EU Legal Personality: Treaty-Making Power and External Competence

Article 47 TEU provides that the European Union shall have legal personality. This apparently simple provision, introduced by the Treaty of Lisbon, represents a significant constitutional development. Before Lisbon, the European Community had legal personality, but the EU as such did not. The conferral of legal personality on the Union enables it to conclude international agreements, join international organisations, and act as a subject of international law in its own right. Legal personality is the foundation of the Union’s capacity to act externally and to exercise its treaty-making powers.

Legal Personality in the EU Legal Order

Legal personality is a concept derived from international law and constitutional law, denoting the capacity of an entity to possess rights and obligations under law and to act in the legal sphere. For the EU, legal personality under Article 47 TEU is internal (the capacity to hold property, contract, and sue or be sued before national courts) and external (the capacity to conclude treaties, participate in international organisations, and assert claims under international law).

Before the Treaty of Lisbon, the three-pillar structure created a complex situation. The European Community possessed legal personality under Article 281 of the EC Treaty and exercised treaty-making powers. The European Union had no legal personality and could not conclude international agreements in its own name. The Common Foreign and Security Policy and Police and Judicial Cooperation in Criminal Matters were intergovernmental, with limited capacity for external action. The Lisbon Treaty’s abolition of the pillar structure and the conferral of a single legal personality on the Union simplified the external representation of the Union and eliminated the confusion between Community and Union competences.

Treaty-Making Power of the Union

The Union’s power to conclude international agreements is governed by Article 216 TFEU, which provides that the Union may conclude an agreement with one or more third countries or international organisations where the Treaties so provide or where the conclusion of an agreement is necessary to achieve, within the framework of the Union’s policies, one of the objectives referred to in the Treaties, or is provided for in a legally binding Union act, or is likely to affect common rules or alter their scope.

Article 216 TFEU codifies the CJEU’s case law on implied external competence, particularly the ERTA doctrine. The provision establishes four grounds for treaty-making: express Treaty authorisation, necessity to achieve a Treaty objective, provision in a binding Union act, or likely effect on common rules. The grounds are disjunctive: any one is sufficient to establish external competence. The competence must be exercised in accordance with the principle of conferral, respecting the limits of Union competences.

The procedure for concluding international agreements is governed by Article 218 TFEU, which establishes a uniform procedure. The Commission (or the High Representative for CFSP agreements) recommends negotiations; the Council authorises the opening of negotiations and adopts negotiating directives; the Council may issue directives to the negotiator and designate a special committee; the Council, on a proposal by the negotiator, adopts a decision authorising the signing of the agreement and, subsequently, a decision concluding the agreement. The European Parliament gives consent or is consulted, depending on the subject matter.

The ERTA Doctrine and Implied External Competence

The Commission v Council (ERTA) case (Case 22/70) established the foundational doctrine of implied external competence. The case concerned a European Road Transport Agreement (ERTA) negotiated under the auspices of the UN Economic Commission for Europe. The Council adopted a negotiating mandate for the Member States, arguing that the Community had no exclusive external competence in transport. The Commission challenged this, arguing that the Community’s internal competence in transport implied external competence to conclude international agreements in that field.

The CJEU held that the Community’s authority to enter into international agreements arises not only from express Treaty provisions but also by implication from internal legislative competence. The Court stated that whenever the Community has adopted common rules to achieve Treaty objectives, Member States may no longer undertake obligations that affect those rules. The external power flows automatically from the internal competence to the extent necessary to achieve Treaty objectives and protect the common rules.

The ERTA doctrine has been extended and elaborated in subsequent case law. In Opinion 1/76 (Inland Waterways), the Court recognised implied external competence even before the exercise of internal competence, where internal competence had been conferred. In Opinion 2/91 (ILO Convention No 170), the Court held that external competence could be shared where internal competence existed but had not been fully exercised. In Opinion 1/03 (Lugano Convention), the Court held that external competence is exclusive where the international agreement affects common rules, requiring a detailed analysis of the relationship between the proposed agreement and existing internal rules.

Mixed Agreements

Mixed agreements are international agreements concluded jointly by the Union and its Member States because the subject matter falls partly within Union competence and partly within Member State competence. Mixed agreements are necessary where the Union lacks exclusive competence for all provisions of an agreement. They are characteristic of EU external action in areas such as environmental protection, development cooperation, and association agreements.

Mixed agreements raise complex legal issues concerning the allocation of competence, the duty of cooperation between the Union and Member States, and the international responsibility of the Union and Member States for compliance. The CJEU has held that the Union and Member States must cooperate in the negotiation, conclusion, and implementation of mixed agreements, ensuring unity of external representation (Commission v Luxembourg and Belgium (Milk Products), Cases 90/63 and 91/63). The principle of sincere cooperation under Article 4(3) TEU governs the relationship between the Union and Member States in mixed agreements.

The CJEU addressed mixed agreements comprehensively in Opinion 2/15 (EU-Singapore Free Trade Agreement). The Court held that the EU had exclusive competence for all provisions of the agreement except portfolio investment (competence shared with Member States) and investor-state dispute settlement (requiring Member State consent). The opinion clarified the division of competence in modern trade agreements and highlighted the practical significance of mixed agreements for EU external action.

EU Membership in International Organisations

Legal personality enables the Union to become a member of international organisations. The EU is a member of the World Trade Organization (succeeding the Community), the Food and Agriculture Organization, and numerous other international bodies. The EU has observer status in the United Nations General Assembly and participates in many UN specialised agencies.

The CJEU has held that the Union’s external competence may be exercised through participation in international organisations and that the Union may become a member of international organisations even where those organisations are not open to entities other than states, provided that the Union’s participation is possible under the organisation’s rules (Opinion 1/76). The EU’s membership in international organisations reflects its status as a subject of international law and its capacity to act on the global stage within the limits of its conferred competences.