National Post (National Edition)
Wallonia isn’t the only sand in international trade’s gears.
Wallonia’s objections to Canada-EU deal are all too familiar
Here's something you don't hear every day: the eyes of the world are on Wallonia.
This week, we' ll find out if the European Union and the tiny southern region of Belgium can work something out to salvage the Canada-Europe Trade Agreement (CETA), which had been nearing ratification before Wallonia's government voted to block it on Oct. 14. Our trade minister, Christa Freeland, walked out of last-minute negotiations last week practically in tears, expressing frustration that if the EU couldn't work out a trade deal with “nice” Canada, who could it deal with?
It's a good question. But unfortunately, it doesn't just apply to the EU. The sand in the gears of international trade co-operation is piling up, and anyone who thinks it's going to go away anytime soon is smoking something quasi-legal.
Granted, slow-moving trade agreements and regional obstreperousness are nothing new. Canada's early efforts a decade ago to do a deal with the EU were scuppered by regional interests, notably dairy farmers in Quebec. The Doha Round of negotiations at the World Trade Organization is still stalled — take your pick of reasons, from agricultural protectionism in Europe and the U.S. to fears of ceding sovereignty among developing countries — and talks have been going on since 2001.
By comparison, CETA is a relative juvenile, since it's only been eight years in the un-making.
The sad reality of free trade negotiations is something that free trade’s opponents, who like to spew visions of a global neo-liberal cabal bent on undermining the working stiff, rarely care to point out. We consistently hear anti-trade rhetoric from both the left and the right, from the likes of Donald Trump, from at least some of the Brexit folk, and from self-appointed nationalists like Canada’s own Council of Canadians. Yet if there is indeed such an evil cabal, its members are uniquely ineffective in executing their dastardly plots.
The excuses for Wallonia’s opposition are all too familiar, and unlike the free trade cabals’, they have proven to be familiarly effective: concerns about the dispute resolution process and wording, the impact on heavily subsidized local farmers (as The Economist points out, there are three cows for every Walloon), and on and on. These paper tigers have been foisted upon the EU and Canada from a leftist regional government in a Belgian power play that anyone anywhere else in the world could be forgiven for not giving a whit about.
Until now, of course. CETA is the canary in the coal mine. If the EU cannot wrangle its own members, or their disparate regions, into agreeing to a relatively innocuous deal with a small market like Canada, what credibility will it have in other, more important (from an EU point of view) trade negotiations, like the proposed Transatlantic Trade and Investment Partnership with the U.S.?
As some have pointed out, the EU doesn’t have to dysfunction in this way. Ratification by regional legislators is not required by its charter — but in this case, it was given.
That’s a precedent the powers-that-be in Brussels might regret, but it’s a precedent nevertheless. What hope will other multilateral agreements have of surviving ratification? Who will be next to hold the Sword of Damocles over EU trade deals? Alsace? Thuringia?
Of course, there might be some chance still for an eleventh-hour agreement. Or, in the true European way, the eleventh hour might just be kicked down the calendar (despite the EU recent deadline of Oct. 24), and more negotiations might result in something acceptable to the Walloons’ palate. But who knows?
One option for Canada now is to abandon the efforts, and focus on a bilateral deal with its largest EU trade partner: Britain. The reasoning is that the U.K., which has voted to shed itself of European shackles, will be free to negotiate its own agreements, and a bilateral deal will be easier and quicker to come up with than it was with the fractious EU.
Don’ t count on it. As much as Prime Minister Theresa May talks about transforming Britain into a shining example of openness and internationality, millions of Britons voted to leave the EU precisely because they don’t care much for those principles. In the current political climate, how saleable will any U.K. free trade agreement be?
As for the alleged ease of negotiating bilateral agreements, they might be quicker than multilateral ones, but that doesn’t make them quick. Canada, for instance, has been negotiating trade deals with Morocco since 2011, with India since 2010 and with the Dominican Republic since 2007. The Canada-Ukraine Free Trade Agreement (CUFTA), ratified this July, took more than six years to be ratified. Given that the U.K. has a much bigger negotiation on its plate — like the terms of its withdrawal from the EU — any new deals, even with “nice” Canada, are likely many years away.
In fact, the EU’s apparent weak hand on trade doesn’ t necessarily bode well for Brexit negotiations going smoothly. There has been much attention paid to the difficult negotiating tightrope May will be walking, between catering to the hardliners on immigration and sovereignty on the one side, and managing a “soft” Brexit that will maintain British access to the EU common market on the other. Now, it’s clear that the U.K. is not the only one walking a tightrope.
If the Europeans cannot effectively pacify the antiglobal elements within its own alliance — and Wallonia is not alone — then any agreed “soft” Brexit might well find itself in double jeopardy.