Brexit and mixity

Posted on 18 Jul 2016 by Brick Court

Aidan Robertson QC

As David Davis, the new Secretary of State for Brexit, has observed “the EU is clumsy at negotiating free trade deals”.

That clumsiness may also apply to any trade deal the UK seeks to negotiate with the EU to replace membership.

Some commentators have suggested that the UK could replicate the trade deal the EU has negotiated with Canada, the Comprehensive Economic and Trade Agreement (“CETA”).

CETA was due to have been entered into by the EU in exercise of its exclusive competence under the Common Commercial Policy, thus denying any individual Member State a direct say in its ratification.

In a volte face on 5 July, the Commission has now announced that Member States will be required to ratify CETA.

What’s changed? In a word, mixity. Or put more formally, shared competence.

The Commission is currently seeking an opinion from the CJEU on the mixity issue as it concerns the EU/Singapore trade deal in Opinion 2/15.

The Commission has taken the view that there is a risk that not all of CETA falls within the EU’s exclusive competence and that it thus falls to be classified as a mixed agreement. On that basis, some or all of CETA would have been vulnerable to challenge in the CJEU without ratification by individual Member States.

The Commission now expresses the view that CETA can have “provisional application” (although it is unclear what that means), until entry into force on national ratification by all 27 or 28 Member States (depending on whether the UK is still a member). However, ratification may not be straightforward. CETA is seen as a stalking horse for the EU/US trade deal, the Transatlantic Trade and Investment Partnership (“TTIP”), and some reports suggest CETA may face difficulties in particular Member States (Luxembourg, Belgium, Bulgaria and Romania have been mentioned).

If a UK trade deal with the EU, like CETA, also potentially involves mixity, how long would national ratification in the other 27 Member States take? Indeed, would it ever be achieved?

In the meantime, perhaps the UK should get on with joining the US- and Japan-led Trans-Pacific Partnership.