outside consultants. The European Parliament sometimes uses them too.

So anyone seeking to examine the Commission’s decision-making or the development of EU policies more broadly – whether they are journalists, researchers, NGOs or businesses like Mastercard – needs access to the consultant reports which the Commission relies upon to draw up its final proposals, reports and impact assessments. They usually contain very useful information and analysis which plays an important role in the analysis of the Commission’s final official documents which are based upon them.

Usually, the Commission publishes the consultants’ reports which it bases its documents upon. So what impact will today’s judgment have? First of all, it might result in public access to the consultants’ reports at an earlier date. Secondly, and more importantly, it will broaden access to the other background documents drawn up by consultants and made available to the Commission.

In fact, I have been involved in the impact assessment process myself several times, as an adviser to the main consultancy drawing up a report for the Commission.  I can’t discuss any of the details due to a confidentiality agreement, although I should clarify that I had no involvement with the report which was the subject of the Mastercard case.

However, suffice it to say that it is very common for consultancies to draw up interim reports and other background documents which might not be attached to the main impact assessment report. Of course, the consultancy, and advisers such as myself, also draw up drafts and working documents which are not disclosed to the Commission – and this judgment will not liberalise access to those. This is reasonable, for after all the Commission’s decision-making process will not have been influenced by documents which it hasn’t seen.  I’m a long-standing critic of the EU’s access to documents rules, and so I could only imagine the degree of Schadenfreude in the Commission and Council if it turned out that I am directly subject to the EU rules on access to documents. But that’s not going to happen.

What will the impact of this judgment be in practice? In principle, the judgment suggests that all background consultancy reports sent to the Commission ought to be released, unless there’s some other ground for refusal not relevant to the Mastercard case (see the discussion of the external relations exception below). The Court’s finding that the Commission’s decision-making wouldn’t be undermined by release is relevant to all other cases. So is the Court’s ruling that the commercial interest of the consultancy wasn’t damaged. It’s interesting to note that the consultancy didn’t intervene in the proceedings, which it surely would have done if it were worried about being damaged by the release of this document. With great respect to the expertise of EIM and other consultancies, their methodology for impact assessment is hardly the same sort of secret as Colonel Sanders' recipe for Kentucky Fried Chicken. 

The interim reports and other background documents drawn up by consultants may well contain information that could shed further light on the analysis in the final report. If there is a good reason not to rely upon the interim reports or background documents in some or all respect, the Commission and/or the consultant can simply explain this in its final document.

In principle, this judgment is relevant to background consultancy documents in any field of EU law. So businesses, NGOs, journalists and researchers could all rely upon it to gain access to documents which might be useful, whatever their field of interest may be. In particular, it is important that in this case the Court distinguished the line of case law (relevant to competition and state aid, for instance) allowing the Commission to refuse in principle access to all documents relating to individual decisions.

In the field of external relations, the impact of the judgment will be limited somewhat by the possibility to refuse access to any details of the EU’s negotiating mandates for treaties like the TTIP, on the basis of the ‘external relations’ exception in the Regulation. But it should be possible to redact the negotiating mandate from the reports and release the rest of the text (on this point, see further the discussion of another recent transparency judgment here).

This increased access to documents in turn raises two important questions of accessibility and access. First of all, will the Commission make available these background documents, and if so, when?  It’s clear from the facts of this case that the Commission did release some of these documents to ‘stakeholders’, but not to the general public. Surely it’s frequently the case that the Commission doesn’t consult every entity that might want access to the documents in question.

Secondly, how will anyone (besides the Commission, the consultancy, and any special group of consultees) know that these documents exist? Arthur Dent didn’t know about the documents that concerned the destruction of his house; and this was only the precursor to the destruction of the planet Earth without sufficient consultation. There’s an uncomfortable analogy there for climate change activists.

Unfortunately, the Commission seems to have been inspired by this fictional dystopia when designing its access to documents system. When the Eur-lex system of access to EU law was recently redesigned, the Commission removed the direct link to its access to documents register. The Eur-lex staff even denied that they’d done this.

You can still find the register if you Google it – or just click here. But its removal from the Eur-lex page might mean that some people don’t even find it. And if they do find it, they probably won’t find the background documents from consultants listed in it, since the scope of coverage of the register is very narrow. The Commission doesn’t seem to have grasped that Douglas Adams was engaging in humorous mockery – not suggesting a template for the Commission’s regime for access to documents.

Barnard & Peers: chapter 3, chapter 5, chapter 8

The CJEU increases public access to legal advice on international treaties

Steve Peers

Introduction

The different approaches between the EU and the USA as regards data protection continue to result in considerable friction. Even before the Snowden revelations about the surveillance of EU citizens by the American security services, there were arguments about American access to airlines’ passenger name records and information about money transfers.

Both of these disputes were eventually solved by means of a treaty between the US and the EU regulating the USA’s access to such information. As regards money transfers, that access enables the USA to carry out its ‘Terrorist Finance Tracking Programme’ (TFTP). While the first version of the treaty regulating access to the TFTP data was rejected by the European Parliament (EP), a second version was approved after the text was amended.

After the CJEU’s recent judgments concerning data retention and Google Spain, and in light of the pending Europe v Facebook case, it might now be questioned whether the EU/US treaties on passenger data and TFTP are invalid due to breach of the data protection rights guaranteed by EU law. However, that’s a topic for a future blog post.

In the meantime, the Court of Justice of the European Union (CJEU) ruled today on a related question. When the negotiations for the TFTP treaty were underway, the ‘legal base’ of the future treaty (ie, the precise EU powers to negotiate and conclude it) was disputed, and the Council’s legal service gave a legal opinion on this issue. A Member of the European Parliament (MEP), Sophie in’t Veld, requested access to the legal opinion and was refused, on the grounds that revealing legal advice relating to international negotiations would undermine those negotiations. She challenged this decision before the General Court, and was partly successful. 

The Council appealed that judgment to the Court of Justice, and has entirely lost in today’s judgment. While that judgment significantly increases public access to documents as regards legal advice, it still leaves intact the possibility of the institutions to refuse access as regards the substance of negotiations. 

The judgment

The EU’s access to documents legislation (Regulation 1049/2001) provides in principle for public access to EU documents. It contains exceptions allowing documents to be refused on grounds of (among other grounds) ‘international relations’ and ‘legal advice’. According to the General Court, the Council legal service’s advice on the TFTP treaty could be refused on the former ground, to the extent that it disclosed substantive details of the draft negotiating mandate, since this would damage the EU’s position by revealing it to the other side.  

However, to the extent that the legal advice did not reveal the EU’s substantive negotiating position, this ground for refusal could not automatically be applied. The General Court took into account the fact that an EP resolution had already made this particular legal base issue public, and that legal base disputes relating to international treaties can be the subject of advance rulings of the CJEU before those treaties come into force.

As regards this first issue, all of the Council’s objections to the judgment were rejected by the CJEU. The Court ruled that while legal advice relating to international treaty negotiations did not always have to be disclosed, it could not always automatically be refused either. Rather, the Council had to give reasons why disclosing the opinion to the public (after redacting all of the information relating to the substance of the negotiations) would undermine international negotiations.

Furthermore, the CJEU ruled that the General Court was right to apply a more stringent standard of judicial review as regards this issue as compared to the substantive negotiating mandate (where the EU courts would still leave a wide discretion to the EU institutions).

The second issue was the ‘legal advice’ exception. The CJEU had previously ruled, in the Turco case, that access to legal advice could only be exceptionally refused in legislative proceedings. By contrast, the negotiation of an international treaty is an executive power, conferred by the Treaties upon the EU Commission or the High Representative for EU foreign policy.

But nevertheless, the General Court had ruled that the legal advice exception could not be applied in this case either. The Council’s argument that it needed to keep legal advice secret to avoid embarrassment was too general and unsubstantiated. It was irrelevant that the legal advice concerned an international treaty, since the ‘international relations’ exception already addressed that aspect. Moreover, the EU legislation provides that the use of the ‘legal advice’ exception is subject to a public interest override. On this point, there was a close link to the EU’s legislative activity relating to police cooperation and personal data exchange, and waiting until the agreement was in force would rob public access to information of much of its purpose.  Again, all of the Council’s objections to the judgment were rejected by the CJEU.

Comments

In principle, this judgment could significantly open up the debate concerning the legality of planned international treaties. While the CJEU did not rule that legal advice in such cases should be disclosed as a rule (as legal advice relating to legislative procedures must), it is now clear that refusing access to such documents as a rule is a breach of the access to documents regulation. The Council (or Commission) must give detailed specific reasons to show why they think such documents should be refused because their release would undermine the conduct of negotiations in any specific case. This is obviously a difficult task, since to provide those reasons, those institutions would have to predict the hypothetical actions of third States without disclosing to the applicant much of the details.

Moreover, they must consider the public interest in access to that legal advice. The General Court’s further reasoning on this issue wasn’t expressly endorsed by the CJEU, but neither did the CJEU disavow it. So it is arguable that whenever there is a link between the treaty negotiations in question and the EU’s legislative activity, and/or the treaty in question touches upon an issue of broad public concern like data protection, then the public interest overrides the Council’s.

On the other hand, unlike the position as regards the EU legislative process, the CJEU has left intact wide discretion for the institutions to refuse to disclose their negotiating position, and therefore any details of that position in the legal advice can be redacted. Since there is an obvious close link between the legal advice and the substantive position, it remains to be seen whether the documents will still be intelligible.

Will the release of such documents damage the EU’s negotiating positions as regards international treaties? In the case of the USA, surely it has seen all the documents anyway, due to the efficiency of its espionage agencies. That will also be the case, to some extent, with some or all of the other countries the EU negotiates with.

As for the European Parliament, the Treaty anyway guarantees it information on all ongoing negotiations, and the CJEU has recently confirmed that this is an enforceable right. However, it is not yet clear how far that right extends, and in particular whether it extends to negotiating mandates. In any event, it is clear from the judgment that if the EP hears about a legal dispute concerning a planned treaty, and decides to make that dispute public by referring to it in a resolution, the Council’s argument that the legal advice cannot be disclosed is significantly weakened.

Another reason for the secrecy of the EU’s international negotiations may be to avoid complications arising from public debate. However, this strategy is largely self-defeating, since the secrecy itself engenders great suspicion from critics about what the EU and its negotiating partners might be planning, and so may fuel opposition to the eventual treaty (if the negotiations are successful). A clear case in point is the current talks on an EU/US free trade agreement.  

It is true to say that this process is ultimately democratic, since all international treaties agreed by the EU and third States then have to be approved by the Council, and most have to be approved by the European Parliament and often also national parliaments. However, it is not democratic in the full sense of the term, since there is a very limited opportunity for and open and public debate (as compared to the legislative process) before the negotiations have concluded.

Today’s judgment has opened up that debate somewhat, by making it easier to make a successful request for the legal advice relating to such negotiations. Sometimes the legal advice may relate to broad issues of public concern, such as human rights protection, but sometimes it will relate to more technical institutional points. The latter points could still be relevant politically, since they could determine (for instance) how much power Member States or the EP have to block a treaty if they object to the substance of it.

But overall, the judgment will not satisfy the demand for greater openness of the treaty negotiation procedure, and so the paradoxical effect of secrecy breeding opposition to treaties will continue. For those who seek greater public involvement in the process, getting access to more information on legal advice but no further information on the substance of the talks is like being served a salad when they are hungry for steak.

Barnard & Peers: chapter 3, chapter 24 

Access to documents: the Council might not implement a key CJEU judgment

Steve Peers

The EU is often accused by critics of a lack of openness and transparency – and often such criticisms are justified. This is particularly the case as regards the EU legislative process. In principle, this process ought to resemble the open process seen in national legislatures, with full public access to the drafts of legislation that passes through the legislative chamber(s).

However, despite the adoption of a general Regulation on access to documents in 2001, this aspect (among others) of EU transparency is problematic. The reason for this is that, within the Council, some Member States wish to keep their positions secret, at least while the negotiations are ongoing. Of course, this profoundly undermines the argument that citizens of each Member States, via national parliaments, can hold each individual government accountable for its action within the Council. For some Member States, though, accountability would bring embarrassment.

The CJEU, in accordance with its prior case law emphasising the importance of transparency in the EU legislative process, ruled in the Open Access Info judgment last year that the names of Member States in principle had to be released to the public. This ruling would seem to be straightforward enough. But the Council is trying to wriggle out of it.

According to an internal Council document discussed by Member States’ EU ambassadors (Coreper) last week, the Council is considering three options: referring always to Member State positions; making no reference to Member State positions; or continuing an unsystematic approach to this issue. The first option (full transparency) is rejected, because it sometimes this will not be ‘appropriate’, ie it might embarrass Member States. The second option is rejected, because it will be useful to have a record of Member States’ positions. So the suggestion is for the third option.

If this third option is chosen, what seems likely to result is that whenever a Member State believes that its position might be embarrassing, it will ask that there should be no listing of its name in the footnotes. Moreover, the Council document does not foresee any active transparency, ie disclosing a document with Member States’ positions as soon as it is drawn up. The new rules (when agreed) will only apply to documents when an individual requests a copy of them. By the time that the Council replies to such a request, discussions on a particular issue could have moved on and so there will not be an opportunity to have a public debate on whether a particular Member State’s position is justified.

So the whole process of challenging the Council in Court as regards this crucial aspect of EU legislative decision-making is ultimately likely to have only limited practical effect. Perhaps the next step in this battle will have to be non-judicial: either a demand by the European Parliament that the Council open up its legislative proceedings further (or at the very least, that both institutions open up the secretive ‘trialogue’ process); or a complaint to the European Ombudsman that the Council should proactively make all its legislative documents public without individual request.

Barnard & Peers: chapter 3, chapter 8