On the 30th of April this year, the CJEU handed down its highly anticipated Opinion 1/17 on the compatibility of the CETA agreement with EU law. As Ankersmit details in his blogpost, the request for an opinion had been part of a widely known quarrel within Belgian internal politics, with Wallonia demanding the Belgium government to expressly consult the Court of Justice of the European Union (CJEU) on the legal merits of that agreement. Respecting that decision from its regional parliament, Belgium asked the CJEU, among other things, whether such an agreement was compatible with the principle of autonomy of the EU.
I will circumscribe this post to the analysis of the precise question of autonomy and leave out many of the other troubling questions such as the ones raised by Schepel’s in his previous post. The argument I put forth is as simple as it is controversial: autonomy, due to its abstract characteristics, is often subject to power injections leading to incoherent interpretations depending on the subject-matter at hand.
Let us see how autonomy has been interpreted before Opinion 1/17 and then analyze it in that light. Continue reading →
As for now, the United Kingdom will leave the European Union on 31 October 2019, unless a withdrawal agreement is ratified before this date. The UK aims to sign “continuity” agreements with third countries to replace existing agreements with the EU before Brexit to avoid disruptions in trade flows. With smaller market leverage and under political pressure to deliver results, there would be an incentive for the UK to adopt an approach that is more lenient than the EU’s in its negotiations of post-Brexit trade agreements. There have been reports of requests from non-EU trade partners for the UK to lower its human rights standards and to soften its food standards once it is out of the EU. However, there are indications that the UK will stick to a normative approach comparable to the EU’s when it comes to development cooperation and environmental standards, as can be seen in the UK’s first continuity agreement with a group of Eastern and Southern African States,. In this post, we argue that despite the pressures, the UK does not diverge from the normative approach that the EU takes in its post-Brexit trade agreements. Continue reading →
All is clear, then: CETA’s Investment Chapter is perfectly compatible with EU Law. According to Advocate General Bot, the agreement is wholly separate from the normative (as opposed to the factual) universe of EU law, and merely protects readily identifiable ‘foreigners’ investing in the EU in the same way as it protects readily identifiable ‘European’ investors in foreign lands. From what we know of the hearing, the Advocate General provides not much more than a useful summary of the talking points offered by the Council, the Commission and the vast majority of the 12 intervening Member States, remarkably united in a bid to save the EU’s new external trade and investment policy. Clearly, the pressure on the Court to follow suit will be enormous. And yet. It is true, CETA builds strong fences to make good neighbors. But let spring be the mischief in me: CETA cannot wall out what EU Law walls in.[i]
The EU’s exercise of its post-Lisbon competences over foreign direct investment (FDI) has been anything but smooth. In Opinion 2/15 the CJEU clarified the EU and Member State competences over the EU’s new generation free trade and investment agreements, resulting in the splitting of the EU‑Singapore agreement into a separate trade and investment agreement. Then, in Achmea the Court found investor-state arbitration (ITA) clauses under intra-EU BITs to be incompatible with EU law, which will result in the termination of almost 200 intra-EU BITs and the non-enforcement of ITA awards rendered under them within the EU. Now, everyone is anxiously awaiting the outcome of Opinion 1/17 – requested by Belgium under the insistencies of Wallonia – and whether the Investment Court System (ICS) under CETA is compatible with EU law. This opinion will not only affect the entry into force and conclusion of the trade and investment agreements with Canada, Singapore, Vietnam and Mexico, but it will have broader implications for the multilateral ISDS reform process and the EU’s investment policy.
Therefore, Advocate General Bot’s extensive opinion delivered on 29 January 2019 (first commentaries here and here) in which it found the CETA ICS to be compatible with EU law deserves scrutiny. I will only focus on the AG’s arguments concerning the exclusive jurisdiction of the Court of Justice over the definitive interpretation of EU Law. In a separate post, Harm Schepel will focus on the AG’s arguments on non‑discrimination. Continue reading →
Case C-244/17 – Commission v Council(PCA with Kazakhstan) is one of the most recent cases in the long list of external relations cases and Opinions decided by the Court (in most cases in its Grand Chamber composition) since the entry into force of the Lisbon Treaty (beginning with Dai-Ichi Sankyo, Case C – 414/11). These cases have covered many aspects of the horizontal balance of competences between the political institutions of the Union, as well as the vertical distribution of powers between the Union and its Member States, in the field of the external relations of the Union.
Inevitably sometimes both aspects are touched upon, as in the present case. On the one hand, there is the question of which institutions play, or should play, a role in the decision-making under Article 218(9); on the other hand questions arise which methods of decision-making should be followed, unanimity or qualified majority voting; whether this should be determined by which legal bases such decisions should be taken and which method should be used to select such legal bases. The first question seems – and is – simple at first sight, but raises an important question about democratic legitimacy. The second question seems very complicated, but – after reflection – can be easily decided on the basis of existing precedents. Continue reading →
After last week’s Achmea ruling of the Court of Justice (CJEU) Member States can no longer legally go ahead with ratifying CETA – the mixed Free Trade Agreement that the EU and its Member States agreed with Canada. Achmea casts serious doubts on the legality of CETA’s investment chapter, which allows investors from one Party to submit to an arbitral tribunal a claim that the other Party has breached an obligation under CETA. By simply going ahead with the ratification, they violate the principle of loyalty under European Union law.
On 6 March, the CJEU declared in its Achmea ruling that the investor-state-dispute-settlement (ISDS) mechanism in the bilateral investment treaty between the Netherlands and Slovakia (NL-SK-BIT) as incompatible with EU law. A request by Belgium is pending before the CJEU asking for clarification on the legality of the new Investor Court System in CETA (Opinion 1/17). Achmea is a clear indication that the CJEU in Opinion 1/17 is likely to find also the Investor Court System in CETA problematic for the autonomy of EU law.
No general obligation exists for Member States to halt national ratification of mixed agreements when their compatibility with EU is questioned before the CJEU. Yet, CETA is different. The clear indication of incompatibility in Achmea imposes an obligation on national Parliaments to halt the CETA ratification process and wait for Opinion 1/17. Continue reading →
Opinion 2/15 on the division of requisite competences between the Union and its Member States for the conclusion of the EU-Singapore FTA has most certainly caused a flurry of academic discussions. Amongst the various topics discussed, two come to mind that are important for this short analysis. First, did the CJEU intend with its reasoning to effectively abolish ‘facultative mixity’ and ‘facultative EU-only’ agreements? (see here, here and here). Second, by placing almost all aspects of the EU-Singapore FTA under exclusive EU competences, with the exception of ISDS and non-direct foreign investment, did the Court of Justice implicitly determine the future of EU trade and investment policy? (see here, here and here). In other words, with a Commission that is determined to prioritize EU-only agreements, is the conclusion of mixed investment agreements in parallel to exclusive trade agreements a logical consequence of Opinion 2/15? Continue reading →
Green Trade and Fair Trade in and with the EU: Process-based Measures within the EU Legal Order, by Laurens Ankersmit (Cambridge, Cambridge University Press, 2017, ISBN 9781107191228); 294 pp.; £85.00
This monograph examines the position of ‘process-based measures’ within the EU legal order. PBMs (also known as ‘process and production method’ rules) are characterised as public and private initiatives that, in the context of international trade, seek to address environmental and social concerns that arise externally; in other words, beyond the territory of the regulating state. Examples include, bans on the importation and sale of cosmetics tested on animals; national and regional product labelling schemes; and private initiatives such as Fairtrade and the Marine Stewardship Council certification programme. Continue reading →
Opinion 2/15 might keep legal scholars, practitioners, and policy-makers busy for the foreseeable future. Many aspects of the ruling deserve comment and further discussion (see already for starters the blogposts here, here, here, here, here, and here) and I would like to follow up my previous post with some comments on an intriguing paragraph of the Opinion: paragraph 161 on the possible suspension of the agreement for a breach of one of its ‘sustainable development’ provisions. The ECJ’s statements here touch upon a long-standing debate whether labour and environmental provisions in trade and investment agreements should be enforceable. The ECJ found that Parties could indeed (partially) suspend or even terminate the agreement for breaches of such provisions. Practicalities aside, this finding is certainly a positive step from a social and environmental point of view. Continue reading →
Opinion 2/15 on the EU’s powers to conclude the EU-Singapore Free Trade Agreement (EUSFTA) delivered Tuesday received considerable attention from the press. This comes as no surprise as the Court’s Opinion has consequences for future EU trade deals such as CETA and potentially a future UK-EU FTA. Despite the fact that the ECJ concluded that the agreement should be concluded jointly with the Member States, the Financial Times jubilantly claimed victory for the European Union, belittling Wallonia in the process. This victory claim calls for three initial comments as there are aspects of the Opinion that might merit a different conclusion. Continue reading →
The UK government has announced that it will pursue a “bold and ambitious Free Trade Agreement” with the EU. The EU, no stranger to negotiating such agreements, typically includes in its FTAs a chapter dedicated to sustainable development. From the start, it should be clear that these chapters come nowhere near the protection offered by current EU environmental legislation. That said, these chapters may present some opportunities. This contribution seeks to explain the EU’s approach to environmental protection in its FTAs and identifies four key options for a potential future environmental chapter in a UK-EU FTA. Continue reading →