In his State of the European Union speech of 13 September 2017, Commission President Jean-Claude Juncker expressed his intention to introduce a fast-track ratification process of trade agreements between the EU and third countries. This decision-making process could eliminate the need for approval by 40 regional and national parliaments of the 28 Member States, preventing attempts by national or regional parliaments to block future trade agreements.
Most chapters in trade deals usually fall under the exclusive competence of the EU and are consequently to be ratified by the European Parliament (“Parliament”) and the Council of the EU. At present, some sections of agreements related to investment protection require ratification by the national or, where applicable, regional parliaments of the Member States. President Juncker advocates the splitting of trade agreements into two parts: (i) a bigger one dedicated to trade and falling under the competence of the EU institutions and (ii) a smaller one related to investment and investment protection that needs to be ratified by national parliaments.
The Commission’s new approach follows a Court of Justice ruling in May 2017, which said that all parts of the EU’s trade deal with Singapore except non-direct foreign investment and investment dispute mechanisms fall under exclusive EU competence. You can read more about it here.
This dualistic model could also prove crucial for a post-Brexit trade deal between the EU and the United Kingdom. The Commission envisages launching negotiations for entering into free trade agreements with Australia and New Zealand. These two deals could be the first where the new legal framework will be used, allowing ratification without the risk of veto by national parliaments.