Issue of the week: the trouble with Wallonia
The Walloon trade-deal rebellion highlights big problems with globalisation and deep faults within the EU
“When Wallonia wakes she will shake the world.” For months, trade wonks have been misquoting Napoleon in their dire warnings about the Walloons, said Duncan Robinson on Ft.com. This week they came to pass. In an “embarrassing setback” for Eu-canada trade relations, this small Belgian province (population 3.6 million) has cast an effective veto on Ceta, the Comprehensive Economic and Trade Agreement between Europe and Canada, after a tortuous seven-year negotiation. How? Blame EU rules. Broad-ranging deals require unanimity, meaning that all 28 member states must agree; and depending on members’ constitutions, that may mean their regional parliaments have to agree too. That gives “outsized power to anyone willing to hold negotiations hostage”; they are often “those with least to lose from talks failing”. The Canadian trade minister, Chrystia Freeland, was on the verge of tears when she told reporters that the deal was finished.
Still, she could have seen it coming, said Matt Gurney in the National Post (Ontario). In her own book, Plutocrats, she wrote about “the increasing concentration of wealth in ever fewer hands and the economic consequences of those left behind”. With its above-average unemployment, Wallonia is left behind, and its heavily protected farmers were fearful of the deal: it is “a microcosm of the forces that have been increasingly vocal in their opposition to global trade”. We should applaud them, said Aditya Chakrabortty in The Guardian. “For decades, voters have been told there is only one direction of travel: free trade.” That used to be about tackling protectionism; “now it’s about protecting big business – against the public”. It is no coincidence that a chief stumbling block of the treaty for the Walloons was a “dispute settlement system”, which “hands big business the power to sue governments”.
Ceta’s apparent failure fits in with “two popular narratives”, said John Foley on Reuters Breakingviews: “that globalisation is in retreat and that the EU is collapsing under the weight of its own bureaucracy”. What’s certainly true is that these large pacts have become “fiendishly complex”, probably unnecessarily so. One problem, said The Economist, “is that supporters of these agreements fail to defend them” by stressing the benefits of more open trade. By one estimate, Ceta would make the EU s5.8bn a year richer – cash its “stuttering economy” could use. In any case, Britain “would be foolish to rejoice” in the idea that if big trade deals fall through, we might “strike some post-brexit bilateral replacements”. We need to sort out trade with the EU. “And if it cannot reach a [deal] with cuddly Canada, what hope is there for renegade Britain?”