EU Court of Justice issued an important opinion on the adoption of trade agreements

Ministry for Foreign Affairs 16.5.2017 18.09 | Published in English on 17.5.2017 at 14.30
Press release

Press release 88/2017
16 May 2017

The EU does not have competence to conclude a free trade agreement with Singapore alone without its Member States, according to the Court of Justice of the European Union. The Court states in its opinion, submitted on 16 May, that certain provisions in the agreement fall within the competence shared between the EU and the Member States.

“We are pleased that we now have an opinion from the Court of Justice. It is expected to clarify the adoption of EU’s trade agreements,” Minister of Foreign Trade and Development Kai Mykkänen says.

According to the Court, the free trade agreement with Singapore is a mixed agreement because certain provisions in the envisaged agreement do not fall within the exclusive competence of the Union. These include, for example, the provisions on non-direct foreign investments and mechanisms for settling disputes between investors and States.

“The Court’s opinion also expands the exclusive competence of the EU in many sectors. The Court’s interpretation seems to be that trade agreement commitments relating to labour law, for example, fall within the competence of the EU when they have direct effects on trade. This could open doors for more versatile ways to ensure a fair competitive position,” Mykkänen explains.

The EU and Singapore completed their negotiations on a free trade agreement in 2014. The agreement is one of EU’s first ‘new generation’ trade agreements which contain not only tariff reductions but also provisions on various other matters related trade. The Commission wanted to clarify the division of competences between the EU and the Member States in connection with the EU’s adoption procedure for the agreement. The Commission submitted a request for an opinion on the matter to the Court in September 2015.

Inquiries: Marja Koskela, Diplomatic Adviser to Minister Mykkänen, tel. +358 40 352 0463 and Jukka Pesola, Director, Unit for Trade Policy, tel. +358 295 351 029

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