BRUSSELS – The European Union is not allowed to close a new trade deal with Singapore without it being approved by all the bloc’s member states, the EU’s Court of Justice ruled on Tuesday.
The European Commission and Parliament had argued that the EU had exclusive competence allowing it to sign the deal by itself, while the Council and governments of member states claimed the agreement fell within competence shared between them and the EU, or even exclusively to the states.
“The free trade agreement with Singapore cannot, in its current form, be concluded by the EU alone, because some of the provisions envisaged fall within competences shared between the European Union and the Member States,” said the Court in a statement, adding that “the agreement can, as it stands, be concluded only by the EU and the Member States acting together.”
However, according to the Court, competence is shared only in two aspects of the deal: non-direct foreign investments and the settling of disputes between investors and states.
The ruling is to be a point of reference in other future EU bilateral deals, such as those being negotiated with Vietnam and Japan, but not the CETA deal signed with Canada, which has been provisionally applied since January until it is officially ratified by the parliaments of all 28 EU member states.
This could also have an effect on any future deals between the EU and the United Kingdom once the Brexit negotiations are complete and the country leaves the bloc, as it makes it more likely that any potential deal will have to be ratified by the member states.
The European Green Party praised the Court’s decision, which they said was historic, as it determined the way in which future free trade deals with the EU are to be negotiated, said European lawmaker Ernest Urtasun.