A new decision in the European Court of Justice will “hugely” complicate Theresa May’s task of securing a post-Brexit trade deal with the EU, experts have warned.
Advocate General Eleanor Sharpston issued a legal opinion ruling that the Free Trade Agreement which the EU reached with Singapore in 2014 must be ratified by all member states.
The same view is now likely to prevail over any trade agreement with the post-Brexit UK, handing a veto over the deal to a total of 38 national and regional parliaments around the continent, said Cambridge University Professor of EU Law Catherine Barnard, of the UK in a Changing Europe think tank.
It sets the scene for a repeat of the chaos surrounding Canada’s Comprehensive Economic and Trade Agreement (Ceta) with the EU, which came close to foundering after seven years of negotiation earlier this year because of opposition in the Walloon regional parliament in Belgium.
In her ruling, Sharpston - who is the UK’s only judge at the European Court of Justice - recognised that her decision will cause “difficulties” for the EU, but insisted that this did not affect the legal position.
The ECJ said: “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.”
While Sharpston ruled that the EU was able to ratify parts of the agreement as a single body, she found that member-states’ approval will be needed in the areas including air and maritime transport, labour and environmental standards, social policy, some aspects of intellectual property rights and dispute settlement.
Her opinion is not binding until a further decision by the Luxembourg-based court as a whole next year, but in most cases the court follows the Advocate General’s opinion.
Prof Barnard told the Press Association: “This will make Britain’s trade deal hugely more difficult and will make the process hugely longer, because they will have to keep an eye not only on what the EU wants but also what all the national capitals and even the regional parliaments want.
“It’s grossly inconvenient for the UK, which is faced with exactly the same as what happened with the Canadian agreement and the Walloons.
“The Walloons were eventually leant on to change their minds, but that may not be so easy with the UK deal as it will be more contentious because it is likely to be more far-reaching, covering issues like financial services.”
Prof Barnard added: “It is deeply ironic, because Britain has always argued that member states should have control in these sorts of agreements, but now its interests are the opposite. Its previous position has come back to bite it.”
The Singapore ruling was likely to set a precedent for any UK trade deal, following similar decisions over Ceta and the proposed TTIP deal with the USA, she said.
But it has no affect on the “divorce deal” to take Britain out of the 28-nation bloc under Article 50 of the EU treaties, which requires only a qualified majority of nations at the European Council and the approval of the European Parliament.
Speaking to MPs at the House of Commons Liaison Committee on Tuesday, Mrs May said Government negotiators were already working on the possibility that ratification by national parliaments may be needed for a future trade deal.
“There may be, at the end of this process, some matters of mixed competence that need to be ratified by individual national parliaments as well as by the rest of the process,” the Prime Minister told the committee.
“That is something that we are well aware of and that is something that those we will be negotiating with are well aware of.”