Court may help EU side­step lone-wolf at­tack on trade deals

Kuwait Times - - BUSINESS -

A court rul­ing early next year may help the Euro­pean Union out of the kind of em­bar­rass­ing sit­u­a­tion it has just landed in, where a re­gional assem­bly in Bel­gium is block­ing a ma­jor trade agree­ment be­tween Canada and the 28 sov­er­eign states of the EU.

The court case could set a le­gal prece­dent re­lated to an EU trade pact with Sin­ga­pore, which may make it eas­ier for Brus­sels to con­clude fu­ture deals with­out need­ing unan­i­mous back­ing from ev­ery gov­ern­ment and par­lia­ment. How­ever, it can do lit­tle for the Canada agree­ment.

As it is, the gov­ern­ment of Wal­lo­nia, with its seat in the an­cient fortress city of Na­mur, has been likened to As­terix the Gaul de­fy­ing the Ro­mans, for re­sist­ing pres­sure to let Bel­gian fed­eral lead­ers sign the EU’s CETA deal with Canada to­day. The CETA treaty con­cerns not just trade tar­iffs - a power long cen­tralised with the EU in Brus­sels - but also ac­cess to ser­vices mar­kets, par­tic­u­larly some pub­lic ser­vices, where na­tional gov­ern­ments jeal­ously guard their author­ity. That opens it to the wide-rang­ing veto power of EU states and re­gions. But a le­gal opin­ion by the ad­vo­cate gen­eral as early as De­cem­ber, fol­lowed by a rul­ing by the Euro­pean Court of Jus­tice next spring, should clar­ify the sit­u­a­tion. It will de­ter­mine whether a sim­i­lar treaty with Sin­ga­pore falls within the “ex­clu­sive com­pe­tence” of the EU or is “mixed”, need­ing ap­proval in na­tional and some re­gional par­lia­ments.

Trade was once an area of ab­struse in­quiry for pol­icy wonks. Now ef­forts to draft an am­bi­tious trade deal with the United States known as TTIP have en­er­gised mass cam­paigns against that pact and CETA, no­tably by labour unions and en­vi­ron­men­tal­ists. The Euro­pean Com­mis­sion, the EU ex­ec­u­tive, be­gan talks with Ot­tawa seven years ago un­der a man­date from the Coun­cil of mem­ber states. It had wanted CETA to be ap­proved by the Coun­cil as an EU-ex­clu­sive deal. But pres­sure from states, in­clud­ing Ger­many, which sought to ap­pease anti-glob­al­iza­tion pro­test­ers, led the com­mis­sion to ac­cept it as “mixed”. Hop­ing to limit such prob­lems in fu­ture and set a le­gal prece­dent, the Com­mis­sion asked the Euro­pean Court if the Sin­ga­pore deal, agreed in 2014 but not yet rat­i­fied, is EU-ex­clu­sive or not.

Wal­lo­nia’s So­cial­ist-led par­lia­ment has stressed the mixed na­ture of the deal. It cited con­cern about its im­pact on pub­lic ser­vices in twice vot­ing against CETA - ex­er­cis­ing its pow­ers un­der Bel­gium’s highly de­volved con­sti­tu­tion to pre­vent the fed­eral gov­ern­ment from sign­ing up. Asked last week if it was a mis­take to clas­sify CETA as mixed, an ir­ri­tated Com­mis­sion Pres­i­dent Jean-Claude Juncker made clear he thinks blame for that lies with hes­i­tant EU gov­ern­ments.

The CETA de­ba­cle and the court rul­ing are be­ing closely watched by coun­tries the EU has con­cluded deals with - Viet­nam - or is in free trade talks with, such as the United States and Ja­pan, or those it aims to en­gage, such as Aus­tralia and New Zealand. “We are all wait­ing anx­iously for the out­come,” said one diplo­mat of a would-be EU trade agree­ment part­ner.

The EU’s Lis­bon treaty of 2009 says the EU has ex­clu­sive com­pe­tence in “com­mon com­mer­cial pol­icy”, mean­ing trade, and sets out vot­ing rules for mem­ber states’ agree­ment. The Com­mis­sion ne­go­ti­ates but needs the Coun­cil of states to agree. If de­clared an EU ex­clu­sive com­pe­tence, then trade deals like the Sin­ga­pore agree­ment would not need to be ap­proved by some 40 na­tional and re­gional leg­isla­tive bod­ies, al­though Bel­gium might still feel it had to lis­ten to its re­gions.

In­stead, in prin­ci­ple, a deal could be agreed by the 28 na­tional gov­ern­ments in the Euro­pean Coun­cil, ei­ther by a ma­jor­ity vote or, in some cases, by una­nim­ity. “Go­ing mixed means you are go­ing to kill a deal. There’s no way you can get through ev­ery sin­gle par­lia­ment,” said Ho­suk Lee-Makiyama of the Brus­sels trade pol­icy think-tank ECIPE.

The CETA fiasco threat­ens fur­ther the cred­i­bil­ity of the EU, al­ready bat­tered by Bri­tain’s vote to leave the bloc and dis­putes over mi­grants. It also high­lights dif­fi­cul­ties that post-Brexit Lon­don may face in cut­ting a trade deal with the EU. Gianni Pit­tella, the cen­tre-left leader in the Euro­pean Par­lia­ment, whose group in­cludes the So­cial­ists who run Wal­lo­nia, urged re­forms to pre­vent EU pol­icy be­ing blocked.

Guy Ver­hof­s­tadt, for­mer Bel­gian pre­mier and lib­eral leader in the EU par­lia­ment, called for an end to mixed deals: “The Coun­cil can de­cide that it is a purely Euro­pean agree­ment ... That would be a step for­ward in Euro­pean

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