UK trade agreement may need approval of all EU states

European Court of Justice’s ruling on Singapore deal has ‘huge ramifications’ for Brexit

The European Court of Justice has been described case as the most significant on EU trade policy for 20 years with ‘huge ramifications’ for a future UK-EU deal. Photograph: Stefan Rousseau/PA Wire

The European Court of Justice has been described case as the most significant on EU trade policy for 20 years with ‘huge ramifications’ for a future UK-EU deal. Photograph: Stefan Rousseau/PA Wire

 

The UK may have to wait – and hope – for every single one of its European Union neighbours to give full legislative consent before it can fully benefit from any post-Brexit free trade deal, EU judges ruled on Tuesday.

In a verdict that may also delay and potentially obstruct a string of other EU trade pacts, the European Court of Justice (ECJ) said an agreement struck with Singapore in 2014 cannot take full effect until ratified by 33 national and regional parliaments across the 28-nation bloc.

The European Commission, which runs trade policy for the EU, had hoped Brussels might be free to implement deals without having to consult assemblies, such as that of Wallonia in Belgium that nearly wrecked an accord with Canada last year.

The EU’s last major trade deal to enter force, with South Korea, took five years to be ratified.

The commission, which sought the ruling, said it clarified divisions between EU and national powers.

A British government spokeswoman, asked for comment, said only that the UK hoped the Singapore deal would now be implemented.

London wants a trade agreement to keep much of its current access to Europe’s single market once it quits the EU in March 2019. But Brussels negotiators have warned such deals can take a decade or more from start to finish.

Veto

Any trade pact with Britain would need to be signed off in Brussels by all 27 EU governments after Brexit, but the ECJ ruling implies that, depending on the deal, national parliaments would also get a veto. So would federal Belgium’s five regional assemblies, among them Wallonia and German-speaking East Belgium (population 77,000).

“If the UK wants to sign a swift trade deal with the EU, it may have to get every one of the EU’s national governments to agree if the deal falls within their powers. This is no easy task,” said Laurens Ankersmit, trade lawyer at environmental activists ClientEarth.

Nicole Kar, head of international trade at law firm Linklaters, described the ECJ case as the most significant on EU trade policy for 20 years and said it would have “huge ramifications” for a future UK-EU deal.

Britain, she said, would need to decide if it wanted a more modest agreement likely to be backed or the most comprehensive deal possible that risked falling hostage to member states.

The ECJ said large parts of the Singapore deal fell within the centralised powers of the union. However, a key element that went beyond was its creation of a judicial mechanism to settle disputes between businesses and governments.

The court said that, by removing disputes from the jurisdiction of domestic courts, this required national consent.

Reuters