On 16 May 2017, the European Court of Justice (Court of Justice) gave its opinion on the competence of the European Union to conclude the free trade agreement with Singapore. The opinion recognises the exclusive competence of the EU for most of the agreement and has largely resolved a long-running dispute between the Commission and Member States over the distribution of powers under the Lisbon Treaty. The opinion will have a significant impact on the negotiation of future EU trade agreements, whether they are still outstanding or expected (including the potential free trade agreement between the UK and the EU after Brexit). In an opinion dated 21 December 2016, eu General Counsel Eleanor Sharpston QC concluded that the EU-Singapore Free Trade Agreement (EUSFTA) should be concluded by the European Union and the Member States acting jointly, i.e. by the EU and all its member states (as a joint agreement), and not just by the EU alone. Although the notice does not bind the ECJ, the Tribunal tends to follow the approach taken by the Advocate General. The ECJ is expected to issue its own judgment in 2017. In its pioneering opinion 2/15, the European Court of Justice concluded that the entire FREE trade agreement BETWEEN the EU and Singapore fell within the exclusive jurisdiction of the EU, with the notable exception of portfolio investments and the Investor-State Dispute Settlement Mechanism (EIDS). Although the trade agreement with Singapore is “mixed” and therefore needs to be ratified by all 28 Member States, this opinion can indeed contribute to the credibility and effectiveness of EU trade policy. In line with the increased EU trade powers introduced by the Lisbon Treaty, the Court of Justice has confirmed that the EU has full jurisdiction to achieve almost all of its general trade objectives in EU-only free trade agreements, which include trade in goods, services, intellectual property rights, public procurement and sustainable development. If investor-state dispute settlement and portfolio investments are excluded, these future EU free trade agreements will not be threatened by 28 additional – and sometimes unpredictable – ratification procedures in the Member States.
The Commission should therefore only pursue free trade agreements in the EU and cover portfolio investments and the settlement of investor-state disputes, such as the new investment adjudicative system, in separate or non-separate agreements. On the other hand, Member States should refrain from deliberately mixing up the EU`s free trade agreements, as this would run counter to the spirit of the Lisbon Treaty and the jurisprudence of the Court of Justice. According to an opinion of the European Court of Justice (ECJ) in Luxembourg, the initial AEE was a so-called joint agreement.