Doing FTAs with the European Union
Business Mirror
February 8, 2017


AS an agreement with “mixed” competencies, the Ceta will be provisionally applied while all the 28 member-states (through their respective national parliaments, or regional parliaments in the case of Belgium) will have to ratify the agreement according to their national constitutional requirements. Some foresee this process taking two years or longer.

EU competences and mixed agreements

THE Ceta experience highlighted the EU’s competences and the phe-nomena of mixed-trade agreements. The EU and its member-states established a legal division of policy competences between each other. This catalogue of competences is divided into three categories: Exclusive (EU acts alone); shared (member-states and EU act together); and coordinated competences (member-states’ policies coordinated at an EU level). Exclusive competences are when the EU can act alone and legislate and adopt legally binding acts, such as for the common commercial policy and customs union.

According to Geert De Baere, associate professor of EU law and international law at the KU Leuven (Catholic University of Leuven), a mixed agreement is when both the EU and its member-states share their competences within the scope of the agreement. It legally obligates the EU to include the member-states to participate within the negotiations and conclusion of the mixed agreement. The EU is well known for concluding many mixed agreements since the 1970s, as it is the general rule in the EU that external competences are usually shared with its member-states so acting externally together is a very typical EU feature.

De Baere asserted the EU can legally conclude international trade agreements by itself based on the EU’s exclusivity in the common commercial policy. But under the encouragement of its member-states, it still becomes a mixed agreement. The reasons are the member-states would like to represent themselves externally because foreign policy is a high-profile act of sovereignty, as well as it can be part of their own national interest to represent themselves in the negotiations. De Baere said member-states before the Lisbon treaty created a mixed agreement by simply adding “political dialogue” to the agreement, because it falls under member-state competence, justifying its participation in international agreements that fall under EU exclusivity.

But post-Lisbon treaty, member-states cannot use political dialogue anymore to justify mixed agreements. Their current solution is to interpret article 218 of the Treaty on the Functioning of the European Union in such a way that allows member-states to act externally together with the EU. The member-states do not have to inter- pret it this way, but they want to.

Implications of mixed agreements

WITHIN the EU, there have been many discussions surrounding the issue of mixed agreements, especially as it is internally very unmanageable and time consuming as the EU needs the approval of every single parliament in every single member-state whose difficulty has been exemplified by the Wallonia-Ceta incident.

The commission is currently waiting for a decision of the European Court of Justice (ECJ) in Luxembourg in regard to a clarification of a case it filed in November 2015, on the delineation of competences under the EU-Singapore FTA. Previously, the Council of the EU had disputed the EC’s interpretation the EU-Singapore FTA is an exclusive EU competence in regard to the specific areas of transport services, investments, sustainable development and IPRs. The ECJ may decide on this by early 2017.

The clarification of the ECJ should answer the question whether the agreement falls entirely under the EU’s exclusive competences, or whether the member-states will also have to be involved, at least in certain aspects of the agreement (i.e., a situation of “mixed” competences).

No one can predict how the ECJ will clarify the competences issues. The ECJ may, or may not, take a heavy cue from the concession the commission gave last September on Ceta. But the phenomenon of mixed competences is likely to continue within the EU. And the acceptance or ratification process of any FTA the commission will conclude will now take longer, and be at risk of serious challenges (if not total rejection) by individual EU member-states. Indeed, the demonstration of competence—once savored—will always be sought.