Landmark ECJ ruling boosts chance of a Brexit free trade deal

Britain’s chance of signing a Brexit free trade deal with the EU has been given a boost after the European Court of Justice (ECJ) ruled that the terms do not have to be separately ratified by regional and national parliaments.

The landmark ruling leaves EU officials free to negotiate a deal on all goods and services without having to get every one of the EU’s 38 national and local parliaments to approve it.

The ECJ issued the ruling after being asked to decide if a trade deal with Singapore required ratification by national parliaments or through a qualified majority vote of EU member states.

“This is the most significant ECJ case on EU trade policy for 20 years and has huge ramifications for any UK-EU FTA,” said Nicole Kar, international trade head at Linklaters law firm.

As long as a deal does not include investment provisions and investor-state dispute mechanisms, the ECJ ruled it can be passed with a qualified majority vote.

If the UK leaves theses areas out of a future trade agreement it can avoid the problems faced during the EU/Canada trade deal, which was held up by the regional Walloonian parliament in Belgium.

The ruling means that UK and EU negotiators can avoid member state politics during talks over goods and services, transport, intellectual property, labour and environmental standards, exchange of information and competition policy.

Allie Renison, head of EU and trade policy at the Institute of Directors, said: “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.

“While the Court confirmed that member states do have a role over aspects of investment, it parted with the earlier Advocate General’s opinion on a raft of important policy areas such as transport, labour and environmental standards, which it said are reserved for the EU executive when negotiating free trade agreements.

“This may mean a separation between trade and investment in future agreements. How this affects Brexit negotiations will depend on whether the final trade agreement includes investment provisions or not, although neither the UK or EU has expressed much interest in this to date.”