Case 22/70, Commission v Council (European Road Transport Agreement), Court of Justice of the EC,  ECR 263
Relevance of the case
It is difficult to overstate the relevance of the ERTA case for the development of the EU. If Van Gend & Loos established that the EU was a new legal order whose acts could be directly effective in its member states, and Costa v ENEL established the supremacy of EU law over the law of the member states, ERTA marked the beginning of the EU’s role in global affairs by creating an almost unlimited power for the EU to act externally, regardless of the silence of the treaties in this matter, and often pre-empting the member states from taking individual action. Thus, ERTA (often referred to under its French acronym AETR) is generally considered as an essential component in the process of the development of the EU from intergovernmental organization to constitutional entity, and justifiably so.1
After attempts in the early 1960s to create a pan-European regime (extending beyond the EU) relating to road transportation had come to naught, the issue was picked up again in 1967, sponsored by the UN Economic Commission for Europe. In the meantime, the EU had adopted internal legislation on road transportation. After the Council had reached an agreement in March 1970 as to how the (then six) member states should behave in connection with the conclusion of the agreement, the Commission started proceedings against the Council, aiming to get the relevant Council proceedings annulled. In the Commission’s view, the power to conclude an agreement such as ERTA had come to rest exclusively with the EU: art. 75 of the EEC Treaty (as it then was) created a general transport power for the EU and had to be read so as to also encompass treaty-making powers in the field of transport. Hence, there would be no independent treaty-making power left for the member states, contrary to what the Council assumed when it adopted its proceedings in March 1970. The Council, on the other hand, claimed that the EU could only act on the basis of powers conferred upon it, and since the treaties contained no express provision on external transport policy, the matter was rightly left to the member states, acting on instructions from the Council. 
II. Legal question
Quite a few issues were raised by the case, including the legal status of Council proceedings and the question of the EU’s international legal personality. Technically, the legal question before the Court was whether or not the Council proceedings should be annulled, and the Court approached the matter in this way: as a request for annulment. It ended up dismissing the Commission’s application and rejecting its submissions. The main question, however, boiled down to this: does the Treaty endow the EU with the power to engage in external relations, including treatymaking, in the field of transport? And if so, does it do so at the exclusion of the member states?
ERTA is a strange and puzzling decision, for a variety of reasons. There is, first, the technical point: the Court dismissed all the Commission’s submissions, finding in the end that no violation of art. 75 by the Council had occurred. Yet, this is not why the case is so often invoked, discussed, and analyzed. Instead, people refer to ERTA as support for the proposition that the EU has certain external powers granted by implication which, curiously enough, would seem to suggest that the Council actually did do something contrary to art. 75 when it adopted its proceedings in March 1970.
This seeming contradiction is solved by the court in twofold fashion. First, it stipulates that art. 75 still leaves a considerable role for the Council, albeit not for the individual member states. The point is made with great subtlety, but is really vital: the Court distinguishes the Council from its members (the member states). The member states cannot act individually any more, but the Council can. To the extent that the Council took a decision (instructing the member states how to act), it had done nothing wrong. Second, to quell all remaining doubts, the Court introduces a temporal element: when the ERTA negotiations first started, in the early 1960s, the matter clearly fell within the Council’s jurisdiction. The later negotiations were presented as continuations of those earlier ones (paras 82-5); therefore there was no new agreement, and therefore all that had happened was that in the meantime the Council’s freedom had been hemmed in by means of internal legislation (Regulation No 543/69). This was, in a sense, dictated by circumstances: it would have been awkward, to say the least, to present the prospective treaty partners with the situation in which their negotiating partners (the Six) had all been replaced by the EU.
Indeed, as a matter of fact, the Court could have stopped at Regulation No 543/69. In the case at hand, a regulation had been adopted which gave the EU the power to conclude transport agreements with third states—end of story. The Court, however, must have sensed that the issue was of greater relevance than the mere circumstance of a road transport agreement, and must have felt the need to make a statement of principle about the powers of the EU. Moreover, stopping at Regulation No 543/69 would have been difficult to reconcile with the idea that the Council had gradually lost some of its powers; it would have suggested that after 1969, the Council actually had done something wrong, and this was a conclusion the Court wanted to avoid.
Hence, the Court needed to express itself in more general terms, and could not base its position on a transport regulation alone. And thus the Court set out to launch its own version of the implied powers doctrine.
The implied powers doctrine has been recognized as being of relevance to international organizations since the Permanent Court of International Justice (PCIJ) first made reference to it in the 1920s, in a case involving the exchange of Greek and Turkish populations. In this early decision, the PCIJ opted for a narrow approach to implied powers: an implied power, so it suggested, is a power that is necessary to give effect to an expressly granted power. Simply put: the power to take the dog for a walk would necessarily have to include the power to put the dog on a leash, since otherwise the power to walk the dog could not be realized. In this limited version, the implied powers doctrine is beyond controversy, and has a long pedigree in federal thought.
Two decades later, the ICJ greatly expanded the scope of the implied powers doctrine by suggesting that powers can be implied not only if needed to give effect to express powers, but can also be implied if needed to secure the functioning of the organization. In Reparation for Injuries, it felt that the UN had the power to bring a claim on behalf of its employees because otherwise the UN would not be able to function properly. Apart from the hyperbole involved in the finding (surely the UN can achieve a lot even without being allowed to act on behalf of its employees), this was a considerable stretching of the notion, way beyond the PCIJ’s version of the doctrine. Accordingly, it came with a word of warning from one of its dissenting judges (not coincidentally perhaps the US judge on the bench, who had been steeped in federal thought during his forty years in the US administration): too broad a notion of the implied powers may be unjustifiable, and may result in the organization losing legitimacy in the eyes of its member states.
In ERTA, the CJEU devised yet another version, arguably even more far-reaching than the Reparation version: it held that the EU’s power to conclude external agreement was implied because it was necessary not so much to allow the EU to function properly, but in order to safeguard ‘the unity of the Common Market and the uniform application of Community law’ (para. 31).
In order to reach this conclusion, the Court took five distinct but related steps. First, it observed that the treaties were silent on the role of the EU in the conclusion of agreements on transport policy with third states. Since the treaties were silent, it was imperative to look at the general system of the EU’s law on external relations (para. 12).
Second, the Court started by assigning international legal personality to what was at the time still the EEC. This, so the Court claimed, followed from the terse statement in what was then art. 210 EEC, according to which the ‘Community shall have legal personality’. It followed from this personality that the EU would have the general capacity to conclude treaties (paras 13-14). Curiously though, any type of argument is missing: there is no reference to any concept of legal personality under international law, or how international legal personality is usually created or established. Much less is there any discussion about the circumstance that art. 211 further specifies the scope of the EU’s personality under the laws of its member states, and thus art. 210 could just as easily have been interpreted as a general grant of domestic (as opposed to international) legal personality.
Having just established that the EU has international legal personality and thus also a general treaty-making capacity under international law, the Court’s third step, in para. 15, is to lay down a method for determining whether a specific treaty-making power has been granted. This, so the Court holds, depends on the entire scheme of the Treaty as well as on its substantive provisions.
This paved the way for its fourth step: internal EU measures cannot be separated from external action (para. 19). Whatever the EU can do internally, it can also do externally: in foro interno, in foro externo, as it is sometimes put.
And if this was not yet enough, any remaining gaps in the argument would be closed with the help of the fifth step. The Court invoked the EU’s very own deus ex machina, the principle of fidelity (Gemeinschaftstreue), at the time laid down in art. 5 EEC: the member states must abstain from any measure which might jeopardize the attainment of the EU’s objectives. These five steps together inexorably lead to the conclusion that the EU has an implied power to conclude agreements in the field of transport and, what is more, the member states are pre-empted from acting: not only had they transferred a legislative internal power to the EU, this also affected their external prerogatives. And even if this were too radical an interpretation of the treaties, there was always art. 5 to fall back on: any individual member state action would necessarily run afoul of the principle of fidelity.
Viewing the case from the perspective that ERTA was meant to safeguard EU law rather than be ‘merely’ concerned with the division of powers between the EU and its member states also helps to make sense of the otherwise curious circumstance that the Court did not resort to the general ‘additional power’ clause of what was art. 235 EEC: if necessary for the attainment of the objectives of the EU, the Council can unanimously agree on new powers. This was the designated route for the creation of powers additional to those already created in the treaties, and was the preferred solution in the eyes of Advocate-General Dutheillet de Lamothe: if the EU wants to conclude external transport agreements, it can do so on the basis of art. 235 EEC. The fact that the Court paid little attention to this possibility suggests that at its heart ERTA is not so much about a conflict concerning powers, but a conflict concerning the integrity and unity of EU law—and for this art. 235 offers no solace.
Given that ERTA marks the emergence of the EU as a player on the international scene, and given its tacit reliance on general concepts of international law, it is astonishing that the entire judgment makes no reference to international law whatsoever. There is no discussion of what international legal personality means in international law: whether it can indeed be derived from a terse and not very explicit treaty provision, or whether it can indeed serve, as the Court seems to suggest, as a threshold condition for legal capacity under international law. It is not even the case that there is a flawed discussion—there is no discussion whatsoever. Likewise, despite its pedigree in international law, there is no discussion of the implied powers doctrine as established by the PCIJ or developed by the ICJ; there is, indeed, nothing about the very notion of powers of international organizations. All this signifies, it would seem, a reluctance on the part of the EU to be seen as somehow being captured by international law: if Van Gend & Loos rubber-stamped the existence of a new legal order, then ERTA continues it: the EU is neither international organization nor state and, importantly, therewith also not directly subjected to international law. The EU has always been happiest straddling this fence: it is neither a classic international organization nor a state. It is not a regular creature of international law, and can thus pick and choose its own preferred elements of international law.
The ERTA decision has proved to be immensely influential, in two ways. One, it is still seen as the basis for well-nigh the entire external relations edifice of the EU: ERTA solved (if that is the word to use) most relevant legal issues simply by proclaiming that when in doubt, powers accrue to the EU. Second, there is what may be referred to as the spirit (not to say ghost) of ERTA: ERTA pioneered the use of the principle of fidelity, and it is this principle that has come to play an influential role also in cases not involving strict delimitations of competences. Thus, in the Open Skies cases, addressing powers in the field of air transport agreements with third states, the Court consistently upheld the position that even if it would be difficult to ascribe powers to the EU, the exercise of powers by member states would be irreconcilable with the principle of fidelity. Likewise, in cases involving investment treaties concluded by member states, even a merely potential, hypothetical disharmony between such treaties and EU law would mean that the member states act in violation of the principle of fidelity.
In the end, the Court skillfully found a middle ground between international law and domestic law by, essentially, ignoring both. The judgment has a high Munchhausen content: the Court creates the edifice of EU law by pulling itself up by its own bootstraps. Put differently, the EU has implied powers in the field of external relations under EU law because otherwise EU law could not be EU law. There is no explicit attempt to connect the implied powers doctrine to its counterpart in international law; nor is there any explicit attempt to justify it, or the concomitant idea of pre-emption, in terms of domestic (federal) thought.11
In later cases and opinions, the Court has time and again fallen back on its ERTA doctrine; it is still considered the basis of the EU’s external implied powers. The EU’s political taskmasters have attempted to codify the doctrine in Lisbon, but have done so in a less than fully systematic manner. Article 3 TFEU and art. 216 TFEU both refer, albeit in slightly different terms, to the exclusive treaty-making competences of the EU. Article 216 specifies that these may be explicitly mentioned in the treaties, something art. 3 omits. Both articles suggests that exclusive treaty-making competences can be derived from internal legislation or the necessity to exercise an internal competence, or when the conclusion of an external agreement by the EU can come to affect EU law (art. 3(2) TFEU). This latter point is unfortunate, in that it departs from the ERTA situation: in ERTA, the prospect of affecting EU law came from treaties concluded by member states, not by the EU itself.
In international law terms, ERTA has been less influential: its peculiar rendition of the implied powers doctrine has not been much followed in other international organizations, and understandably so: the decision is premised on the unique nature of EU law, and its logic can thus not easily be transplanted to different settings/2 This however takes nothing away from its constitutional significance in the development of EU law.