News | 2019

I. New Energy Charter Treaty

The European Commission has recently published a recommendation for a Council Decision authorising the entering into negotiations on the modernisation of the Energy Charter Treaty (ECT).

The ECT, signed in Lisbon in 1994, is an international agreement that regulates cross-border cooperation in the energy industry. It covers all aspects of commercial energy activities, including trade, investments and energy efficiency. The EU aims at amending the treaty provisions by negotiating innovative rules on investment protection, which would guarantee greater legal certainty to investors in the sector. Furthermore, the EU will call for the inclusion of provisions on sustainable development, climate change and corporate social responsibility.

Given the relevance of the ECT for the energy industry, it will be necessary to monitor the negotiations which are set to start in the following months.

II. EU to harmonise device chargers

After the failure of the negotiations with the industry for a new Memorandum of Understanding to harmonise chargers for data-enabled mobiles sold in the EU, the European Commission has initiated in May 2019 a public consultation to collect stakeholders’ opinions in order to find the best solution to the problem of fragmentation of the charging solutions.

The European Commission will take into consideration three policy options, including no common charging solution, voluntary approach, and a binding regulatory approach that should impose common chargers for the whole industry. This last option would determine economic benefits for consumers, as well as a positive impact on the environment through a reduction of e-waste. However, it will have a negative impact on producers and importers.

III. EU to strengthen its financial supervisory architecture

In the framework of the Capital Markets Union project, the European Parliament and Member States have recently reached a political agreement on new rules to strengthen financial supervision and to prevent anti-money laundering.

The new legal regime will improve the governance and the convergence powers of the European Supervisory Authorities. Furthermore, anti-money laundering will be tackled by granting the European Banking Authority a stronger mandate to collect and analyse information coming from the banking and financial sector. Thus, new stringent obligations are expected for market operators.

The politically agreed norms, however, will need to be followed by further technical work from both the European Parliament and the Council of the European Union. In light of the European elections, it will be important to monitor the orientations of the new parliament on this issue and to anticipate the developments in the inter-institutional negotiations.

IV. EU-US new trade negotiations

After the failure of the negotiations on the Transatlantic Trade and Investment Partnership (TTIP) in 2016, the EU has decided to engage again in new trade discussions with Trump administration. According to the EU negotiating directives, the new agreement should address only trade in goods and the related tariffs, excluding the contentious area of agriculture and food standards. However, President Trump has been very vocal on the need for the EU to liberalise its agricultural market and, among other things, to lift the long-standing ban on American hormone-treated beef.

The benefits of an EU-US agreement have been highlighted by several economic studies. According to the economic analysis drafted by the European Commission, the elimination of tariffs would lead to cost reductions for economic operators and an increase of bilateral EU and US exports of 8% and 9% respectively.

The following months will be crucial to test how serious is the engagement of both parties. European stakeholders are expected to contribute with their views, in order to ensure that their concerns are taken into consideration during the bilateral talks.

V. EU to revise State aid Guidelines for the agriculture sector

The European Commission has recently launched a public consultation on its State aid framework in the agriculture sector, which is set to expire in December 2020. State aid control in the period 2021 to 2027 needs to be adapted to the future legal framework of the Common Agricultural Policy. The European Commission aims at strengthening the level playing field in the agriculture sector as well as fostering competitiveness and growth of the enterprises concerned.

The review of the rules is also expected to take into consideration factors related to climate and sustainable use of natural resources. European stakeholders are thus invited to provide their input to shape the future legal framework. Environmental NGOs have already advocated for an end to State aids for those agricultural practices that have a negative environmental impact, such as intensive livestock farming. However, such an option is likely to affect negatively many small and medium enterprises.

VI. EU to accelerate its mobility reforms

The Mobility Package proposed by the European Commission risks to paralyse Europe. In April 2019, the European Parliament has approved its position to negotiate with the Council of the European Union on new rules concerning posting of drivers, rest times and cabotage. According to the European Commission, the new rules are expected to boost competitiveness and to improve social rights and working conditions of European drivers.

The newly proposed reforms have met with widespread opposition in Central and Eastern European Member States. The local syndicates have blamed the new norms to create disparity between rich and poor countries, and to advantage investments and business in targeted States.

The new Parliament will need to face this challenge and to make sure that Europe moves all together.