The European Court of Justice Opinion 2/15 addresses the question of the external competence of the EU to conclude a free trade agreement with Singapore (EUSFTA). The nature of the EU’s competence determines the conclusion of an EU-only agreement, or a mixed agreement, jointly by the Union and its Member States. The Court of Justice of the European Union held that the EU competence to conclude the EUSFTA is not exclusive, as long as provisions concerning non-direct investments and dispute settlement fall under the shared competence of the Union and its Member States. The Court of Justice made valuable contributions to the interpretation of the scope of the Union’s competence in the field of common commercial policy, comprising sustainable development provisions, as well as to the interpretation of implied external competences, and clarified the status of non-substantive provisions. However, uncertainty remains as far as the meaning and the impact of a shared competence are concerned.
Eleftheria Neframi and Mauro Gatti
In the first place, the chapter investigates the interaction between the delimitation of the EU’s external competence in the area of trade and investment and the requirement to preserve the essential characteristics of the EU legal order. It follows from the joint reading of Achmea and of Opinion 2/15 that the competence to approve dispute settlement provisions in free trade agreements (FTAs) finds its limits in the preservation of the systemic dimension of the autonomy. On the other hand, the specific balance between competences and objectives reinforces the substantive autonomy of the EU legal order through a dynamic interpretation of external competences. Secondly, the chapter focuses on the EU’s capacity to exercise independently its competences, which is challenged by the recent FTAs. Despite the insertion of clauses on the right to regulate, there is no guarantee of the interpretation of investment protection standards in view of the preservation of the regulatory autonomy of the Union.