In long-awaited Opinion 2/15, the Court of Justice rendered its opinion that following matters fall within the EU shared competence:
- Investor-to-state Dispute Settlement (ISDS),
- The Non-direct Foreign Investment,
- State-to-State dispute settlement relating to portfolio investment and ISDS.
Hence, whenever investment provisions are involved, the Court effectively imposed mandatory 'mixed' nature of the new generation of the EU trade agreements will require ratification by 28/27 national parliaments (pre- and post- Brexit scenario).
The implications of such restriction over the scope of the EU exclusive competence in the Common Commercial Policy are following:
- The excessive delays in the ratification process of the EU trade agreements and accruing their benefits, direct implications for concluded (CETA, EU-Vietnam) and negotiated agreements (suspended TTIP, EU-China Investment Treaty, EU-Mexico and EU-Mercosour Agreements) with incentives to remain within the remit of core-trade issues,
- The slow-down in the negotiating process of the proposal for the Multilateral Investment Court,
- The additional level of complexities in ratification of the hypothetical EU "Brexit" Agreement,
- Counter-constructive approach towards removal of the EU-wide Investment Agreements (signed by the EU Members).
The core of the Court's rationale rested on the fact that ISDS cases would be liable to remove disputes from the jurisdiction of the courts of the Member States of the European Union.
From the trade perspective, the silver lining is that most of the issues in the FTAs can be subject to provisional application. Moreover, the Court also clarified that the EU has exclusive competence over trade in matters related to all aspects of Intellectual Property, aspects of sustainable development and environmental protection.