BRUSSELS
EU trade deals must endure a potentially bruising process of ratification by all member states, the European Union’s highest court ruled on Tuesday, with possible consequences for Brexit.
Britain hopes to win a fast-track trade deal with Europe after it negotiates its divorce from the EU but the decision by the European Court of Justice could cripple that plan.
In a closely watched decision, the EU court said that any trade deal that includes a non-court dispute settlement system would require ratification by the EU’s 38 national and regional authorities.
The ruling gives power on trade issues back to national politicians at a time when opposition to globalisation in the west is on the rise.
US President Donald Trump won his election last year on a fiercely protectionist agenda and killed off a blockbuster trade deal with Asia within just days in office.
“It follows that the free trade agreement can, as it stands, only be concluded by the EU and the Member States jointly,” the court said in a statement.
The decision applied to an EU-Singapore treaty signed in 2013, but will stand as key jurisprudence for future trade deals including any deal with Britain.
Non-government arbitration systems are a core part of international trade deals and have drawn fierce opposition by activists who see them as being under the influence of corporate interests.
Last year the tiny region of Wallonia almost killed off a huge EU-Canada trade deal after years of talks, because of its opposition to this system.
That tussle highlighted the dangers of a marathon ratification process that involves high-tension votes in national or regional parliaments.
The European Commission, which handles trade negotiations for the EU, saw the Singapore deal as a new standard that reflected bigger powers won by Brussels.
In the commission’s big plans, the Singapore deal would have only required the greenlight of the European Council, which groups officials and ministers from the EU’s 28 governments, and the European Parliament.
“Involving national parliaments in the ratification of free trade agreements will increase the democratic scrutiny and give citizens a stronger voice,” said Paul de Clerck, of Friends of the Earth Europe.
“We call on parliamentarians to reject all deals that include unfair VIP rights for foreign investors,” he said.
British Prime Minister Theresa May has insisted that Britain could negotiate its departure from the European Union and a new trading arrangement within two years.
May’s blueprint for an EU trade deal includes setting up the arbitration systems that would fall under the scope of the court’s decision.
The EU-Canada accord took seven years to negotiate and has only begun the long approval process by national parliaments.
