May 22, 2017

Essentially, the CJEU has said that in its opinion the provisions of the agreement relating to non-direct foreign investment and to dispute settlement between investors and States do not fall within the exclusive competence of the EU.  Therefore, the agreement cannot, as it stands, be concluded without the participation of the Member States.

In September 2013, the EU and Singapore initialled the text of a free trade agreement.  The agreement is one of the first “new generation” bilateral free trade agreements, i.e. a trade agreement which contains, in addition to the classical provisions on the reduction of customs duties and of non-tariff barriers in the field of trade in goods and services, provisions on various matters related to trade, such as intellectual property protection, investment, public procurement, competition and sustainable development.

The Commission submitted a request to the CJEU for an opinion to determine whether the EU has exclusive competence enabling it to sign and conclude the envisaged agreement by itself.

The CJEU has said that the agreement with Singapore cannot, in its current form, be concluded by the EU alone, because some of the provisions envisaged fall within competences shared between the EU and the Member States.  Therefore, the agreement can, as it stands, be concluded only by the EU and the Member States acting together.

This opinion by the CJEU could affect the forthcoming negotiations between the UK and the EU in terms of their relationship post-Brexit.  (CJEU Opinion C-2/15 (16 May 2017) — to access the Opinion in full, go to the curia search form, type in C-2/15 and follow the link).