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EU court finds member states must ratify trade deals with investor protections

May 17, 2017

The European Court of Justice on May 16 issued its long-anticipated ruling in its review of the EU-Singapore free trade agreement, finding that the deal -- as well as subsequent EU-negotiated agreements that contain investor protections -- must be approved by a consensus of member state national parliaments.

[Brett Fortnam] May 16th, 2017 [Inside Trade]

The finding by the EU's highest court means that a future U.S.-EU free trade agreement likely would require the approval of all member state national parliaments. Investor protections were part of the Transatlantic Trade and Investment Partnership negotiations, but the U.S. sought an investor-state dispute settlement mechanism while the EU wanted to establish a investment court system with the hopes of it becoming multilateral.

The EU-Singapore FTA includes an ISDS mechanism. The inclusion of such a dispute settlement mechanism requires member state national parliament approval because EU member states cannot oppose participating in arbitration proceedings with investors under the deal as their consent to them is contained within the FTA, the ruling said.

“Such a regime, which removes disputes from the jurisdiction of the courts of the Member States, cannot be of a purely ancillary nature within the meaning of the case-law ... cannot, therefore, be established without the Member States’ consent,” the ruling says.

Read more at Inside Trade


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