Brexit: ECJ Opinion On EU External Trade Competence

On 16 May 2017, the Court of Justice of the European Union ("CJEU"), in a rare full court composition, delivered its Opinion in Case 2/15 on the extent of the Union's exclusive competence to negotiate free trade agreements.

The case relates to the proposed EU/Singapore free trade agreement, one of the first "new generation" bilateral free trade agreements containing, in addition to 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. In accordance with a procedure set out in Article 218(11) of the Treaty on European Union ("TFEU"), 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 and pursuant to a qualified majority vote in the Council (Article 207(4) TFEU), excluding Member States' veto power.

The analysis of the CJEU is significant for the procedure applicable to the free trade agreement that the UK is hoping to negotiate with the EU in the Brexit context.

On the basis of a detailed analysis of the scope of the EU exclusive competence in the area of the common commercial policy (Article 3(1)(e) TFEU), the CJEU asserts that the EU cannot conclude the agreement with Singapore by itself because certain parts of the agreement fall within a competence shared between the EU and the Member States. However, it ruled that the extent of the EU's exclusive competence is broader than was advised in Advocate General Sharpston's Opinion of 21 December 2016...