Following the initiation of the EU-Singapore Free Trade Agreement (EUSFTA), the European Commission sought an Opinion from the Court of Justice of the European Union (CJEU) on the allocation of competence between the EU and its Member States regarding the Agreement. The EUSFTA provides that it is to be concluded as an agreement between the EU and Singapore without the Member States’ participation. However, in her recently published Opinion, CJEU Advocate General Eleanor Sharpston concluded that the EUSFTA can only be concluded by the European Union and the Member States acting jointly.

AG Sharpston reviewed the areas of the agreement for which the EU enjoys exclusive external competence and those for which it shares external competence with the Member States. Among the latter areas are certain transport services and related government procurement, the non-commercial aspects of intellectual property rights, fundamental labor and environmental standards, and dispute settlement, mediation and transparency mechanisms applicable in the areas of shared competence. Because these parts of the EUSFTA do not fall within the EU’s exclusive competence, AG Sharpston concluded that the Agreement cannot be concluded without the Member States’ participation. She further concluded that the EU has no external competence to agree to be bound by the part of the Agreement terminating bilateral agreements between certain Member States and Singapore.

In accordance with CJEU procedures, the Opinion of the Advocate General is delivered ahead of the CJEU’s decision, which is expected later in 2017 and is likely to follow largely AG Sharpston’s Opinion. A more detailed review of the issues will be provided in a future issue on the basis of the CJEU’s decision. The ultimate decision of the CJEU may have a significant impact on the EU’s ability in the future to conclude comprehensive free trade agreements with third countries.

For more information, contact: John Brew, Charles De Jager