EU Commission says welcomes court ruling on trade deals

The European Court of Justice on May 16 issued its long-anticipated ruling in its review of the EU-Singapore free trade agreement, finding that the deal - as well as subsequent EU-negotiated agreements that contain investor protections - must be approved by a consensus of member state national parliaments.

In the commission's big plans, the Singapore deal would have only required the greenlight of the European Council, which groups officials and ministers from the EU's 28 governments, and the European Parliament. Britain, she said, would need to decide if it wanted a more modest agreement likely to be backed or the most comprehensive deal possible that risked falling hostage to member states.

The European Court of Justice (ECJ) today (16 May) said that the European Commission can not finalise a free trade agreement (FTA) with Singapore, after the EU executive had asked for clarity on whether it has exclusive competence to handle the talks.

Instead, the Luxembourg court gave European Union leaders the power to pass a free trade agreement by majority vote without the risk of blocks by stubborn parliaments.

After the ruling, MEP Bernd Lange, chairman of the trade committee at the European Parliament, said the decision widened the EU's competences on trade rules.

The deal was blocked for weeks by the regional parliament in Wallonia (Walloon), Belgium, over a number of concerns, and still needs to be ratified by national and regional parliaments in the next few years to fully come into force.

According to the Court, EU institutions don't have exclusive competence in non-direct foreign investments and dispute settlement between investors and states. Such supranational legal powers have been at the heart of opposition in Europe to recent free trade deals, including the last-ditch move by Wallonia's left-wing leaders to halt the EU's CETA pact with Canada a year ago.

"But we still wish that it would not need to go through the national parliaments because we've completed the negotiations". That means national ratification may not be necessary for all the parts of any eventual UK-EU commercial arrangement. The Commission has the power to negotiate everything else - the movement of goods and services, transportation, direct investment, intellectual property, antitrust rules.

In Tuesday's ruling, the court said that most elements could be negotiated and approved by the European Union itself, but said that member states need to be involved when it comes to some rules on foreign investment and provisions for dispute settlement between investors and nations. Romania, for example, threatened past year to block the accord with Ottawa over visa reciprocity.

But the landmark judgement was also seen as a potential boost to hopes of Britain being able to strike a swift new Brexit pact with the European Union - as well as making the United Kingdom an even more attractive option for other countries to trade with.

"This may mean a separation between trade and investment in future agreements".

Paul de Clerck, economic justice programme coordinator at Friends of the Earth Europe, said: "Involving national parliaments in the ratification of free trade agreements will increase the democratic scrutiny and give citizens a stronger voice".

That comes as a blow to the EU's executive arm, the European Commission, which has the sole power to negotiate trade accords on behalf of the bloc.

The key point of the Singapore ruling is that the parliaments will lose their say if the deal does not include these clauses on investment.

  • Eleanor Harrison