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EU ruling could complicate new trade deals - including UK's

17 May 2017
EU ruling could complicate new trade deals - including UK's

An EU-Singapore free trade deal can not take effect fully unless parliaments in all 28 member states approve it, the EU's top court has decided.

It said all 28 European Union countries need to approve the deal, which then needs to be tabled before European Union member states' national and regional parliaments.

In a surprise decision that could smooth the way to a post-Brexit trade agreement, the court imposed legal limits on the power of individual countries to block EU-wide trade deals.

Ming said, "Finally, some good news on the major trade deals that are now being negotiated by the European Commission on behalf of all us in the EU, the likes of TTIP (with the USA), CETA (with Canada), Mercosur (with South American countries)".

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.

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 EU-Canada accord took seven years to negotiate and has only begun the long approval process by national parliaments.

Last October, the government of the Belgian region of Wallonia nearly torpedoed the deal when it presented last minute demands for changes, including criticisms on the investor dispute settlement system.

The court said the European Union maintains "exclusive competence" over areas including foreign investment, intellectual property rights and environmental standards. 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 past year.

Another option could be splitting the agreement into two halves, one of which would contain all the aspects over which Brussels has exclusive competence, while the other would need to be approved at national and regional level. When the author of The Art of the Deal and current US President Donald Trump proposed a bilateral trade agreement with Germany to Angela Merkel, he was told 11 times by his guest that this was not possible and that he would have to do a deal with the European Union; once this had sunk in, the Trump pragmatically agreed that in that case the US "could do a deal with Europe then". Even the European Commission's Vice President Frans Timmermans last week said he welcomed the big public debates that future trade deals will now have to go through.

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

A key sticking point was the deal's investor-state dispute settlement clauses - a common feature of such agreements that allow foreign firms to sue governments over regulations that impede profit-making.

In terms of its effect on the Brexit negotiations, the ECJ opinion has not worsened the UK's chances of securing a trade deal once it has left the bloc.

The ruling was being closely watched ahead of Brexit negotiations. The case had been closely watched for clues about the likely jurisprudence in other future trade deals, including with the United Kingdom post-Brexit. Others say it increases democratic accountability.