Any sweeping trade deals the EU wants to sign with other countries will have to be approved by member state governments, a senior EU lawyer has said, in an opinion that could deepen complications over Britain’s post-Brexit future.
Eleanor Sharpston QC, an advocate general at the European court of justice, argued in a ruling released on Wednesday that an EU trade deal with Singapore could only be finalised by the EU and member states, and not by Brussels institutions acting alone.
In practice, this means the deal may have to be ratified by at least 38 national and regional parliaments, including the EU’s 28 national parliaments, at least five regional and linguistic parliaments in Belgium and at least five upper houses, including those of Germany and Italy.
Sharpston’s opinion does not bind the Luxembourg-based court, which is expected to issue its judgment in early 2017. But the court follows the views of advocate generals in a majority of cases.
If her opinion prevails, the EU could find it trickier to sign wide-ranging free-trade agreements. Life would also be harder for the British government, as any post-Brexit trade deal with the bloc could potentially require the approval of at least 38 national parliaments.
This scenario could add years to finalising a trade deal, leaving the British government facing the nightmare possibility that any one regional or national assembly could block a deal.
A taste of the possible drama to come was hinted at earlier this year when the Walloon region of Belgium threatened to veto an EU-Canada trade deal following seven years of tortuous negotiations and legal drafting.
The current case hinges on whether an EU trade deal with Singapore can be finalised by the European commission alone, or whether the approval of national governments is also needed.
The European commission, which negotiates trade agreements on behalf of the EU’s 510 million people, argues it has the power to sign agreements. But national governments contend that the trade deal touches on national competences and requires their approval.
Sharpston said the Singapore agreement, under discussion since 2010, could only be concluded by the commission and member states together.
“While the advocate general notes that difficulties may arise from a ratification process involving all of the member states alongside the EU, she considers that that cannot affect the question of who has competence to conclude the agreement,” she wrote.
She distinguished between EU competences and national ones. The European commission may take comfort from the fact it was deemed to have exclusive power to negotiate trade agreements on a wide range of issues, including trade in goods and many services, foreign-direct investment, many intellectual property questions and competition policy.
But the commission must give member states a say if a trade agreement covers trade in transport services, aspects of public procurement, as well as provisions affecting labour, social or environmental policy, Sharpston said.
A European commission spokesperson said: “This is an important element contributing to the court’s reflection, so we are of course carefully analysing it. However, it must be clear that no definitive conclusions can be drawn until the court itself issues its final opinion.”
The EU currently has 34 trade agreements covering 60 countries. EU trade negotiators have embarked on 19 separate trade negotiations covering 52 countries, including the Transatlantic Trade and Investment Partnership with the US, now put into the deep freeze following the election of Donald Trump.
These trade deals have evolved from relatively simple agreements centred on cutting tariffs to far-reaching accords covering everything from mutual recognition of environmental, safety and labour standards to public procurement.
As a result, national governments are increasingly challenging the EU’s sole competence to conclude such sweeping trade agreements, amid a growing public backlash against free trade and the power of obscure trade tribunals to settle disputes between governments and large corporations.
