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ECJ ruling makes future UK-EU trade deal harder

The European Court of Justice (ECJ) is currently hearing a case about the EU-Singapore Free Trade Agreement

The European Court of Justice (ECJ) is currently hearing a case about the EU-Singapore Free Trade Agreement, which Oliver Ilott argues could have an effect on the UK’s free trade with the EU after Brexit.  

Today’s opinion from the ECJ may give a greater say to member states in agreeing future EU trade deals.

The ECJ has today published the opinion of its Advocate General, stating that the EU-Singapore Free Trade Agreement ‘can be concluded only by the European Union and the member states acting jointly’.

The European Commission, which negotiated the deal with Singapore in 2013, had argued that the EU had the legal competence to complete the deal on its own. But member states disagreed, arguing that some clauses in the agreement – such as those on trade in transport services or portfolio investment – related to areas in which the EU and member states had a ‘shared competence’, meaning that member states also had to give their consent to the deal. Today’s opinion indicates that the ECJ is likely to come down on the side of the member states. 

This matters because it would allow member states to argue that the EU-Singapore Free Trade Agreement (EUSFTA) needs to be signed off by each of their national parliaments and 11 regional assemblies. This tortuous sign-off process came close to derailing the EU-Canada Free Trade Agreement.

This may make a future UK-EU trade deals harder to agree.

If the ECJ agrees with the Advocate General’s opinion, it may make it harder for the UK to sign a free trade agreement with the EU in the future.

If the UK seeks to complete a free trade agreement with the EU that touches on any of the issues that the Advocate General has listed as being a ‘shared competence’” with member states (see table below), the agreement may need to be signed off by all 27 member state national parliaments and 11 regional assemblies.

Given that the list of shared competences includes issues like portfolio investment and intellectual property – both key aspects of a future UK-EU trade relationship – it’s likely that any future agreement with the EU would indeed be a mixed agreement.

On one level, that is another administrative headache. Getting deals signed off by all the member states ‘is of necessity likely to be both cumbersome and complex.’

But much more important is the effect that this will have on the shape of any likely future deal. The ratification processes have a direct impact on bargaining power: negotiators that find it hardest to agree a common position have the least scope for concession.

For a future UK-EU deal the prospect of trying to negotiate a ‘mixed agreement’ that has to be signed off by 27 national parliaments and 11 regional assemblies means that the EU will have to try to keep all these potential veto-players happy – and thus be a more intransigent negotiating partner. 

Table: Areas highlighted by the Advocate General as being of ‘exclusive’ EU competence and ‘shared’ EU and member state competence 

FTA table

Topic
Brexit
Country (international)
European Union
Administration
May government
Publisher
Institute for Government

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