Opinion procedure 2/15

554.It follows from all the foregoing that, for the purpose of assessing the allocation of competences between the European Union and the Member States, the EUSFTA falls to be divided into several discrete parts. Those parts are: the provisions falling within the common commercial policy; the provisions liberalising transport services between the European Union and Singapore and therefore falling within the scope of transport policy; the provisions governing types of investment other than foreign direct investment, which are subject to the rules relating to the free movement of capital; the provisions governing the non-commercial aspects of intellectual property rights, which are necessary to achieve the objectives of the internal market; the provisions concerning the convergence of fundamental labour standards and environmental standards between the European Union and Singapore and which thus fall, respectively, within the scope of social policy and environmental protection policy; and the provisions concerning the conservation of marine biological resources, which fall under the fisheries policy.

555.None of those parts can be identified as either the main or predominant component of the EUSFTA or as being ‘merely incidental’ or ‘extremely limited in scope’.

556.Since not all of those parts fall within the scope of the European Union’s exclusive external competences, the EUSFTA cannot, on the basis of the European Union’s exclusive competences, be concluded without the participation of the Member States.

557.My detailed view on the allocation of competences between the European Union and the Member States with respect to the various parts of the EUSFTA is as set out below.

558.The European Union enjoys exclusive external competence, pursuant to Articles 3(1)(e) and 207(1) TFEU, as regards the parts of the EUSFTA which comprise the provisions falling within the common commercial policy. Those provisions relate to:

–objectives and general definitions (Chapter One);

–trade in goods (Chapters Two to Six);

–trade and investment in renewable energy generation (Chapter Seven);

–trade in services and government procurement (Chapters Eight and Ten), under exception of those parts of the EUSFTA applying to transport services and services inherently linked to transport services;

–foreign direct investment (Chapter Nine, Section A);

–the commercial aspects of intellectual property rights (Chapter Eleven, under exclusion of the provisions relating to the non-commercial aspects of those rights);

–competition and related matters (Chapter Twelve); and

–trade and sustainable development in so far as the provisions in question primarily relate to commercial policy instruments (Chapter Thirteen, under exclusion of the provisions referred to in points 559 and 562 below).

559.The European Union also enjoys exclusive external competence, pursuant to Articles 3(1)(d) and 43(2) TFEU, as regards the parts of the EUSFTA relating to the conservation of marine biological resources (Article 13.8(a), (c) and (d) of the EUSFTA).

560.Furthermore, the European Union enjoys exclusive external competence, pursuant to Articles 91 and 100(1) TFEU in conjunction with the third ground under Article 3(2) TFEU and the fourth ground under Article 216(1) TFEU, as regards the provisions of the EUSFTA concerning trade in rail and road transport services (Chapter Eight of the EUSFTA.

561.Finally, the European Union also enjoys exclusive external competence in respect of the matters covered by Section B of Chapter Nine, Articles 13.16 and 13.17, and Chapters Fourteen to Seventeen of the EUSFTA in so far as those provisions apply to (and are therefore ancillary to) the parts of the EUSFTA for which the European Union enjoys exclusive external competence.

562.The European Union’s external competence is shared with the Member States with respect to the following components of the EUSFTA:

–the provisions on trade in air transport services, maritime transport services, and transport by inland waterway, including services inherently linked to those transport services (Chapter Eight), on the basis of Articles 4(2)(g), 91, 100, and the second ground under Article 216(1) TFEU;

–the provisions on types of investment other than foreign direct investment (Chapter Nine, Section A), on the basis of Articles 4(2)(a) and 63 and the second ground under Article 216(1) TFEU;

–the provisions on government procurement in so far as they apply to transport services and services inherently linked to transport services (Chapter Ten), on the basis of Articles 4(2)(a) and 26(1), and the second ground under Article 216(1) TFEU;

–the provisions relating to the non-commercial aspects of intellectual property rights (Chapter Eleven), on the basis of Articles 4(2)(a) and 26(1) and the second ground under Article 216(1) TFEU;

–the provisions laying down fundamental labour and environmental standards and thus falling within the scope of either social policy or environmental protection policy (Chapter Thirteen), on the basis of, respectively, Articles 4(2)(b), 151 and 153(1) TFEU and the second ground under Article 216(1) TFEU, and Articles 4(2)(e) and 191(4) and the first ground under Article 216(1) TFEU; and

–the matters covered by Section B of Chapter Nine, Articles 13.16 and 13.17, and Chapters Fourteen to Seventeen of the EUSFTA in so far as those provisions apply to (and are therefore ancillary to) the parts of the EUSFTA for which the European Union enjoys shared external competence.

563.Finally, the European Union has no external competence to agree to be bound by Article 9.10.1 of the EUSFTA (Chapter Nine, Section A), terminating bilateral agreements concluded between certain Member States and Singapore. That competence belongs exclusively to those Member States.

564.It follows from those conclusions that, as it stands, the EUSFTA can be concluded only by the European Union and the Member States acting jointly.

565.A ratification process involving all the Member States alongside the European Union is of necessity likely to be both cumbersome and complex. It may also involve the risk that the outcome of lengthy negotiations may be blocked by a few Member States or even by a single Member State. That might undermine the efficiency of EU external action and have negative consequences for the European Union’s relations with the third State(s) concerned.

566.However, the need for unity and rapidity of EU external action and the difficulties which might arise if the European Union and the Member States have to participate jointly in the conclusion and implementation of an international agreement cannot affect the question who has competence to conclude it. That question is to be resolved exclusively on the basis of the Treaties.(421) It follows that practical concerns as regards the negotiation and conclusion of the EUSFTA and its implementation are not capable of eliminating the divergences which I have identified in my Opinion between the wide range of matters governed by that agreement and the scope of the common commercial policy as it results from the Treaty of Lisbon. In other words, the fact that there is not a complete overlap between what is to be regarded as ‘trade policy’ or ‘investment policy’ in international relations (and is therefore covered by an agreement such as the EUSFTA) and what constitutes the common commercial policy as a matter of EU law is not relevant when determining whether the European Union has exclusive competence to conclude such an agreement.

567.One option could of course be to split the EUSFTA into several agreements, depending on the competence(s) involved. However, that is a political decision which requires (in particular) the agreement of the third State concerned.

568.The Court has held that, when an agreement requiring the participation of both the European Union and its constituent Member States is negotiated and concluded, both the European Union and the Member States must act within the framework of the competences which they have while respecting the competences of any other contracting party.(422) It is true that, in principle, each party (including the Member States) must— as matters stand— choose between either consenting to or rejecting the entire agreement. However, that choice must be made in accordance with the Treaty rules on the allocation of competences. Were a Member State to refuse to conclude an international agreement for reasons relating to aspects of that agreement for which the European Union enjoys exclusive external competence, that Member State would be acting in breach of those Treaty rules.

569.Finally, the Court has held on various occasions that, where the subject matter of an agreement falls partly within the competence of the European Union and partly within that of its Member States, it is essential to ensure close cooperation between the Member States and the EU institutions, both in the process of negotiation and conclusion and in the fulfilment of the commitments entered into. That flows from the requirement of unity in the international representation of the European Union,(423) as well as from the principle of sincere cooperation expressed in Article 4(3) TEU. For the reasons that I have explained in this Opinion, that obligation to cooperate fully applies to the negotiation, conclusion and implementation of the EUSFTA.