ECJ ruling a blow to European Union free-trade deals

ECJ ruling a blow to European Union free-trade deals

ECJ ruling a blow to European Union free-trade deals

The precedent set could spell trouble for the Transatlantic Trade and Investment Partnership (TTIP), already looking shaky since the election of protectionist US President Donald Trump a year ago, and the Trade in Services Agreement (Tisa).

The EU can now approve global deals either through its institutions, with member state governments signing off, or through all the national legislatures.

Today's decision follows a December opinion issued by the Court's Advocate-General, Eleanor Sharpston, who also decided that the agreement covered a number of issues that are shared competence between the member states and the EU.

Market access, rules on direct investment, on anti-competitive market behavior, on sustainable development and even on issues like intellectual property protection could be decided by the European Union alone, without going back to the legislator in member states.

The European commission, which negotiates trade agreements on behalf of the bloc's 510 million people, had asked for the ruling, following a dispute with EU member states on how far national parliaments needed to be involved.

Even more significantly, several members of the European Parliament suggested it could become easier for the EU to strike trade deals by simply dropping contentious clauses on investment and discussing them in a different format.

The legal opinion at the European Court of Justice (ECJ) could delay progress towards a United Kingdom free trade deal with the EU during the Brexit negotiations.

The EU's executive Commission says that a 2009 EU treaty gave it full responsibility for trade agreements, and argues that it would become almost impossible to clinch major trade deals if every single legislature needs to give its blessing.

It has sought the opinion of the European Court of Justice whether or not it is entitled to conclude the Singapore agreement by itself.

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In December, an advocate general to the court went much further, saying that individual European Union nations should also ratify the Singapore agreement because some aspects, also including labor and environmental standards and trade in air transport services, fall under national jurisdiction.

This decision by no means jeopardises the EU's trade policy; it clarifies the increased powers granted to the Commission by the Lisbon Treaty.

The EU is now pursing trade deals with Mexico and Japan as well as eyeing a crucial deal with the United Kingdom as it exits the EU.

Alice Darling, a member of the trade team at London law firm Clifford Chance, said the judgment could make securing a U.K. -EU trade deal after Brexit a lengthy process.

The ruling raises the spectre of a repeat scenario of last year's deadlock over the EU's trade pact with Canada, which was nearly scuttled by the Belgium's regional parliament in Wallonia. Running a gauntlet of approvals from Lisbon to Tallinn would be highly likely to stretch out the timetable of any EU-U.K. trade deal.

Having lost its effort to sideline national capitals from signing off on trade accords, Brussels now has to convince as many as 38 national and regional parliaments to ratify the Singapore trade pact.

Tuesday's ruling confirmed that European Union states retained power over critical areas such as non-direct foreign investments and dispute settlement, which emerged as one of the most contentious issues in the Canada deal.

The precedent could also complicate Brexit talks if one nation's MPs choose to reject a deal giving Britain access to the common market.

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