Not all parts of the EU-Singapore agreement fall within the EU’s exclusive competence and therefore the agreement cannot be concluded without the participation of all of the member states, in the view of the Advocate General of the Court of Justice of the EU in an opinion delivered on Wednesday 21 December. The Court’s decision, called its “opinion”, will be delivered in 2017.
The text of a free-trade agreement, negotiated between the Commission and the Singaporean authorities and initialled in 20 September 2013 (see EUROPE 10926) provides that it is to be concluded as an agreement between the EU and the Republic of Singapore, without the participation of the member states.
The Commission argues that the EU has exclusive competence to conclude the agreement and Parliament generally agrees with it.
The Council and the governments of the member states (which all, with the exceptions of Belgium, Croatia, Estonia and Sweden, submitted written observations to the Court) contend that the EU cannot conclude the agreement on its own because certain parts fall within the shared competence of the EU and the member states, and even the exclusive competence of the member states. They consider that the negotiating directives provided for a “mixed agreement” and not one concluded by the EU acting alone.
Given these differing views, in spring 2014, the European Commission referred the matter to the Court of Justice seeking an opinion under Article 218 (11) TFEU on the allocation of competence between the EU and the member states as regards the EU-Singapore free-trade agreement, in order to determine whether the EU acting alone can sign and conclude this agreement or whether the participation of the member states is required (see EUROPE 11267).
In her opinion, Advocate General Eleanor Sharpston considers that this agreement can only be concluded by the EU and the member states acting jointly.
After setting out the principles established in the Court’s case-law and partially codified by the Treaty of Lisbon in relation to EU exclusive competences and the competences that the EU shares with member states, both internally within the territory of the EU and externally in its relations with third states, Advocate General Sharpston then applied these principles to analyse the EU-Singapore free-trade agreement, chapter by chapter.
She concludes that the EU enjoys exclusive external competence as regards the parts of the agreement which cover the following matters: - objectives and general definitions; - trade in goods; - trade and investment in renewable energy generation; - trade in services and government procurement, with the exception of those parts of the agreement applying to transport services and services inherently linked to transport services; - foreign direct investment; - the commercial aspects of intellectual property rights; - competition and related matters; - trade and sustainable development insofar as the provisions in question primarily relate to commercial policy instruments; - the conservation of marine and biological resources; - trade in rail and road transport services; and - dispute settlement, mediation and transparency mechanisms in so far as those provisions apply to (and are therefore ancillary to) the parts of the agreement for which the EU enjoys exclusive external competence.
She concludes that the EU’s external competence is shared with the Member States with respect to the following matters: - provisions on trade in air transport services, maritime transport services and transport by inland waterway, including services inherently linked to those transport services; - types of investment other than foreign direct investment; - provisions on government procurement in so far as they apply to transport services and services inherently linked to transport services; - provisions relating to the non-commercial aspects of intellectual property rights; - provisions laying down fundamental labour and environmental standards and falling within the scope of either social policy or environmental policy; and - dispute settlement, mediation and transparency mechanisms in so far as those provisions apply to (and are therefore ancillary to) the parts of the agreement for which the EU enjoys shared external competence.
The Advocate General adds that, in her view, the EU has no external competence to agree to be bound by that part of the EU-Singapore free-trade agreement which terminates bilateral agreements concluded between certain member states and Singapore. In her view, that competence belongs exclusively to the member states concerned.
Lastly, while the Advocate General notes that difficulties may arise from a ratification process involving all of the member states alongside the EU, she considers that that cannot affect the question of who has competence to conclude the agreement. (Original version in French by Emmanuel Hagry)