With the growing awareness in EU external relations that the existence of Member States' competence does not necessarily allow them to freely exercise such competence, the duty of sincere cooperation laid down in Article 4 (3) TEU is increasingly becoming the focus of academic attention. In light of the vast potential of the duty to encroach on Member State prerogatives, in combination with a number of striking developments in the Court's case law in the field of external relations, particularly in recent years, the question arises whether Article 4 (3) TEU is slowly turning into an instrument for the Union institutions to achieve a loss of national competence, disguised as restrictions on the Member States' freedom to exercise their powers. This thesis investigates which role Article 4 (3) TEU has really played in governing the relationship between the EU and the Member States in external relations. It sets out to answer the positive question of which concept of federalism dominates the exercise of external powers. Building on this foundation, the thesis ultimately endeavours to provide an answer to the normative question regarding the vision of federalism best suited to the needs of both the Member States and the EU when acting on the international scene. In order to answer these questions, the thesis seeks to transpose Halberstam's theory of the political morality in federal systems to the field of EU external relations. Looking at the interpretation given to Article 4 (3) TEU, both in its detailed reasoning and as part of a broader picture may then allow us to appreciate the construction of the loyalty obligation as the reasoned outcome of a constitutional process involving the EU institutions, the Court of Justice and the Member States themselves. It will be argued that instead of pursuing political harmony between the Member States and the Union by way of creeping competence, Article 4 (3) TEU emphasises cooperation, compliance and complementarity in areas where the rigid division of competence would otherwise render the system of external relations ineffective.