Opinion procedure 2/15

Arguments

General arguments

156.The Commission states that Section A sets out the objective and scope of Chapter Eight of the EUSFTA. Sections B to D of that chapter fall within the European Union’s exclusive competence because their scope corresponds with that of the commitments on modes 1, 2, 3 and 4 supplies of services under the GATS, which is covered by Article 207(1) TFEU. In accordance with Article I:2(a) to (d) of the GATS, those four modes cover the supply of a service: (a) from the territory of one (WTO) Member into the territory of any other (WTO) Member (‘mode 1’ or ‘cross-border supply’); (b) in the territory of one (WTO) Member to the service consumer of any other (WTO) Member (‘mode 2’ or ‘consumption abroad’); (c) by a service supplier of one (WTO) Member, through commercial presence in the territory of any other (WTO) Member (‘mode 3’ or ‘commercial presence’); and (d) by a service supplier of one (WTO) Member, through presence of natural persons of a (WTO) Member in the territory of any other (WTO) Member (‘mode 4’ or ‘presence of natural persons’).

157.For each sub-section of Section E of Chapter Eight (‘Regulatory Framework’), the Commission maintains that there is a sufficiently close connection with international trade.

158.As regards the provisions of general application (Sub-section 1), the Commission relies on a comparison with the provisions in the GATS and a number of non-binding instruments adopted by various WTO bodies. The Commission further argues that Article 8.16 of the EUSFTA on the mutual recognition of qualifications falls within the common commercial policy because it facilitates market access for foreign service suppliers and the Court has confirmed that such obligations in the GATS are part of the common commercial policy. Article 8.17 of the EUSFTA on transparency lays down obligations that are common in international trade agreements and similar to those resulting from Articles III:1 and III:4 of the GATS. Uncertainties regarding applicable measures regulating commercial actions may cause service suppliers to forego access to foreign markets.

159.As regards domestic regulation (Sub-section 2), the Commission argues in essence that that sub-section imposes conditions ensuring that licensing and qualification requirements and procedures do not hamper international trade. Their purpose is similar to that of Article VI:4 of the GATS, which aims to ensure that such standards and procedures, even if not discriminatory, do not constitute unnecessary barriers to trade in services. Furthermore, the obligation in Article 8.19.3 of the EUSFTA to maintain or institute judicial, arbitral or administrative tribunals or procedures which provide for review of decisions is similar to that found in Article VI:2(a) of the GATS.

160.Moreover, the specific provisions on computer services, postal services, telecommunication services and financial services (Sub-sections 3, 4, 5 and 6), some of which reaffirm or build upon commitments under the GATS, are likewise within the European Union’s competence under Article 207(1) TFEU.

161.Section F mostly contains declarations of intent. The sole substantive obligation (in Article 8.58 of the EUSFTA) prohibits the imposition of customs duties, which is a matter clearly falling within the common commercial policy.

162.The Parliament and the Council have not made specific arguments in relation to the provisions of Chapter Eight that do not concern transport.(111)

163.The Member States focus in particular on specific provisions such as those relating to financial services and the mutual recognition of professional qualifications.

164.A number of Member States argue that Sub-section 6 on financial services does not fall fully within the European Union’s common commercial policy. Directive2014/65/EU on markets in financial instruments (‘the MiFiD II Directive’),(112) which is to enter into effect in January 2017, harmonises only certain aspects of the supply of financial and investment services by third country nationals.

165.Rules governing the mutual recognition of professional qualifications also do not fall within the common commercial policy. First, contrary to the Commission’s contention, the mere fact that a matter has an impact on external commercial relations or is governed by international economic law is not sufficient to bring it within the common commercial policy. Second, Directive2005/36/EC on the recognition of professional qualifications(113) is without prejudice to the Member States’ exclusive competence as regards the recognition of professional qualifications obtained outside the territory of the European Union. Likewise, in the area of maritime transport, the common rules adopted, in particular in Council Directive96/50/EC (on the conditions for obtaining national boatmasters’ certificates) and Directive2008/106/EC (on the minimum level of training of seafarers),(114) lay down only minimum rules which cannot be affected by Article 8.16 of the EUSFTA. Third, the Commission fails to take account of the fact that the GATS (in particular Article VII:1) does not require WTO Members to recognise professional qualifications of third countries or to conclude international agreements in that regard.

166.Furthermore, the manner in which liberalisation is to be achieved under the EUSFTA, in particular in the area of establishment, will or might affect health and social services for which Member States remain competent. That is incompatible with Article 207(6) TFEU. The Commission also wrongly argues that the provisions regarding electronic commerce contain only declarations of intent.

167.Finally, the Commission cannot rely on Article 216 TFEU to justify the existence of shared competence in areas falling outside the European Union’s exclusive competence. The Commission has not shown the need to conclude the EUSFTA in order to achieve one of the objectives referred to in the Treaties.

Arguments regarding transport

168.The Commission treats separately the obligations under Chapter Eight that specifically relate to transport (in the European Union’s Schedule of Specific Commitments in Annex 8-A and in Sub-section 7 of Section E concerning international maritime transport services).

169.The Commission argues that, whilst a very significant part of trade between Singapore and the European Union in the five transport sectors covered by the EUSFTA (air, rail, road, inland waterway, maritime) is supplied under mode 3 (establishment), the provisions relating to the establishment of transport service providers do not fall within the exception in Article 207(5) TFEU. That is because establishment with respect to transport services does not fall within the scope of Title VI of Part Three of the TFEU (read together with Article 58(1) TFEU), to which Article 207(5) TFEU refers, and no Treaty provision precludes the provisions on the freedom of establishment from applying to transport. The Commission draws an analogy here with the distinction between, on the one hand, the freedom to provide transport services under secondary law adopted in accordance with Title VI of Part Three of the TFEU, which is limited to modes 1, 2 and 4, and, on the other hand, the freedom of establishment under Article 49 et seq. TFEU.

170.As regards commitments in the EUSFTA falling under the exception in Article 207(5) TFEU, the Commission submits that the European Union’s exclusive competence follows from the third ground under Article 3(2) TFEU. External action by the Member States would risk affecting the common rules adopted in the area of transport services, which is largely covered by common rules. Should the Court disagree and find that it is necessary to consider the commitments for each transport sector individually, at least the EUSFTA commitments with respect to international maritime transport, rail transport and road transport as well as certain auxiliary services fall within the European Union’s exclusive competence.

171.With respect to air transport services, the Commission submits that the European Union’s exclusive competence over aircraft repair and maintenance services during which an aircraft is withdrawn from service, selling and marketing of air transport services, and computer reservation systems (to which Sections B and C apply) is based, in part, on Article 207(1) TFEU and, in part, on the first and third grounds under Article 3(2) TFEU. For aircraft repair and maintenance services, Article 12 of Regulation (EC) No216/2008(115) envisages the conclusion of an agreement by the European Union (first ground under Article 3(2) TFEU). As regards selling and marketing of air transport services, the Commission argues that they do not as such involve the transport of goods or passengers: thus, they fall within the common commercial policy. Computer reservation system services are extensively regulated by common rules, in particular Regulation (EC) No80/2009,(116) and therefore fall within the European Union’s exclusive competence in accordance with the third ground under Article 3(2) TFEU.

172.Due to the geographical situation of the European Union and Singapore, the practical relevance of modes 1, 2 and 4 is limited.

173.Thus, with respect specifically to internal waterway transport, there is, in practice, no exercise of external competence through the EUSFTA.

174.As regards rail transport, the European Union has accepted no modes 1 or 4 commitments and full commitments only with respect to mode 2. These are in any event ancillary to the EUSFTA commitments in the transport area or relating to the common commercial policy. With respect to the supply of rail transport services by a subsidiary of a Singapore company established in a Member State to another Member State (mode 3), Directive2012/34/EU authorises free provision of intra-Union services by operators established in a Member State, without stipulating nationality requirements regarding owners of the subsidiary.(117) Thus, that matter is covered by common rules.

175.As regards road transport, the European Union has accepted limited commitments on passenger and freight transport. No mode 1 commitments are made. By contrast, the European Union makes a full commitment (without reservations) for mode 2 and a commitment, subject to reservations, for mode 4. In the same way as rail transport, the commitments made are of limited practical concern. In any event, the specific mode 2 commitment is ancillary to the other commitments under the EUSFTA. With respect to the supply of such services by a subsidiary of a Singapore company established in a Member State to another Member State (mode 3), Regulations (EC) Nos1072/2009(118) and 1073/2009,(119) read together with Regulation (EC) No1071/2009,(120) establish common rules concerning the conditions of establishment of road transport operators in the European Union. Since those regulations apply irrespective of the nationality of the owners of the subsidiary, the cross-border supply of road transport services by companies established in the European Union is largely covered by common rules. The European Union thus enjoys corresponding exclusive external competence under Article 3(2) TFEU. Finally, the Commission puts forward the same arguments regarding mode 4 in relation to road transport as it does for maritime transport.(121) In practice, a road transport company from Singapore might send key personnel (most likely intra-corporate transferees(122)) to the establishment created in a Member State. In that situation, Directive2014/66/EU applies to the entry and residence of those third country nationals in the framework of an intra-corporate transfer.(123) In any event, those commitments are ancillary to the European Union’s commitment with respect to the provision of road transport through mode 3 (for which the European Union has exclusive competence(124)).

176.As regards maritime transport, the Commission argues that common rules are found in Council Regulation (EEC) No4055/86,(125) which covers at least a significant part of the supply of maritime transport services between the Member States and third States. It also covers the treatment of third country nationals (namely certain shipping companies that are established in third countries). Unlike the regulations relevant to air transport, Regulation No4055/86 applies to certain third country shipping companies.(126) That regulation is also not limited to intra-Union shipping routes. Moreover, it applies to the (cross-border) supply of maritime transport services by subsidiaries of Singapore companies established in a Member State from that Member State to another Member State.

177.As regards mode 4, the Commission submits that, in practice, a maritime transport company from Singapore will send key personnel (most likely intra-corporate transferees) to the establishment created in a Member State. In that situation, Directive2014/66 applies to the conditions of entry and residence of third country nationals in the framework of an intra-corporate transfer. In any event, the mode 4 commitment is a necessary adjunct to the mode 3 commitment for which the European Union enjoys exclusive competence.(127)

178.The Commission adds that port services, which are the subject of Article 8.56.6 of the EUSFTA (part of Sub-section 7), have not been liberalised for foreign suppliers of those services. That is so because the European Union has not accepted commitments in its Schedule. Article 8.56.6 of the EUSFTA is merely a further elaboration of the national treatment obligation with respect to international maritime transport, as far as it is liberalised.

179.As regards services auxiliary to maritime transport, internal waterway transport, rail transport and road transport, the Commission argues that some of those services are not transport services. They thus fall within the European Union’s common commercial policy. That is specifically the case for customs clearance services. With respect to the maintenance and repair of equipment for maritime transport, inland waterway transport, rail transport and road transport, the Commission argues that those services are covered by the European Union’s commitments on business services. They therefore fall within the common commercial policy.

180.Should the Court find that certain provisions of the EUSFTA relating to transport services do not fall within the European Union’s exclusive competences, the Commission submits that those provisions fall within the European Union’s shared competences because, in accordance with the second ground under Article 216(1) TFEU, those international commitments are necessary to achieve an objective of the Treaties. The Commission refers in particular to the objective of establishing common rules for transport services between the European Union and third States under Article 91(1) TFEU.

181.The Parliament argues that certain services (such as storage and warehousing, freight forwarding, pushing and towing) are auxiliary to maritime transport services and therefore have to be treated in the same way as those services. The Parliament further submits that commitments in mode 4 (temporary presence of natural persons) are necessary to ensure an effective right of establishment. The legal regime of the supply of services in mode 4 must therefore follow that of mode 3 and must accordingly also fall outside the exception set out in Article 207(5) TFEU. Should services in mode 4 nevertheless be considered autonomously, the corresponding commitments still fall within Article 207(1) TFEU because the temporary presence of natural persons is governed by the Treaty provisions on the entry and stay of third country nationals in the territory of the Member States, rather than by the provisions on transport policy in Title VI of Part Three of the TFEU. As regards maritime transport, the Parliament adds that, as a result of Regulation No4055/86, the European Union enjoys exclusive competence over cargo-sharing arrangements.

182.The Council and many Member States argue that there is no basis for excluding establishment in the area of transport from the scope of Article 207(5) TFEU. Neither the provisions of Title VI on Transport nor the case-law suggest that establishment in the area of transport is entirely outside the scope of application of those provisions. Article 58(1) TFEU does not support the Commission’s reading of Article 207(5) TFEU. Whilst it is true that there is no similar provision on the right of establishment, nor is there for the freedom of movement for workers and the free movement of capital. The Commission’s reading would limit the title on transport to matters relating to the freedom to provide services. In any event, Article 58(1) TFEU is not in the title on transport. It would be inconsistent with the structure of the Treaties if a provision that significantly reduces the scope of the title on transport were not to be found in that title itself. The Council and many Member States mention examples of legislative acts of the European Union based on Article 91(1) or Article 100(2) TFEU and which concern freedom of establishment or free movement of workers in the area of transport.(128)

183.The Council submits that the scope of the matters relating to transport covered by the EUSFTA is far broader than the Commission suggests. The Council and many Member States add that the practical relevance of a provision of the EUSFTA (in particular as regards inland waterways, rail and road) does not affect the allocation of external competence. Likewise, the scope of a matter does not become more limited as a result of reservations undertaken by the European Union to the benefit of individual Member States(129) (for example as regards rental and leasing services without operators relating to ships, aircraft and other transport equipment in the European Union’s Schedule of Specific Commitments, or maintenance and repair of vessels, of rail transport equipment, of motor vehicles, motorcycles, snowmobiles and road transport equipment and of aircraft and parts thereof in that schedule).

184.The Council takes the view that the Commission has not shown that the conditions in Article 3(2) TFEU are met as regards all of the provisions relating to transport in Chapter Eight. Areas not falling within the European Union’s exclusive competence thus include: (i) services auxiliary to road, rail and inland waterway transport and many of the services auxiliary to maritime transport services; (ii) maritime transport services as far as vessels flying the flag of a third State are concerned, maritime transport services supplied through mode 3 and maritime transport services supplied through mode 4 with regard to business service sellers and business visitors for establishment purposes; (iii) inland waterway transport services; (iv) rail transport services supplied through mode 2 and maintenance and repair of urban and suburban rail transport equipment; (v) road transport services supplied through mode 2 and those supplied through mode 4 with regard to business service sellers and business visitors for establishment purposes; and (vi) the mutual recognition of professional qualifications. Even if the Court were to agree with the Commission’s narrow reading of Article 207(5) TFEU, parts of Chapter Eight would not in any event fall within the European Union’s exclusive competence.

185.The Council and many Member States also contend that the Commission cannot group together all matters related to transport in the EUSFTA as a single relevant ‘area’ for the purpose of applying the third ground under Article 3(2) TFEU. The Council argues that some auxiliary services are so distinct that they form an area of their own. For the purposes of the third ground under Article 3(2) TFEU, the relevant ‘areas’ are to be defined by reference to the different modes of transport and are not largely covered by common rules.

186.Thus, as regards maritime transport, the relevant provisions in the EUSFTA contain obligations which do not fall within the scope of Regulation No4055/86. That regulation accordingly has a narrower scope of application. In addition, unlike the EUSFTA, Regulation No4055/86 does not apply to all modes of services. It does not concern (auxiliary) port services or other auxiliary maritime transport services but only the carriage of persons and goods.

187.Where the regulation does apply, a distinction is to be made between cargo-sharing arrangements, which are largely covered by Article 3 of Regulation No4055/86, and all other restrictions of the freedom of movement of services in the maritime transport sector, which are largely not covered by that regulation.

188.As regards inland waterway transport, the Commission has not identified any common rules that might be affected by the EUSFTA’s provisions. Exclusive competence pursuant to the third ground under Article 3(2) TFEU cannot be established in that area on the basis of Council Regulations (EEC) No3921/91(130) or (EC) No1356/96.(131)

189.As regards rail transport, the mode 3 commitments under the EUSFTA might affect Directive2012/34 establishing a single European railway area. However, that directive contains no rules concerning mode2.

190.As regards road transport, the Commission has failed to show any common rules that relate to mode 2. Furthermore, as regards mode 4, Directive 2014/66 does not apply to a Singapore undertaking that does not yet have an establishment in a Member State. Common rules exist only as regards mode 3. Those are found, in particular, in Regulations Nos1071/2009, 1072/2009 and 1073/2009, which do not impose a nationality condition for supplying road transport services.

191.As regards air transport, the European Union enjoys, in accordance with Article 3(2) TFEU, exclusive external competence over computer reservation system services as a result of Regulation No80/2009. However, the Commission is wrong as regards aircraft repair and maintenance services (concerning the alleged basis for the conclusion of an international agreement in Article 12 of Regulation No216/2008) and the selling and marketing of air transport services (which, in the Commission’s view, are not covered by the exception in Article 207(5) TFEU). Such services are indissociably linked to transport and even essential to the supply of transport.

192.As regards modes of supply of transport services (rather than modes of transport), there are no common rules regarding the supply of transport services in mode 3 (establishment). Nor is the adoption of such rules planned in the foreseeable future. Mode 4 is not fully covered by common rules, in particular Directive2014/66. That directive applies in particular to intra-corporate transfers of third country nationals such as managers, specialists or trainee employees, but not to other key personnel. Moreover, its provisions on the conditions of entry and residence of third-country nationals apply without prejudice to more favourable provisions of (a) EU law, including bilateral and multilateral agreements; and (b) bilateral or multilateral agreements concluded between one or more Member States and one or more third countries.(132) Such favourable provisions are found in the EUSFTA, in particular Article 8.14 read together with Article 8.13. Whilst the European Union has implied exclusive external competence over short-term residence (as a result of the adoption of Regulation (EC) No810/2009 establishing a Community Code on Visas(133)), the Member States remain competent as regards long-term visas except for specific cases that are governed by common rules (such as in the case of an intra-group transfer).

193.Furthermore, unlike the Commission, the Member States argue that mode 4 is a distinct mode of supply of services. Mode 4 cannot be regarded as a necessary adjunct to establishment (mode 3), which often involves hiring local staff.

194.Finally, recognising the European Union’s exclusive external competence as regards the provisions in Chapter Eight concerning the temporary presence of natural persons would result in harmonisation and thus disregard both the allocation of competences between the European Union and the Members States resulting from Protocol21 and Article 207(6) TFEU.

Analysis

Introduction

195.In Opinion1/94, the Court held that, as regards trade in services— other than transport— regulated by the GATS, only cross-border supplies not involving any movement of persons (‘mode 1’) could be assimilated to trade in goods and therefore fell within the common commercial policy.(134) By contrast, modes 2 to 4 (that is to say, respectively, consumption abroad, commercial presence, and presence of natural persons) involved movements of persons and concerned the treatment of nationals of non-member countries on crossing external frontiers of Member States. Those modes therefore remained outside the common commercial policy.(135)

196.The Treaty of Nice then widened the scope of the common commercial policy so as to cover, in particular, the negotiation and conclusion of agreements on trade in services, in so far as those agreements were not yet covered by the common commercial policy.(136) No distinction was made depending on the mode of supply. However, that competence was subject to a complex set of rules in Article 133(5) and (6) EC. An exception provided that agreements relating to trade in services in certain sectors (cultural, audio-visual, educational services, social and human health sectors) remained within the shared competence of the (then) European Community and the Member States.(137) Subject to those exceptions, the Court held in Opinion 1/08 that the Community had acquired exclusive competence to conclude, in particular, international agreements relating to trade in services supplied in modes 2 to 4.(138) It did so without examining in detail the type of obligation assumed as regards each of those modes of supply.

197.Following the entry into force of the Treaty of Lisbon, Article 207(1) TFEU now covers trade in services under the four modes governed by Article I:2(a) to (d) of the GATS, as the distinction between trade in goods and services has now been removed. Article 207 TFEU no longer contains any (sectoral) derogation to the European Union’s exclusive competence in that area, though the general exception as regards transport continues to apply.(139) Thus, the common commercial policy now covers the whole of the GATS in so far as that agreement applies to services other than transport.

198.What is the position with regard to Chapter Eight of the EUSFTA?

199.In order to establish the European Union’s competence over Chapter Eight and the nature of that competence, it is necessary to distinguish between those parts of that chapter that fall under the common commercial policy (Article 207 TFEU) and those that may come within the European Union’s competence on another basis. That is so because Article 207(5) TFEU expressly excludes transport services from the scope of the common commercial policy.

200.I shall therefore begin by examining whether Chapter Eight, in so far as it does not apply to transport services, falls within the European Union’s exclusive competence for the common commercial policy. I shall then consider separately the European Union’s competence with respect to the provisions of Chapter Eight that apply to transport services. In that context, it is necessary to take account of the provisions that expressly address whether or not that chapter applies to such services, the generally applicable provisions, the specific provisions governing international maritime services and the commitments in the Schedule of Specific Commitments for the European Union. That schedule comprises separate schedules for the cross-border supply of services, establishment and key personnel and graduate trainees and business services sellers. Those separate schedules contain (sub) sector-specific commitments for transport (in particular maritime transport, internal waterway transport, rail transport; road transport; pipeline transport of goods other than fuel) and services auxiliary to those different modes of transport.

Exclusive competence on the basis of Article 207(1) TFEU, read together with Article 3(1) TFEU

201.Sections B to D of Chapter Eight (cross-border supply, consumption abroad,(140) establishment and temporary presence of national persons for business purposes) apply to the supply of services corresponding to modes 1 to 4 under the GATS. Rules relating to those modes of supply therefore fall in principle within the scope of Article 207(1) TFEU. The same applies to the horizontal obligations in Section E (‘Regulatory Framework’), Sub-sections 1 (‘Provisions of general application’) and 2 (‘Domestic Regulation’), and to the sector-specific obligations in Sub-sections 3 (‘Computer Services’), 4 (‘Postal Services’), 5 (‘Telecommunications Services’), and 6 (‘Financial Services’). Likewise, Section F on ‘Electronic Commerce’ essentially aims to increase trade opportunities which may result from the use and development of electronic commerce. Section G sets out the conditions under which the Parties may adopt measures that otherwise might be inconsistent with Chapter Eight and provides for review of that chapter. Those sections therefore have direct and immediate effects on trade and accordingly fall within the European Union’s common commercial policy.

202.A separate question is whether Section C (‘Establishment’, that is to say, the supply of services under mode 3), also concerns foreign direct investment. The Commission accepts that Section C of Chapter Eight may apply, in accordance with Article 8.8(d) of the EUSFTA, to forms of establishment created for performing an economic activity that does not (exclusively) involve the supply of services. Those forms of establishment may therefore not be covered by ‘trade in services’ under Article 207(1) TFEU. However, the Commission argues that, where establishment satisfies the conditions for qualifying as ‘foreign direct investment’, it nonetheless comes within the European Union’s common commercial policy. I shall deal with that argument at point 326 below.

203.Next, as I have explained,(141) trade in services supplied under mode 4 (temporary presence of natural persons) falls within the scope of the common commercial policy, subject only to the exception in Article 207(5) TFEU. On that basis, I reject the arguments made by some Member States in relation to Protocols21 and 22. Those protocols are not capable of having any effect on the question of the correct legal basis for adopting a decision of the Council concluding an international agreement. It is the legal basis for a measure that determines the protocols to be applied, not the other way round.(142) Both protocols cover Title V of Part Three of the TFEU (‘Area of Freedom, Security and Justice’). There is nothing to suggest that that title might be part of the legal basis of the decision concluding the EUSFTA. That is especially so because of Article 8.1.4 of the EUSFTA and the fact that mode 4 (as covered by the EUSFTA) is concerned with the temporary presence of natural persons for business purposes.

204.Similarly, I cannot subscribe to the argument put forward by some Member States as regards financial services. That argument requires the European Union to have adopted secondary legislation in order for an area to fall within the European Union’s exclusive competence over the common commercial policy. I have already explained that neither Article 3(1)(e) TFEU nor Article 207(1) TFEU make the European Union’s competence dependent on the prior adoption of harmonised rules or other rules governing commercial relations between the European Union and third States.(143) In this context, it is unnecessary to explore the scope of the MiFiD II Directive, to which reference was made at the hearing.

205.I am also not convinced that the common commercial policy does not cover Article 8.16 of the EUSFTA on the mutual recognition of professional qualifications. Such mutual recognition is liable to have a direct impact on the liberalisation of trade in services, in particular as regards modes 3 and 4, because it facilitates the movement of persons for the purpose of supplying services. Furthermore, Article 8.16 of the EUSFTA does not harmonise qualification or professional experience requirements nor does it require or preclude the Parties from imposing such requirements. Rather, it seeks to encourage the Parties to adopt a recommendation (and possibly to negotiate an agreement) on the mutual recognition of qualification or professional experience requirements. Its function is therefore similar to that of Article VII of the GATS.

206.Lastly, as I have already explained,(144) the scope of the common commercial policy, which is an autonomous policy, cannot be made dependent on the prior adoption of EU secondary legislation regulating the internal market or a fortiori on the scope and content of that legislation. For that reason, Directive 2005/36 cannot alter the allocation of competences that results from Articles 3(1)(e) and 207(1) TFEU.

207.My conclusion is therefore that, subject to the transport exception in Article 207(5) TFEU, Sections B to G of Chapter Eight fall within the scope of Article 207(1) TFEU. It follows that Section A, setting out the objectives and scope of that chapter, also comes within the common commercial policy (subject to the same exception).

Matters excluded from the scope of the common commercial policy as a result of Article 207(5) TFEU

208.Rules on transport fall outside the exclusive competence of the European Union as a result of Article 207(5) TFEU. In so far as Chapter Eight applies to transport services, it is therefore necessary to examine whether the European Union nevertheless enjoys exclusive competence on the basis of Article 3(2) TFEU.(145)

209.The observations lodged in the present proceedings show that the precise scope of the exclusion in Article 207(5) TFEU remains uncertain. Does Article 207(5) TFEU cover establishment in the transport sector? And are services that can be supplied in relation to the transport sector only also caught by that exception? I shall address each question in turn.

210.As regards the first question, I do not read Article 207(5) TFEU in the same manner as the Commission.

211.Article 207(5) TFEU places ‘international agreements in the field of transport’ outside the common commercial policy. Although that provision states that such agreements are subject to, inter alia, Title VI of Part Three of the TFEU, that reference concerns the effects of the exception rather than the latter’s scope. The arguments of the Council and the Member States in the context of transport have essentially focused on issues relating to establishment (mode 3).

212.Since Article 207(5) TFEU does not distinguish between modes of services, I see no basis for considering that the exception it contains does not apply to services supplied under mode 3. That is confirmed (at least by implication) by Opinion1/08, where the Court found that the transport aspect of the agreements at issue, which also covered mode 3, fell within the sphere of transport policy. The Court thus made no distinction between the different modes of supply in applying (what is now) Article 207(5) TFEU.(146)

213.In any event, establishment is not excluded from the scope of Title VI of Part Three of the TFEU on ‘Transport’. That title applies to all modes of supply in so far as transport services are concerned. Thus, for example, establishment might be covered by legislation adopted pursuant to Article 91(1)(b) TFEU and laying down conditions under which non-resident carriers may operate transport services within a Member State.

214.It is true that Article 58(1) TFEU (part of Chapter Three of Title IV on services) states that the freedom to provide services in the field of transport is governed by Title VI of Part Three of the TFEU and that there is no similar provision in Chapter Two of Title IV on the right of establishment. The Court has held that Article 58(1) TFEU is included in Chapter Three (‘Services’) of Title IV of the Treaty on the Functioning of the European Union because transport is in essence a service. Since it was necessary to have a special system for transport, taking into account the specific aspects of this branch of economic activity,(147) transport services are singled out and expressly stated to be governed by Title VI of Part Three of the TFEU, rather than by the provisions of that treaty relating to the free movement of services.(148)

215.However, the absence of a provision similar to Article 58(1) TFEU in Chapter Two of Title IV on the right of establishment does not mean that establishment is excluded as such from Title VI of Part Three of the TFEU. It simply means that establishment in the transport sector is not excluded from the scope of Chapter Two of Title IV. The Court has held in essence that that chapter directly applies to transport, at least in so far as more specific rules enacted on the basis of Title VI of Part Three do not apply.(149)

216.I now turn to the question whether services supplied in relation to the transport sector are caught by the exception in Article 207(5) TFEU. Answering that question involves taking a view as to whether the degree of connection between the service and transport must reach a certain threshold level in order to trigger the exception in Article 207(5) TFEU. In particular, the question arises as to whether services such as cargo handling, customs clearance, maritime agency, rental of vessels with crew, and selling and marketing of air transport services fall within the common commercial policy or the common transport policy.

217.In my opinion, the expression ‘international agreements in the field of transport’ covers agreements (or parts thereof) that apply not only to transport services as such (namely the service of carrying goods or persons by air, road, rail, sea or inland waterway) but also to services that are inherently and indissolubly linked to such services, that is to say, services both specifically connected to, and conditional upon, the transport service.(150)

218.The coherence of external action in transport requires the transport service itself and the service auxiliary to it to form part of the same common policy. The coherence of the European Union’s policy as regards transport services as such and the appropriate liberalisation of those services might be undermined in the absence of a corresponding policy regarding services that are inherently linked to transport and in practice make it possible to deliver a transport service. Thus, for example, transporting cargo in containers by ship serves no purpose if there are no services available to offload the containers from the ship so that their contents can be further transported and eventually delivered to the recipients. Measures liberalising access to ports for cargo ships might therefore be jeopardised if, for example, cargo handling services remained subject to protectionist measures. The same is true of, for instance, the maintenance and repair of transport equipment, which can be assumed to require know-how and technical gear specific to the transport mode concerned and to be necessary to ensure that that transport is effective. Similarly, computer reservation systems are computerised systems in which data are collected and made available to the public in order to reserve and eventually to buy (in particular) transport services. The fact that such systems may also be used to reserve and buy accommodation for travellers does not alter the fact that the primary reason why such systems exist is to sell transport services. I find support for that interpretation in Opinion1/08, where the Court described ‘certain air transport services’ covered by the schedule at issue in that procedure as including ‘services for the repair and maintenance of aircraft, sales and marketing of transport services or computer reservations systems’.(151)

219.On the other hand, services that are not inherently and indissolubly linked to transport services, such as customs clearance services, fall outside the exception in Article 207(5) TFEU. Such services are supplied because goods are imported and exported. That would of course involve movement of goods across borders, using different forms of transportation. However, the need for such services arises independently from the modes of transport used.

Exclusive competence on the basis of Article 3(2) TFEU

220.For matters within the scope of the exclusion in Article 207(5) TFEU and therefore in the area of transport, competences are in principle shared between the European Union and the Member States.(152) The Commission claims, however, that the European Union enjoys exclusive external competence on the basis of either the first or the third ground under Article 3(2) TFEU, depending on the transport service concerned.

–The first ground under Article 3(2) TFEU

221.The Commission argues that Article 12 of Regulation No216/2008 envisages the conclusion of an agreement by the European Union. Therefore, the European Union enjoys exclusive competence to conclude an agreement in so far as it concerns the service of maintenance and repair of aircraft.

222.I disagree.

223.Regulation No216/2008 creates a European Aviation Safety Agency and establishes an appropriate and comprehensive framework for defining and implementing common technical requirements and administrative procedures in the area of civil aviation and for the safety of third country aircraft using EU airports.(153) It applies, inter alia, to the maintenance and operation of aeronautical products (thus including aircraft(154)), parts and appliances.(155)

224.Pursuant to Article 12, the European Union is to conclude recognition agreements with third countries regarding the use of certificates issued by aeronautical authorities of those countries which certify compliance with civil aviation safety requirements. That provision, combined with the third ground under Article 3(2) TFEU, offers a basis for the European Union to conclude, without its Member States, international agreements with third countries concerning the recognition of such certificates. However, it does not create an EU exclusive external competence to conclude international agreements intended to liberalise trade in services of maintenance and repair of aircraft. In other words, the fact that the legislature has decided that Member States may not conclude their own international agreements as regards a particular aspect of a policy does not mean that the first ground under Article 3(2) TFEU can then be used to claim exclusive external competence over the entire policy or over other aspects of that policy.

–The third ground under Article 3(2) TFEU

225.The first step in applying Article 3(2) TFEU involves defining the area concerned.(156) There is disagreement among the Parties as to what constitutes the relevant area for examining whether the European Union has exclusive competence as regards the EUSFTA in so far as it applies to transport services.

226.In making no or only very limited commitments as regards certain modes of supply for certain modes of transport in Chapter Eight, the European Union has chosen to exercise its competence in a particular manner. In such circumstances, a legal basis for exercising that external competence must be found in the Treaties. For example, it appears from the Schedule of Specific Commitments annexed to Chapter Eight that the European Union makes no commitments as regards mode 1 for rail transport services.(157) It has thus chosen not to accept obligations. That presupposes that the European Union has the competence to make such a choice. That competence requires a legal basis in the Treaties. The same reasoning applies to commitments that might be of limited practical relevance (for example, due to the geographical distance between the European Union and Singapore). Where competence is exercised, the relevant Treaty rules on the allocation of external competences between the European Union and the Member States apply. I therefore agree with the Council that that allocation cannot differ depending on the geographical situation of the third parties with which the European Union concludes a particular international agreement.

227.Conversely, the choices made in exercising competences as well as the practical effects of those choices may have an impact on whether the international agreement affects common rules or alters their scope. The last step in the ERTA analysis requires, as I have explained, specifically examining the consequences of international commitments on EU secondary law in the corresponding area.(158)

228.The horizontal commitments in Chapter Eight and both the horizontal and sector-specific commitments in the Schedule of Specific Commitments, annexed to that chapter, show that the EUSFTA liberalises trade in transport services between the European Union and Singapore on the basis of the relevant mode of transport. Thus, whilst the horizontal commitments apply in principle to all transport services (except for a large part of air transport services), specific principles apply to the liberalisation of international maritime transport. Furthermore, the Schedule of Specific Commitments (Appendix 8-A-1) for mode 1 (cross-border supply) distinguishes under heading 11 (‘Transport services’) between commitments for maritime transport (Section 11.A); internal waterway transport (Section 11.B); rail transport (Section 11.C); road transport (Section 11.D); and pipeline transport of goods other than fuel (Section 11.E). Specific commitments are listed under heading 12 (‘Services auxiliary to transport’) for auxiliary services corresponding to each of those types of transport. The same distinctions appear in Appendix 8-A-2 on mode 3 (establishment) and in Appendix 8-A-3 on mode 4 (key personnel and graduate trainees, and business services sellers).(159) The degree of commitment depends on whether the Schedule uses the expression ‘unbound’ (meaning no commitments have been made, for all or some of the services concerned) or ‘none’ (meaning full commitments have been made) or specifies the terms of a particular commitment (for example, a nationality condition may still be applied).

229.That is consistent with the fact that, as EU secondary legislation implementing the EU common transport policy illustrates,(160) each mode of transport (air, road, rail, sea and inland waterway)(161) has characteristics which are to a large extent specific to it and which therefore call for the adoption of specific rules, including with a view to their liberalisation.

230.It follows that the relevant areas for the purposes of the third ground under Article 3(2) TFEU in the present case correspond with the supply of transport services by each mode of transport, that is to say, air transport, road transport, rail transport, maritime transport and inland waterway transport.(162) Each area includes services that are inherently linked to the transport services concerned. Those services cannot simultaneously be inherently linked to a mode of transport and constitute a separate area for the purposes of Article 3(2) TFEU (because they are distinct from other services).

231.I shall now examine whether those areas are ‘largely covered’ by common rules before examining what impact the conclusion of the EUSFTA would have on those rules.

232.As regards maritime transport, I reject the argument that the fact that Regulation No4055/86 is not (primarily) concerned with the supply of international maritime transport services from third countries to the European Union is sufficient to rule out exclusive external competence on the basis of the third ground under Article 3(2) TFEU.

233.It is true that Regulation No4055/86 applies to ‘intra-Community shipping services’ (defined as ‘the carriage of passengers or goods by sea between any port of a Member State and any port or off-shore installation of another Member State’) and ‘third-country traffic’ (defined as ‘the carriage of passengers or goods by sea between the ports of a Member State and ports or off-shore installations of a third country’).(163) Since it seeks in essence to implement the Treaty rules on the freedom to provide services and the case-law relating thereto,(164) that regulation applies only to either (i) EU nationals who are established in a Member State other than that of the person for whom the services are intended (Article 1(1)) or (ii) nationals of a Member State established outside the European Union and shipping companies established outside the European Union but controlled by EU nationals, provided their vessels are registered in that Member State in accordance with its legislation (Article 1(2)).(165) Unlike the EUSFTA, Regulation No4055/86 is thus not concerned with the elimination of restrictions on the supply of international maritime transport services where those services are supplied by nationals of third countries or shipping companies established outside the European Union and controlled by third country nationals, or where the vessels are registered in a third State, except if the services are supplied by EU nationals who are established in a Member State other than that of the person for whom the services are intended.(166)

234.However, whether or not Regulation No4055/86 applies to situations having a non-EU element (and thus an external dimension) is not relevant when conducting an ERTA analysis. An international commitment is perfectly capable of affecting or altering the scope of common rules governing ‘intra-EU’ situations only. Opinion1/03 offers an illustration.(167) The new Lugano Convention which formed the subject matter of the request for an Opinion there aimed to extend to non-Member States the common rules on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters resulting from Council Regulation (EC) No44/2001.(168) Whilst those common rules were not designed to govern jurisdiction of courts in non-Member States and recognition and enforcement of judgments delivered by these courts, the Court concluded that the new Lugano Convention would affect the uniform and consistent application of the system put in place by Regulation No44/2001.(169)

235.Does Regulation No4055/86 largely cover the area of maritime transport services?

236.For maritime transport, the European Union accepts under Chapter Eight, in addition to the horizontal obligations laid down in that chapter, full commitments in modes 1 and 2, certain commitments in mode 3 and limited commitments in mode 4.(170) As regards auxiliary maritime transport services, modes 1 and 3 commitments depend on the Member State at issue and the type of auxiliary services, and full mode 2 commitments have been accepted. A few Member States have accepted limited commitments in mode 4.

237.There is certainly an overlap between Regulation No4055/86 and Chapter Eight of the EUSFTA. The purpose of that regulation is, in accordance with Article 58(1) TFEU, to apply the Treaty rules governing the freedom to provide services to the sphere of maritime transport between Member States.(171) Accordingly, it precludes the application of any national legislation whose effect is to make the provision of services between Member States more difficult than the provision of purely domestic services within a Member State, unless that legislation is justified by compelling reasons of public interest and the measures enacted thereby are necessary and proportionate.(172) Like the EUSFTA, Regulation No4055/86 thus aims to liberalise the cross-border supply of maritime transport services (that is to say, the supply of those services under modes 1 and 2). Moreover, both the EUSFTA and that regulation contain specific rules concerning cargo-sharing arrangements in bilateral agreements concluded with third countries.(173)

238.However, the presence of those rules in Regulation No4055/86 is insufficient to lead to the conclusion that the liberalisation of maritime transport services is largely covered by common rules.

239.First, Regulation No4055/86 is concerned only with cross‑border trade in maritime services (modes 1 and 2). It does not liberalise the supply of services under mode 3, that is to say, establishment. That may be because maritime transport (like other modes of transport) is already governed, within the European Union, by the Treaty rules on the freedom of establishment in Articles 49 to 55 TFEU. Those provisions contain no exclusion comparable to that which Article 58 TFEU lays down in respect of services.(174) Thus mode 3 in maritime transport is subject to the Treaty provisions on freedom of establishment. However, as I shall explain in the context of portfolio investment, Treaty provisions cannot, in my view, be regarded as ‘common rules’ for the purposes of the third ground under Article 3(2) TFEU.(175) Moreover, whilst Article 50(1) TFEU offers a legal basis for adopting common rules aimed at ‘attain?ing? freedom of establishment as regards a particular activity’, none of the parties to the present proceedings has suggested that that provision has been used in the sector of maritime transport.(176)

240.Second, as regards mode 4, the Commission rightly submits that common rules are laid down in Directive2014/66. However, that directive applies specifically in the context of an intra-corporate transfer of managers, specialists or trainee employees.(177) As Article 8.13.2 of the EUSFTA shows, Section D of Chapter Eight has a significantly broader scope of application, covering as it does not only intra-corporate transfers of personnel but also other forms of ‘temporary presence of natural persons for business purposes’. Thus, Article 8.13(2)(a), second subparagraph, of the EUSFTA indicates that key personnel comprise, besides ‘intra-corporate transferees’, ‘business visitors for establishment purposes’. Likewise, that section applies to ‘business service sellers’, defined as ‘natural persons who are representatives of a service supplier of a Party seeking temporary entry into the territory of the other Party for the purpose of negotiating the sale of services or entering into agreements to sell services for that service supplier’. Again, that supply of services does not involve any ‘intra-corporate transfer’ of a workforce.

241.I therefore conclude that the area of liberalisation of maritime transport services is not already largely covered by common rules and that, as a consequence, no exclusive external competence over that area can be established within the meaning of the third ground under Article 3(2) TFEU.

242.However, I accept that the European Union enjoys shared competence to conclude an international agreement aimed at liberalising maritime transport services.

243.In my opinion, the provisions of the EUSFTA on maritime transport services can be regarded as necessary to achieve the objectives of Title VI of Part Three of the TFEU, concerning the European Union’s transport policy (the second ground under Article 216(1) TFEU). A common transport policy requires, inter alia, adopting common rules applicable to international transport to or from the territory of a Member State or passing across the territory of one or more Member States (Article 91(1)(a) TFEU). That includes transport by rail, road, internal waterway, sea and air (Article 100 TFEU). A necessary corollary is the competence to conclude international agreements so as to obtain reciprocal commitments from the third countries from which the transport originates or which are its destination. I therefore consider that the European Union and the Member States share competence over those provisions, pursuant to Article 4(2)(g) TFEU (‘transport’) and the second ground under Article 216(1) TFEU, in conjunction with Articles 91 and 100(2) TFEU.

244.I now turn to inland waterway transport. In addition to the horizontal obligations laid down in Chapter Eight, the European Union accepts limited commitments under that chapter in modes 1 and 2, together with mode 3 (depending on the Member State concerned). No mode 4 commitments are made. As regards auxiliary inland waterway services (such as cargo-handling services or storage and warehouse services), the modes 1, 2 and 3 commitments accepted depend on the Member State at issue and the type of auxiliary services.

245.I have already explained why I disagree with the Commission’s argument that, due to the limited practical relevance of certain services, the European Union essentially makes no commitments and in practice does not exercise competences through the EUSFTA.(178) Furthermore, the Commission has not put forward anything to demonstrate that the conditions of the third ground under Article 3(2) TFEU are satisfied. In those circumstances, it is unnecessary to explore further the possible application of Article 3(2) TFEU to the provisions of Chapter Eight in so far as they apply to transport by inland waterway. The European Union does not enjoy exclusive external competence in respect of such transport under Article 3(2) TFEU.

246.However, as in the case of maritime transport,(179) the provisions of the EUSFTA on inland waterway transport can be regarded as necessary to achieve the objectives of Title VI of Part Three of the TFEU (the second ground under Article 216(1) TFEU), and therefore fall, for the same reasons, within the shared competence of the European Union and the Member States on the basis of Article 4(2)(g) and the second ground under Article 216(1) TFEU, in conjunction with Articles 91 and 100(1) TFEU.

247.As regards air transport, apart from the horizontal obligations laid down in Chapter Eight, the European Union accepts full commitments in modes 1 and 2, although those commitments are limited to (i) aircraft repair and maintenance services during which an aircraft is withdrawn from services; (ii) the selling and marketing of air transport services; and (iii) computer reservation system services. The European Union moreover accepts some commitments in mode 3 and limited commitments in mode 4 (a nationality condition may be applied) for international air transport services.

248.I have already rejected the Commission’s claim of exclusive EU competence over aircraft repair and maintenance services on the basis of the first ground under Article 3(2) TFEU.(180)

249.It follows that whether the European Union enjoys exclusive competence over air transport depends on whether the conditions of the third ground under Article 3(2) TFEU are satisfied.

250.In my opinion, the Commission has not shown that they are. Its arguments regarding aircraft repair and maintenance services are limited to the first ground under Article 3(2) TFEU. Its position on the selling and marketing of air transport services is that they fall within the common commercial policy. The only type of airport transport service with respect to which the Commission puts forward an ERTA analysis is computer reservation system services. It is common ground that Regulation No80/2009 lays down common rules applicable to any computerised reservation system in so far as it contains air transport products offered for use or used in the EU. Furthermore, the Court has confirmed that, as a result of that regulation’s predecessor (Council Regulation (EEC) No2299/89(181)), the European Union has acquired exclusive competence to enter into international agreements relating to computerised reservation systems offered for use or used in its territory.(182) However, that alone is not sufficient to conclude that the supply of air transport services is an area largely covered by common rules. The European Union therefore does not enjoy exclusive external competence over that area.

251.The provisions of the EUSFTA concerning air transport services can nevertheless be regarded as necessary to achieve the objectives of Title VI of Part Three of the TFEU (the second ground under Article 216(1) TFEU) for reasons that are similar to those that apply to maritime transport and inland waterway transport.(183) Therefore, the European Union and the Member States share competence over those provisions pursuant to Article 4(2)(g) and the second ground under Article 216(1) TFEU, in conjunction with Articles 91 and 100(2) TFEU.

252.Turning now to rail transport, apart from the horizontal obligations laid down in Chapter Eight, the European Union has accepted no mode 1 commitments and full mode 2 commitments. Full commitments have been made for most Member States in relation to mode 3, although the Member States may subject the use of the public domain to public monopolies or to exclusive rights granted to private operators. No reservations apply as regards mode 4.(184) For auxiliary rail transport services, modes 1 and 3 commitments depend on the Member State concerned and the type of auxiliary service. Full mode 2 commitments have been accepted.

253.I reject the Commission’s argument that Opinion1/94 and Case C‑268/94 Portugal v Council(185) offer support for concluding that the commitments in the EUSFTA as regards the supply of railway transport services under mode 2 are ‘extremely limited in scope’ and therefore ancillary to the commitments in the area of the common commercial policy (for which the European Union enjoys exclusive competence). In the relevant part of Opinion1/94, the Court distinguished an international agreement ‘of the type and scope of TRIPS’, which could not be regarded as falling within the scope of the common commercial policy, from trade agreements dealing with intellectual property rights in a purely incidental way.(186) That part of Opinion1/94 therefore concerned the scope of agreements that have (what is now) Article 207(1) TFEU as their legal basis. It has no relevance when, as in the present procedure, the Court is required to ascertain whether the European Union enjoys exclusive external competence on the basis of Article 3(2) TFEU as regards an area (here, rail transport) falling outside the common commercial policy. The same reasoning applies to the judgment in Portugal v Council.(187)

254.I now turn to whether Directive2012/34 largely covers the area of rail transport services in the European Union.

255.Directive2012/34, which applies to the use of railway infrastructure for domestic and international rail services,(188) aims to subject the railway sector to the principle of freedom to provide services, taking into account that sector’s specific characteristics.(189) Accordingly, Directive2012/34 regulates access by a railway undertaking to the railway infrastructure in all Member States (including a Member State other than that in which that undertaking is established), for the purpose of operating either rail freight services or an international passenger service.(190) It therefore covers the supply of cross-border rail transport services (modes 1 and 2) in the European Union. Furthermore, the directive lays down substantive and procedural rules concerning the conditions under which a railway undertaking may obtain a licence enabling it to provide rail transport services in the European Union, including from the territory of one Member State to the territory of another Member State. Those conditions relate, in particular, to the undertaking’s good repute, financial fitness and professional competence.(191) Directive2012/34 therefore contains detailed rules on market access through establishment (mode 3).

256.In those circumstances, I take the view that Directive2012/34 largely covers the area of rail transport.

257.I also consider that the relevant rules in the EUSFTA would alter the scope of the common rules which that directive lays down. For example, the provisions regarding establishment (Section C of Chapter Eight) apply to ‘measures adopted or maintained by the Parties affecting establishment in all economic activities’.(192) Those provisions include protection against discriminatory treatment. Thus, a railway transport undertaking from Singapore seeking to access the EU market by establishing a commercial presence there is to be granted non-discriminatory market access, subject to the limitations set out in the European Union’s Schedule of Specific Commitments.(193) Once established in a Member State, that undertaking should not be treated less favourably than like undertakings of that Member State.(194) The effect of those market access and national treatment provisions is thus to offer railway transport undertakings from Singapore access to the single European railway area established by Directive2012/34. For example, a railway transport undertaking from Singapore would be entitled in principle to obtain a licence under the same conditions as ‘domestic’ railway undertakings.(195) Subject to the horizontal limitation for public utilities in the European Union’s Schedule of Specific Commitments concerning establishment,(196) that undertaking would also have the right to be granted access to railway infrastructure in the Member States(197) and not be treated less favourably than a ‘domestic’ railway undertaking as regards capacity allocation.(198) In other words, the EUSFTA would alter the scope of Directive2012/34.

258.Since the EUSFTA would have that effect on the existing common rules concerning access to the EU market of rail transport services, the European Union has acquired exclusive external competence in the area of rail transport. That conclusion cannot be called into question by the fact that, as regards the supply of rail transport services under mode 4, Directive2014/66 has a more limited coverage than the relevant provisions of the EUSFTA. The third ground under Article 3(2) TFEU does not require that the areas covered by the international commitments and those covered by the EU rules coincide fully.(199)

259.I therefore consider that the European Union enjoys exclusive external competence over the provisions of the EUSFTA concerning rail transport services, on the basis of Articles 91 and 100(1) TFEU, in conjunction with the third ground under Article 3(2) TFEU and the third ground under Article 216(1) TFEU.

260.As regards road transport, apart from the horizontal obligations resulting from Chapter Eight, the European Union has accepted no mode 1 commitments and full mode 2 commitments. Mode 3 commitments are subject to various reservations in certain Member States, depending on the type of transport (passenger transport or freight transport). As regards mode 4, a few Member States have made reservations (taking the form of nationality and residence conditions). For auxiliary road transport services, modes 1 and 3 commitments depend on the Member State at issue and the type of auxiliary service concerned. Full mode 2 commitments have been accepted. Three Member States have made reservations under mode 4 (taking the form of a nationality condition).

261.The Commission argues that the mode 2 commitments for road transport services are of limited practical relevance. I reject that argument for the reasons which I have already explained.(200)

262.Does Regulation No1071/2009 nonetheless largely cover the area of road transport services?

263.Regulation No1071/2009 lays down extensive rules concerning admission to, and the pursuit of, the occupation of road transport operator applicable to both road haulage and road passenger transport.(201) It sets out requirements for engagement in that occupation, namely having an effective and stable establishment in a Member State, being of good repute and having appropriate financial standing and the requisite professional competence.(202) Regulation No1071/2009 moreover requires each Member State to designate one or more competent authorities responsible for granting undertakings the authorisations to engage in the occupation of road transport operator if they comply with those requirements.(203) Those rules are completed by sectoral rules in Regulation No1072/2009 concerning access to the road haulage market(204) and in Regulation No1073/2009 concerning access to the market for coach and bus services.(205) The latter two regulations require the undertakings concerned to obtain a Community licence before engaging in those activities.(206)

264.Against that background, Regulations Nos1071/2009, 1072/2009 and 1073/2009 regulate the cross-border supply of road transport services (modes 1 and 2) as well as access to the market of road transport services through establishment (mode 3). Regulation No1072/2009 also contains rules on driver attestation and thus regulates the temporary presence of natural persons in the territory of the Member States for delivering road haulage services (mode 4).(207) Although Directive2014/66 has more limited coverage than the relevant commitments under the EUSFTA concerning mode 4, I consider that existing common rules largely cover the area of road transport.

265.I consider moreover that the scope of Regulations Nos1071/2009, 1072/2009 and 1073/2009 would be altered by international commitments such as those contained in the EUSFTA. My reasoning is in essence similar to that concerning rail transport.(208)

266.In particular, the provisions regarding establishment (Section C of Chapter Eight) apply to ‘measures adopted or maintained by the Parties affecting establishment in all economic activities’.(209) Those provisions include protection against discriminatory treatment. Thus, a road transport operator from Singapore seeking to access the EU market by establishing a commercial presence there is to be granted non-discriminatory market access, subject to the limitations set out in the European Union’s Schedule of Specific Commitments.(210) Once established in a Member State, that operator would have the right not to be treated less favourably than like operators of that Member State.(211) The effect of those market access and national treatment provisions is thus to grant a road transport operator from Singapore non-discriminatory access to the EU market by removing obstacles to their effective establishment there. As a result of the EUSFTA, that operator is to be granted access to that market subject to the same conditions (for example, concerning financial standing or professional competence(212)) as those applicable to domestic operators. In other words, the EUSFTA would alter the scope of Regulations Nos1071/2009, 1072/2009 and 1073/2009.

267.Since the EUSFTA would have that effect on the existing common rules concerning access to the EU market of road transport services, the European Union has acquired exclusive external competence in the area of road transport. Consequently, the European Union enjoys exclusive external competence over the provisions of the EUSFTA concerning road transport services, on the basis of Articles 91 and 100(1) TFEU in conjunction with the third ground under Article 3(2) TFEU and the third ground under Article 216(1) TFEU.

268.In the light of those considerations, I conclude that the European Union shares external competence with the Member States for entering into commitments under Chapter Eight of the EUSFTA, in so far as it concerns air transport, maritime transport and inland waterway transport, including services inherently linked to those transport services; and exclusive external competence on the basis of the third ground under Article 3(2) TFEU to enter into commitments under Chapter Eight of the EUSFTA in so far as it concerns rail transport and road transport (and services inherently linked to those transport services). The European Union enjoys exclusive external competence on the basis of Articles 3(1)(e) and 207(1) TFEU as regards all other services covered by that chapter.

269.I now turn to Section A of Chapter Nine of the EUSFTA. I shall discuss Section B of that chapter together with Chapters Thirteen, Fifteen and Sixteen of the EUSFTA.(213)