UNITED Kingdom Prime Minister Theresa May could get a taste of what’s in store for Britain when the European Union’s (EU) top court spells out how the EU should ratify a free-trade pact with Singapore, the tiger economy some want post-Brexit Britain to emulate.
Judges at the EU Court of Justice will say on May 16 whether the Singapore deal must undergo a tortuous process of endorsement by national parliaments and regional assemblies on top of approval from the EU—a step that the UK would be anxious to avoid, as it gears up for its own trade talks with its former EU partners.
“May’s objective of a comprehensive trade deal being agreed within two years were never very realistic,” said Steve Peers, a professor of EU law at the University of Essex. “If it has to be ratified by all national parliaments, that’s even less realistic.”
Singapore and the EU have been negotiating their free-trade agreement since 2010. An adviser to the EU court signaled last December that individual nations should also ratify it because some aspects, such as dispute settlement, labor and environmental standards and trade in air transport services, fall under national jurisdiction.
Step back
A ruling upholding this would be an obvious step back for Singapore, the largest trading partner of the EU from the Asean, according to Lawrence Loh, director of the Centre for Governance, Institutions and Organizations at the National University of Singapore Business School.
“EU-Singapore trade has been growing faster for services than for goods, so any dampener in free trade will affect the services industry more,” Loh said.
But the case “is a big deal” for the UK too, because the decision “will clarify a lot of issues that might arise when negotiating a long-term, post-Brexit trade deal between the UK and the EU,” Peers said. “To some extent, it might map out a ‘minefield’ of issues to avoid, if the UK seeks to avoid all member-states having vetoes.”
While the formal two-year countdown until Britain leaves the EU was triggered on March 29, European Commission President Jean-Claude Juncker said the real political negotiations on Article 50 will start after the UK has held parliamentary elections on June 8. EU governments are debating a set of directives for the bloc’s negotiator Michel Barnier, outlining the method and objectives of withdrawal talks.
Comprehensive deal
Even if Tuesday’s ruling sets a legal precedent for an accelerated trade deal by allowing just EU institutions to sign off, that “does not necessarily mean that the UK would be able to achieve an agreement of the style it wants with the EU in a matter of two years,” said Aarti Shankar, a policy analyst at London-based think tank Open Europe.
The Singapore accord remains quite limited and the UK would likely be looking “for a more comprehensive trade deal than what we have seen so far”, both in trade and services, and potentially even a chapter on migration, Shankar said.
Even after Brexit, when the court’s rulings may no longer have binding powers over the UK, they will still bind the EU and as such “determine what constraints the other party to the agreement is under as it negotiates,” Peers said. “That is bound to impact upon the UK
indirectly.”