Court rules on EU-Singapore trade deal process, with Brexit implications

Legislation | | MIC Customs Solutions |

The European Court of Justice has determined that the planned free trade deal between the EU and Singapore must be approved by all European member states before it can become law.

A court ruling on the legal process underpinning the planned trade deal between the European Union and Singapore could have numerous repercussions for other trade pacts agreed in future.

The European Court of Justice has ruled the proposed EU-Singapore deal requires the individual ratification of all 28 EU member states before it can become law, and that the EU does not have the power to conclude the deal on its own.

Agreed in September 2013, the deal is part of a new generation of bilateral free trade agreements that goes beyond the classical provisions on the reduction of customs duties and non-tariff barriers to also include rulings on related matters such as intellectual property protection, investment, public procurement, competition and sustainable development.

The European Commission and European Parliament had argued that the EU should have exclusive competence enabling it to sign and conclude the agreement by itself, but the court has decided that since the deal concerns matters of non-direct foreign investment and dispute settlement between investors and states, it must be signed off by member states on a case-by-case basis.

A statement from the European Commission said: "The European Commission welcomes today's opinion of the European Court of Justice on the division of competences between the EU and the member states in the EU-Singapore trade agreement.

"The commission will now carefully assess and analyze the opinion of the court and will continue engaging with the European Parliament and member states on the way forward."

This decision could have particular implications for the UK, which has expressed a desire to quickly secure a new free trade deal with the EU before it leaves the bloc in March 2019.

Confirmation that any such deal would need to be approved by all member states could result in a final agreement being delayed, as was the case with the recent EU-Canada trade deal, which was almost derailed entirely due to opposition from one of Belgium's regional parliaments.