The UK’s push for new trade deals: obstacles and opportunities
In this blogpost for Practical Law Arbitration, I discuss the obstacles and opportunities for the UK to negotiate trade deals.
WIth the entering into force of the Lisbon Treaty in 2009, the EU Member States have – to a large extent – lost their competence to freely negotiate trade and investment agreements.
The exact scope of the competence will be determined by the Court of Justice of the EU (CJEU) in its Opinion on the EU-Singapore FTA, which is expected later this year. The AG has already concluded that the competence is “mixed”, i.e., not fully EU exclusive.
But that does not mean, that the UK cannot do anything anymore in this policy area.
Indeed, Regulation 1219/2012, which I happen to have been heavily involved in negotiating it, (the so-called Grandfathering Regulation) gives EU Member States the power to start negotiations for new investment treaties, subject to prior notification to and authorisation by the EC.
I also recall the importance of Friendship Navigation and Commerce (FCN) Treaties, for example the one of 1952 between the USA and the UK, which is still in force and applicable. Hence, this treaty, which predates the UK’s accession to the EU in 1972, could be a good starting point for the negotiations. In addition, some of the draft TTIP negotiation texts could easily be copied and pasted into a UK-US BIT or free trade agreement.
In short, there is aleady a good basis upon which to successfully conclude negotiations with the USA and other countries fairly quickly. In any case, it is likely to be much quicker and more successful than the failed TTIP negotiations.
There are therefore many opportunities for the UK to conclude good trade and investment treaties without being hampered by the EU institutions and a protracted ratification process in all other Member States (as was the case with Wallonia in relation to the CETA).
Additionally, as Sophie Nappert and I have pointed out previously, after BREIXT, the UK will be able to maintain its existing 100 BITs, which continue to guarantee legal certainty and investment protection to UK investors investing abroad, and to foreign investors investing in the UK.