Sustainability and trade

7th June 2017

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Looking to the post-Brexit future.

The recent European Court of Justice (CJEU) opinion on the free trade agreement between the EU and the Republic of Singapore is important from a Brexit and sustainability perspective.

The question before the court was whether the EU had ‘the requisite competence to sign and conclude alone the agreement with Singapore?’ or whether some parts of the agreement are the shared or the sole responsibility of member states.

From a Brexit perspective, it is important to know that if you negotiate and conclude an agreement at the EU level, it can be ratified at that level and cannot be voted down by one member state. The CJEU opinion is also of interest regarding the content of trade agreements, particularly as it was concluded as one of the first ‘new generation’ bilateral deals – that is, a trade agreement which contains, in addition to the classical provisions on the reduction of customs duties and of non-tariff barriers, provisions on broader matters, such as intellectual property protection, public procurement and sustainable development.

Sustainable development provisions in the agreement include:

  • environmental protection, including the preservation and improvement of the quality of the environment and the sustainable management of global natural resources; and
  • social protection of workers relating to the effective implementation of the principles concerning the fundamental rights at work – specifically: freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced or compulsory labour; the effective abolition of child labour; and the elimination of discrimination in respect of employment and occupation.

The European Council and member states were of the opinion that the sustainable development provisions fell within the competences shared between the EU and nations. The European Commission and Parliament disagreed.

In the court’s opinion, the provisions with respect to sustainable development in the Singapore agreement were within the sole competence of the EU, rather than jointly with the member states.

Why does this matter? It is highly likely that any free-trade agreement negotiated between the EU and UK will contain chapters on sustainable development, environmental protection and worker rights. This is good news and should be relatively uncontentious, given that the UK and EU both apply the provisions through the single market. Perhaps the bigger question is whether similar provisions will be included by the UK when it seeks trade deals with non-EU countries post-Brexit.

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