Mr. Declan Smyth:

The fundamental legal issue is that external trade in goods and services is an exclusive competence of the European Union. The treaties are quite clear that, where the Union has exclusive competence in a given area, the member states are not entitled to adopt legislation or binding measures in those areas unless empowered to do so by a Union legal Act. We must find a Union legal Act that empowers the member state to do that. We have found one in the case of external trade in goods. That is not the case to date in respect of external trade in services. That is the basic legal issue we have identified.