Trade agreement

A trade agreement is a legally binding agreement between the EU and third countries. It is one of three special types of international agreements. The objective of these agreements is to foster and facilitate trade relations between the EU and a country.

Area of application

Member states are party to each trade agreement the European Union enters into with third countries. Member states are thus obligated to adhere to the provisions of a partnership and cooperation agreement.

Trade agreements may concern the following areas:

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  establish or change tariff rates
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  harmonisation of measures of liberalisation
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  trade policies
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  protective measures (anti-dumping mostly)
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  (export)subsidies
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  quota for import and export

In the case of other trade-related matters the EU has the right to negotiate and enter into trade agreements, but the European Commission has to be granted permission by the member states prior to starting negotiations.

Adopting partnership and cooperation agreements

The EU has a special agreement procedure¹ with which to adopt partnership and cooperation agreements.

The EU has exclusive competence when it comes to negotiating and entering into trade agreements. That is why the member states are closely involved when negotiating trade agreements, more so than in the case of other international agreements.

Trade agreements are based on the Treaty on European Union (TEU) and the Treaty on the functioning of the European Union (TfEU).

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  exclusive competence EC: first part TEU title I art. 3
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  instrument: part five TfEU title II art. 207

• 1. 

  The consent procedure is one of the special legislative procedures used in the European Union. The consent procedure is used for adopting most international agreements. The word consent refers to the role the European Parliament (EP) and the Council of Ministers (Council) play in the procedure. Both can either approve or disapprove a proposal, but neither can amend it.
   
• 2. 

  The European Union has a number of legal instruments to its disposal. These are used to make or coordinate policies, to take measures and initiate programme's, to facilitate the implementation of policies and to issue advice to member states. Legal instruments are divided into two categories, binding and non-binding instruments. Legal instruments specifically in place for implementing EU acts are binding, but have been put in a final, third section.
   
• 3. 

  International agreements are legally binding agreements between the European Union and third countries or international intergouvernmental organisations.