ECJ rules trade deals do not require extra ratification

The European Court of Justice has ruled that EU officials had exclusive powers to negotiate international trade deals without ratification by national and regional parliaments.

The ECJ ruling stems from a request by the European Commission to rule on its authority over a trade deal between the EU and Singapore following a dispute with EU member states on how far national parliaments needed to be involved.

The case took on much wider importance after the Brexit vote.

In its ruling, the ECJ said the EU maintains “exclusive competence” over areas ranging from foreign investment to intellectual property rights and environmental standards.

A statement from the ECJ described the EU-Singapore deal, which the two sides agreed in 2013, as “one of the first ‘new generation’ bilateral free trade agreements”, because in addition to classic provisions on cutting duties and non-tariff barriers, the deal touched on intellectual property protection, investment and public procurement.

Ratification is still required, however, in specific areas, such as inward investment and dispute resolution, but the definition of the EU “competences” is much broader than had been expected.

Business groups in the UK welcomed the ruling, which strips national parliaments of their assumed say on large parts of trade deals, as it could mean there are fewer chances for EU member states to hold up a trade deal between the EU and UK.

Business groups said the centralisation of decision making could help Britain secure a better trade deal more quickly.

“This ruling will likely make it easier for the EU to conclude trade deals without fear of as many hold-ups from national and sub-national legislatures,” Allie Renison, head of EU and trade policy at the Institute of Directors, said.