Juncker SOTEU speech to include new approach to investment protection
During his annual state of the EU (SOTEU) speech on 13 September, Commission President Juncker will outline his vision for the future of Europe with trade as one of the key topics. Following President Juncker’s reflection papers on the future of the EU that were released earlier this year, Juncker will use the SOTEU address to annouce the Commission’s plans of abandoning the negotiation of trade agreements which contain investment protection provisions alongside others, such as tariffs cuts, rules and market access, in order to speed up ratification and implementation. The European Commission would then negotiate trade agreements on policy areas on which it enjoys exclusive competence, which do not require ratification by 38 national and regional parliaments. Investment protection provisions would be split from these trade agreements and submitted for approval by national and regional parliaments. Thus, the EU seeks to avoid delays of the implementation of trade agreements, as could be seen in the case of the CETA agreement.
This step has to be seen against the background of the opinion which the Court of Justice of the European Union (CJEU) had published in May, confirming exclusive competence of the European Commission over most of the policy areas covered in modern comprehensive trade agreements, with the exception of investor to state dispute settlement and portfolio investments.
Commission President Juncker is expected to announce the EU’s new strategy during his State of the EU (SOTEU) address on 13 September. The EU’s FTAs with Australia and New Zealand will likely be the first on which the new approach will be applied. It remains to be decided how to deal with the agreements with Vietnam and Singapore, which have been concluded with investment protection provisions and are currently held back from ratification and implementation pending a decision by the European Commission.