CJEU opinion on Singapore: Brings back much needed clarity
The European Court of Justice (CJEU) qualifies non-direct foreign investment (portfolio investment) and investor state dispute settlement mechanism as competences shared between the European Union and its Member States, as stated its opinion published today.
This is a departure from the opinion of the Advocat General, published in December 2016, which qualified, amongst others, provisions on sustainable development and labour rights as shared competences.
Ignacio Sierra, President of EBCA, welcomes the decision by the CJEU:
“The opinion brings much needed clarity on competences of the European Union and its Member States in trade policy. The Court confirms that the Commission is mandated to negotiate modern, comprehensive agreements including chapters on sustainable development and labour standards. It is now up to the Commission and the Member States to develop a solution on investments. This is a major step towards bringing back the efficiency which is expected by stakeholders and our trading partners.”
The court states that an agreement which contains provisions on non-direct foreign investment (portfolio investment) and investor state dispute settlement, cannot be established without the Member States consent. This has in the past led to protracted discussion on the ratification of trade agreements, such as CETA between the EU and Canada.