Anyone who feels in need of a positive Brexit development should look to the European Court of Justice ruling last month on a Singapore-EU trade deal. It is likely to have beneficial implications for a possible Brexit agreement, as it allows EU institutions to negotiate free trade agreements more easily without the threat of a rogue national parliament blocking the deal.
The court’s ruling involved a power struggle between branches of the EU. The European Commission and European Parliament on the one hand were pitted against the member states (as represented in the European Council) on the other. The council argued that the EU could not conclude the Singapore agreement without referring to the member states because certain parts of the agreement fell within a competence shared between the EU and them or within their exclusive competence.
The court ruled that the trade agreement would need the support of both the individual member states and the EU as it contained provisions relating to areas where competence was shared, those areas being non-direct foreign investment and the regime governing dispute settlement between investors and states. This ruling sets out a demarcation of the rights and competences of the EU and those of the member states. Therefore, as a corollary, the ruling can be seen as a precedent permitting the EU alone to negotiate and approve foreign trade deals as long as they do not include shared or exclusive member state competencies.
The whole Brexit process is haunted by the potential for an aggrieved national parliament to hold the trading block and the UK to ransom over a future trade deal. This happened recently with the EU’s agreement with Canada when a Belgian regional parliament did precisely that.
So this development will be seized on as a possible way to get a more limited Brexit agreement through the EU, avoiding fractious national legislatures. As well as trade and tariff issues, other areas of EU-only competence mentioned by the court included intellectual property, provisions targeting anti-competitive activity and access to the EU market for goods and services.
Robert Bell is a partner at the London office of the US law firm Bryan Cave