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Master of the universe

Posted by Richard Wednesday, March 02, 2005

Not only does EU law takes primacy over the national laws of member states, it is also superior to rules made under the World Trade Organisation, even where EU law infringes WTO rulings.

That is the finding of the supreme court of the EU, the European Court of Justice, which yesterday ruled against a Belgian banana importer who sought to use a WTO ruling to challenge EU trade quotas.

The case arose after Belgian import company Van Parys complained to Belgium's highest court after it was denied licenses in 1998 and 1999 to import a certain quantity of bananas from Ecuador. The refusal was based on EU import quotas and the Belgian court passed it on the ECJ.

Van Parys argued that the EU rules broke international trade regulations, the WTO having ruled in 1997 that the EU contravened world trading rules through its system of tariffs and quotas that protected European, African and Caribbean banana producers against competition from US companies exporting from Latin America.

However, the ECJ held that a WTO ruling does not override European law. "WTO agreements are not in principle among the rules which the Court must take into account when reviewing the legality of measures," the judges declared.

Crucially, the Court said any judicial ruling would trample on the rights of EU institutions – and we mustn't do that, must we. Thus, the only time WTO decisions can be considered is when the EU has already modified its own rules in order to abide by the trade body's rulings.

For a treaty-based body that claims it is bound by the rule of law, this is an interesting decision. Adamant that member states must abide by the terms of the EU treaties, the Court is effectively saying that only its treaties matter and that member states must ignore other treaty obligations where there is conflict.

In one fell swoop, therefore, the ECJ has not only condoned member states breaching their treaty obligations to a world body, it has also said that they cannot comply with them unless they are permitted to do so by the EU. That, I suppose, elevates the EU to the status of master of the universe.