Wednesday 18 October 2017

EU trade deals stacked up even before Brexit talks kick off

British Foreign Secretary Boris Johnson Photo: PA
British Foreign Secretary Boris Johnson Photo: PA

Donal O'Donovan and Philip Blenkinsop

British Foreign Secretary Boris Johnson this week claimed that the post-Brexit UK will be "the foremost campaigner for global free trade".

In a speech at the Lord Mayor's Banquet in London the often bumbling Brexit campaigner talked up the potential of selling tariff-free whiskey to India. Meanwhile, closer to home Britain's far more lucrative access to the EU market has been cast into doubt.

International trade talks are notoriously tough to close, even when negotiated government to government.

Negotiating with the EU adds an extra layer of complexity at the best of times, but now a ruling from the European Court of Justice (ECJ) has asserted that external trade deals require ratification from all of the 33 national and regional parliaments within the Union.

The ruling relates to a trade treaty with Singapore, among the first EU agreements to go beyond mutual reduction of customs duties on goods to include investments, public procurement and environmental regulation, and is seen by many as a model of future global trade deals.

It is just one of a raft of trade deals currently being negotiated. Brussels hopes to seal trade agreements soon with Japan, Mexico and the Mercosur quartet of Argentina, Brazil, Paraguay and Uruguay.

It was in negotiations with the United States on a pact known as TTIP, though those talks are on hold since Donald Trump became US President this year.

It raises the prospect of EU negotiators having to go on the road at the end of what's already likely to be a tortuous Brexit process, to then sell the deal to whatever mix of parliamentarians are in situ whenever the deal is closed.

A proposed trade deal with Canada almost came unstuck in 2016 when it was held up by a regional parliament in Wallonia, in Belgium.

The European Commission had hoped for a freer hand to hammer out a new trading relationship with Brexit - where the imperative to close an agreement fast is high if officials want to minimise trade disruption.

The EU's last major trade deal to enter force, with South Korea, took five years to be ratified.

The Commission, which sought the ECJ ruling, said it clarified divisions between EU and national powers.

London wants a trade agreement to keep much of its current access to Europe's single market once it quits the EU in March 2019. But Brussels negotiators have warned such deals can take a decade or more from start to finish.

Any trade pact with Britain would certainly need to be signed off in Brussels by all 27 EU governments after Brexit, but the ECJ ruling implies that, depending on the deal, national parliaments would also get a veto.

The more bodies that get a say on a deal, the greater the opportunity for various lobbies to interrupt, delay or even block elements of the settlement.

"If the UK wants to sign a swift trade deal with the EU, it may have to get every one of the EU's national governments to agree if the deal falls within their powers. This is no easy task," said Laurens Ankersmit, trade lawyer at environmental activists ClientEarth.

Nicole Kar, head of international trade at law firm Linklaters, described the ECJ case as the most significant on EU trade policy for 20 years and said it would have "huge ramifications" for a future UK-EU deal. (Additional reporting Reuters)

Irish Independent

Also in Business