This excellent monograph offers to date the most comprehensive, legal as well as economic analyses of why the liability regimes of the European Union (EU) and the related jurisprudence of its Court of Justice (CJEU) regarding violations of international trade law (notably the law of the World Trade Organization) and international investment law remain incoherent when compared with the legal liability of the EU and EU member states for violations of European trade, investment, and common market law. The case law of the CJEU on the non-contractual liability of the EU under Article 340 of the Treaty on the Functioning of the EU (TFEU) requires full, adequate, or commensurate compensation for certain infringements of EU law without always clarifying the functions of ‘damages liability’ (e.g. in terms of corrective justice or deterrence). Steinbach's book systematically analyzes the different legal arguments (Part I) and economic arguments (Part II) in favor of EU liability for violations of WTO law before discussing the possible liability of the EU and EU member states for violations of investment agreements (Part III of the book).

Chapter 1 convincingly argues that claims of damages by individuals against the EU for violations of WTO law may be justifiable on the basis of EU law (Article 340 TFEU) as interpreted by the CJEU ruling in the case of Francovich,Footnote ¹ even if the CJEU maintains its jurisprudence on the lack of ‘direct effect’ of WTO legal obligations and of WTO dispute settlement rulings inside the EU. Steinbach also explains why such legal protection should be made available only to EU companies suffering damages caused by illegal EU import restrictions or by related retaliatory sanctions; foreign companies that have their place of business outside the EU should seek legal protection outside the EU (e.g. according to US trade law and WTO law).

Chapter 2 explains why – notwithstanding the Court's denial of ‘direct effect’ for WTO agreements and for WTO dispute settlement rulings – Article 22 of the Dispute Settlement Understanding (DSU) provides only for some flexibility as to ‘when’ and ‘how to comply’, but not as to ‘whether’ to comply with WTO dispute settlement rulings as unconditionally prescribed by Article 3:5 DSU. Even if a WTO decision lacks ‘direct effect’ and does not enable actions for annulment of the illegal EU restrictions, its unconditionality regarding the legal obligation to comply can serve as the legal basis for justifying an action for damages without interfering with the EU's freedom to decide on ‘how and when’ to comply with WTO Dispute Settlement Body (DSB) rulings.

Chapter 3 convincingly argues that in actions for damages – as distinguished from actions for annulment – an EU liability for WTO violations can be justified without requiring ‘direct effect’ of WTO legal obligations on the basis of the three judicial justifications in the Francovich judgment: (1) the principle of effet utile justifies increasing the effectiveness of Article 216:2 TFEU (= legal duties of EU institutions and EU member states to implement agreements concluded by the EU and avoid breaching treaty obligations) through private actions for damages; (2) the welfare-enhancing effects of EU compliance with treaty obligations; and (3) the fundamental rights to effective judicial remedies, and the EU duties of loyal cooperation (Article 4:3 TEU) would likewise be promoted by admitting private actions for EU liability for damages caused by WTO infringements.

Chapter 4 discusses the EU law requirement of a ‘norm intended to protect individual rights’ as a liability precondition under Article 340 TFEU. In view of the explicit and implicit WTO rules on protection – not only of rights of WTO members, but also of private actors and their trading rights, intellectual property rights, and judicial remedies – Steinbach convincingly explains the ‘protective functions’ of many precise and unconditional WTO guarantees of economic freedoms, non-discrimination, rule of law, individual rights, and judicial remedies. If their violation is formally confirmed by a DSB decision, precise and unconditional WTO rules protecting economic actors can meet the requirements of a ‘protective norm’ under Article 340 TFEU justifying individual rights and benefits under EU law. The more globalization transforms national into transnational public goods like the global division of labor based on WTO law, the more should the legal ratification and parliamentary approval of international ‘public goods treaties’ by the EU be interpreted as protecting the rights and social welfare of EU citizens as ‘democratic principals’ of multilevel governance agents.

Chapter 5 discusses the similarities between EU Directives and rulings of the DSB; for instance, both are mandatory as regards their objective, but leave discretion as to how to reach the objective. Steinbach uses the examples of the EC–Bananas III Footnote ² and EC–Hormones Footnote ³ disputes to explain why the remaining legal requirement of EU liability for damages (e.g. identifiability of beneficiaries and their minimum rights) may be fulfilled in case of EU violations of clear and complete DSB rulings that identify the measures to be adopted by national or EU authorities. As explained in Chapter 6, the additional liability requirements developed by the CJEU – such as the requirement of a ‘sufficiently serious breach of a superior rule of law for the protection of the individual’, the delimitability of non-governmental actors adversely affected by the violation of EU law (e.g. Article 216:2 TFEU), and the causality between the unlawful conduct and the damage suffered – may also be satisfied in the case of persistent EU violations of WTO DSB rulings as in the Bananas and Hormones disputes.

Chapter 7 discusses how the EU Charter of Fundamental Rights (EUCFR) also protects economic freedoms, property rights, and judicial remedies with respect to external trade activities. Steinbach convincingly criticizes the CJEU jurisprudence limiting judicial protection of these fundamental rights of individuals to manifest errors in, or arbitrary exercises of, the EU's trade policy discretion even where measures that constituted EU violations of WTO law and of WTO dispute settlement rulings (e.g. in the EC – Bananas III and EC – Hormones disputes) were maintained for many years, thereby causing considerable economic damage to EU traders. This jurisprudence impedes the proportionality review as a cornerstone of the legality review that balances both individual rights (such as the ‘freedom to conduct a business in accordance with Union law’ protected by Article 16 EUCFR) and common interests.

Part II of the volume supplements the legal analyses in Part I by economic welfare and ‘public choice’ analyses. It explains why legal liability of the EU and EU member states for persistent violations of their WTO obligations would be desirable also from economic perspectives. The reasons for the desirability of such legal liability include for example, increasing incentives for rule-of-law, limiting ‘rent-seeking’ by powerful industry lobbies benefitting from illegal re-distribution of ‘protection rents’, and protecting non-discriminatory competition inside the EU against illegal market distortions and harmful trade retaliation. These economic analyses of EU legal practices strengthen the normative arguments for creating legal incentives for holding EU violations of ‘public goods treaties’ more accountable for the benefit of citizens. This is especially the case where such violations and their harmful effects are manifest (e.g. as confirmed by DSB rulings and by the damage calculations of WTO arbitrators), where the lack of legal liability induces EU politicians to ‘externalize’ costs of protectionism, and if the legitimate discretion of the EU legislator is protected by high liability thresholds.

Part III on ‘EU Liability and Investment Treaties’ examines both the more than 1,250 bilateral investment treaties (BITs) of EU member states with third countries, the 450 BITs among EU member states, as well as the new EU investment policy and ‘mixed’ investment agreements concluded by the EU with third countries since the entry into force of the Lisbon Treaty in 2009. Steinbach gives a concise overview of the new EU rules for investor–state disputes, including EU Regulation No. 912/2014 on the shared competences and allocation of financial responsibilities of the EU and EU member states in case of violations of investment treaty obligations, as well as the new EU proposals for reforming investment dispute settlement procedures. The recent jurisprudence by the CJEU on the inconsistency with Articles 267 and 344 TFEU of investor–state arbitration among EU member states,Footnote ⁴ and on the lack of exclusive EU competences to limit individual access to domestic courts inside EU member states by investment provisions in EU free trade agreements (FTAs),Footnote ⁵ confirms the concerns discussed by Steinbach (e.g. at p. 140) that the EU should avoid discrimination of EU investors by granting foreign investors procedural and substantive ‘arbitration privileges’ and more comprehensive property right protection inside the EU, as compared with the more limited EU liability system for European investors. Part III also reviews in great detail the joint and several liabilities of the EU and its member states under ‘mixed agreements’ (e.g. FTAs providing for investor-state arbitration), the internal allocation of financial responsibility within the EU, and related problems in investment disputes (e.g. determination of the respondent according to EU law as determined by the CJEU, cooperation among the EU and its member states in dispute settlement proceedings).

The book by Steinbach offers an exceptionally clear, concise and interdisciplinary analysis of the under-researched incoherencies caused by the different trade, investment, and EU liability regimes, and dispute settlement procedures protecting individuals in international economic law. The book convincingly criticizes inconsistencies in legal, political, and judicial EU practices and elaborates reform proposals that would better protect EU citizens and legal coherence inside the EU legal order; there are good reasons to apply the strict liability standards developed for the transposition of EU Directives also in the context of EU liability to situations involving non-implementation of DSB dispute settlement rulings. Steinbach's brilliant summary of the main conclusions (pp. 163–167), the very comprehensive list of relevant legal and economic literature referenced in the book, and the recent ‘habilitation book’ of Steinbach on ‘rational legislation’ (Rationale Gesetzgebung) confirm the outstanding, academic qualities of Steinbach and of his highly recommendable analyses of EU Liability and International Economic Law.