Issue date
16 May 2017

16 May 2017

A decision announced today (Tuesday) by the European Court of Justice (ECJ) has important consequences for Brexit and the future trade deals that the UK makes with the EU, says the TUC.

The decision relates to the free trade agreement between the EU and Singapore. The Court has decided that two key aspects of the deal cannot be concluded by the EU alone on behalf of its member states, but must also be concluded by member states themselves.

The two aspects of the deal affected are non-direct foreign investment, and the regime governing dispute settlement between foreign investors and EU member states.

The upshot of this for Brexit is that sovereignty lies firmly with EU member states on the approach taken for investor dispute settlement, which will be a central issue in UK-EU negotiations.

The TUC says the UK must factor today’s ECJ decision into its negotiating strategy. An Investor State Dispute Settlement (ISDS) approach, which has been widely criticised for giving too much power to corporations, would be very unlikely to secure support from all EU member states.

TUC General Secretary Frances O’Grady said: "The Investor State Dispute Settlement approach has been controversial across Europe, not least because while it gives tremendous power to corporations, it fails to balance it with corresponding powers for workers.

"The court's decision makes clear that every EU nation has sovereignty over this core issue for Brexit negotiations. That could make ISDS a non-starter. So the sensible approach for the next government is to rule out the idea of ISDS, and to concentrate on a deal that has working people's jobs and rights at its heart."

ENDS

Notes to Editors:
- All TUC press releases can be found at tuc.org.uk/media
- TUC Press Office on Twitter: @tucnews