#CETA: Belgian region of Wallonia holds EU-Canada trade-deal ransom

Last week (14 October) the parliament of Wallonia led by Paul Magnette decided to reject the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada. Most thought this small wrinkle on the road to an agreement that has been exhaustively negotiated and explained would be resolved at this week’s European Summit, but alas no.

Wallonia is the Ohio of Europe - it had a glorious industrial and unionized past, but since its heavy industry went into decline it has gone into a deep economic slump. Like the Trump supporters of Ohio, opposition to international trade deals and a protectionist approach work well with this audience. Assurances by the Commission that trade deals can be ‘win-win’ do not convince this small region of 3.5 million.

What is startling is that the region of Wallonia has been able to hold the rest of Europe and indeed the rest of Belgium hostage. Belgium’s peculiar constitutional arrangements give the regions power to be consulted on international matters. European leaders are confident that an agreement can be reached and many have noted Begium’s ability to compromise and reach agreement.

Paul Magnette, formerly-unknown regional president, is enjoying his day in the sun and support from those who are also opposed to CETA, including the European Parliament’s Green MEPs. He said: "Once a democratic debate is open it's hard to stop it I hope many Parliaments will analyse CETA as seriously as ours did."

In the meantime, Romanian and Bulgarian concerns over visa liberalization have been assuaged with assurances that an agreement on this matter could be agreed by the end of 2018.

The Commission and Council took the decision to give the agreement further democratic backing by putting it to each country, which is called a 'mixed agreement'. The agreement had already been accepted in the Council, with the nod from of all heads of government and by the European Parliament. In order to get to this stage, the EU had guaranteed that it would fully protect and uphold Europe's standards in areas such as food safety and workers' rights. CETA contains all the guarantees to make sure that the economic gains do not come at the expense of democracy, the environment or consumers' health and safety. The agreement is held up by trade specialists as an exemplar for further trade deals.

Lessons for the UK

The UK’s plans for life post-Brexit are, as yet, far from clear, with speculation on whether the UK will go for a hard Brexit, soft Brexit, dirty Brexit, intelligent Brexit, stupid Brexit or a sunny-side-up Brexit (which probably means no Brexit at all).

Some have speculated that a CETA type agreement might be the only option for the UK if it wants complete control of its borders, and freedom to negotiate trade deals with the rest of the world.

If so, the ongoing EU-Canada deal tells a cautionary tale. The UK can anticipate a long, drawn-out negotiation, with no guarantee that the unanimity required for agreement will be achieved.

Indeed, if Canada-EU relations are complicated, UK-EU relations are several times more so, as the UK is much more reliant on trade with the EU. Theresa May has reportedly told her cabinet that if the UK takes the ‘hard’ Brexit option, it will have to increase trade with other trading partners by 37% - a tall order for any economy, and particularly difficult without any idea of what sort of relationship the UK will have with non-EU partners post-Brexit.

Prime Minister May is meeting with Jean-Claude Juncker this afternoon. In the light of today’s (21 October) development, the Commission’s hand will be further strengthened in future UK-EU negotiations.

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