EU must get member states' approval for FTAs
The EU Court of Justice has ruled that the Free Trade Agreement with Singapore cannot be concluded by the European Union alone.
The EU and Singapore reached the deal in September 2013, one of the first of the ‘new generation’ bilateral deals. However the Commission requested an opinion from the Court of Justice as to whether the EU had exclusive competence in enabling it to conclude the deal by itself.
Evidence presented to the court showed that parts of the agreement fall within the competencies shared between the EU and member states. The court said that it follows that “the free trade agreement with Singapore can, as it stands, be concluded only by the European Union and member states acting together”.
In presenting its opinion, the court also said that this does not relate to whether the content of the agreement is compatible with EU law, only whether the EU had exclusive competence to conclude the deal.
There are two reasons for the ruling:
1. The EU does not have exclusive competence in non-direct foreign investment
2. Nor does it govern dispute settlement between investors and states.
The ruling has received a positive reaction in Ireland. Fine Gael spokesman on EU affairs, Neale Richmond, has said that the decision must lead to more transparent trade deals.
“The post-Brexit trade deal is of vital importance to Ireland; it will now need to be agreed by all parliaments so it is vital that it is negotiated openly and that the myths are countered openly,” Richmond said. “Perhaps there is a role for the European Ombudsman in ensuring this.”
According to Sinn Fein MEP Matt Carthy this means Ireland must put the EU-Canada deal to a referendum.
“This reinforces the legal opinion I have received that outlines that a constitutional referendum will be required on the recently concluded EU-Canada trade agreement (CETA), due to the inclusion of the anti-democratic Investment Court proposal,” Carthy said. “As an immediate step the Irish Government must now immediately review its position on a referendum on the Canadian-EU trade agreement and specifically the inclusion of an Investment Court that would allow corporations sue governments for enacting progressive legislation, if it impacts on profits. All the evidence suggests that a referendum is required. The government shouldn’t have to be brought to court themselves in order for that referendum to be held.”