The latest EU trade ruling may be a victory for democracy, but it's a disaster for Brexit Britain

Every national and regional parliament across the EU will now have to sign off on future trade deals, and the same principle will apply to any future agreement with the UK. This means that an inevitable delay of years before the ratification of a Brexit agreement

Michel Barnier, European Chief Negotiator: The European Commission's view on trade agreements has been overturned by the European Court of Justice – with worrying consequences for any post-Brexit trade agreement with the UK (EPA)

Theresa May might like to think she’s a “bloody difficult woman” but in a landmark judgement that will have major consequences for British business after Brexit, the European Court of Justice might prove a bloody sight more difficult than she.

The court ruled that the EU cannot sign off on comprehensive trade deals – those which mix trade and investment in a single agreement – without obtaining ratification by each every one of the EU’s member states.

The European Commission had argued that it was enough for its trade and investment agreements to be rubber stamped by EU institutions in Brussels and Strasbourg, but the EU’s highest court has found in favour of national parliamentary oversight. This means that elected representatives from Ireland to Bulgaria will have the right to vote in their national parliaments on crucial treaties that have significant consequences for their constituents.

The ECJ ruling came about after the EU-Singapore free trade agreement, which concluded more than three years ago and was one of the first of a “new generation” of international trade deals.

Yet now the judgement sets a precedent for all future European trade agreements, including the deal that Theresa May wants to broker with the EU that will determine the UK’s relationship with Europe after Brexit. It may be a victory for democracy – but it’s one that could spell disaster for Britain.

The ruling confirms that Brussels simply does not have the absolute control over European trade that it claims; for the most complex deals, national parliaments must still be allowed the final say.

Crucially, the court has also recognised the sensitivity around a mechanism that allows multinational corporations to sue governments for loss of profits through EU “corporate courts”. These courts have become the most toxic element in the new generation of trade agreements with the EU, rejected by an overwhelming 97 per cent of respondents in the EU’s public consultation three years ago.

The Commission continues to formally back this system, and has even been supported in so doing by the Conservative Government. Yet the refusal to recognise public opposition has already gone against them. The Commission had previously blocked a European citizens’ campaign against controversial trade negotiations with the US and Canada. But in a separate ruling on Wednesday, the ECJ annulled that decision, stating that it contravened the basic principle of democracy, “one of the fundamental values of the EU.”

The upshot that every national and regional parliament across the EU will now have to sign off on future trade deals that include either portfolio investment or the use of supra-national courts. And the same principle would apply to any future UK-EU agreement. This means that there would be an inevitable delay of years before the ratification of the Brexit agreement.

Labour opposes the principle of companies having their own private and privileged courts in which to settle investor-state disputes. We are patriotic enough to believe there is no good reason why foreign investors from Europe cannot be expected to resolve any disputes fairly through British justice, operating through British courts. And we are European enough to think that our companies can do the same by relying on European courts.

Such negotiation will take good political will, something which being a “bloody difficult woman” has left in short supply in negotiations with our European partners. When every national parliament in Europe has the power to veto our future relationship with the EU, we need to be building a constructive relationship of trust with them, not making idle threats.

Leaving the EU with no trade deal is the worst possible option. It will condemn British exporters to the full range of tariffs and barriers that apply under WTO rules.

This is the reckless Brexit that business is desperate to avoid, which the judgement of the European Court of Justice has just brought a step closer – and which Theresa May threatens to make a reality.

A Labour government is better able to secure the timely trade and investment agreement that we need to protect the jobs and the 44 per cent of our exports that currently find a market in the European Union.

Barry Gardiner is the Shadow International Trade Secretary