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Wallonia’s Revenge

The CETA debacle points to a hard Brexit.
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The ability of a tiny Belgian region to nearly squash an EU trade deal paints a picture of an unworkable union. But it doesn’t bode well for the United Kingdom’s plans to leave the EU on its own terms, either.

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© REUTERS/Neil Hall

The European Union has always occupied a contradictory dual image in the British mind.

On the one hand, Brexiteers and the British tabloids tell us the European Project is a devious dictatorship, riding roughshod over democracy and the sovereignty of its constituent member states. National governments have become powerless in the face of the Brussels eurocracy, they tell us.

On the other hand, the Brexiteers argue that those eurocrats are a feckless bunch of incompetents. The EU structure is fundamentally flawed and can’t accomplish anything because of an atrophied system of national checks and balances.

In other words, the EU is both terrifyingly powerful and hopelessly powerless.

This dichotomy was on display during UKIP leader Nigel Farage’s infamous 2010 speech in the European Parliament, where he mocked the first-ever President of the European Council, Herman Van Rompuy, a former prime minister of Belgium. “Who are you? I’ve never heard of you, nobody in Europe has ever heard of you,” Farage blustered. “But I sense though that you’re competent, and capable, and dangerous, and I have no doubt that it’s your intention to be the quiet assassin of European democracy, and of the European nation states.”

It was an odd pivot: an incompetent nobody put in his position because of entrenched national interests, but also a cunning Machiavellian leader wielding the power of a sovereignty-crushing EU democracy. Needless to say, the mild-mannered Van Rompuy didn’t end up doing anything of the kind. In fact, he strengthened the power of national governments during his time in office.

A Non-Country Says No

Ironically, it was the little nation-state of Belgium (attacked by Farage as a “non-country”) that stopped the EU in its tracks this week when one of its regions vetoed CETA, the free trade deal with Canada. And once again, the Brexiteer reaction displayed the usual contradictions.

Canada and the European Commission have been negotiating CETA since 2009. The Commission negotiates free trade deals on behalf of the EU’s 28 member states, and it does so based on a unanimous mandate. Once a free trade agreement is struck, the commission goes back to the 28 national leaders for approval. In the final step, all 28 national parliaments have to ratify the agreement.

Every national government was ready to rubber stamp CETA, despite some noisy protests from concerned citizens, particularly in Germany. But there was a catch: the government of Belgium must get permission from each of its three federal regions (Brussels, Flanders, and Wallonia) before it can enter into any international agreement (the result of haphazard federalization that has been put in place over the last 40 years).

In Wallonia, essentially a one-party Socialist state, free trade is not a particularly popular topic. And so the Belgian Socialists decided to exercise the power given to them by Belgium’s federal structure and block the deal via the Walloon parliament. The reasons are likely not just ideological. The regional government, based in Namur, has a history of trying to hold the national government ransom, threatening to block international treaties unless they are given favours (in other words, more money from wealthy Flanders).

That prompted the Canadian trade minister Chrystia Freeland to declare the deal dead. “It seems obvious that the EU is now not capable of having an international agreement, even with a country that shares European values such as Canada.”

And Prime Minister Justin Trudeau, who was supposed to sign the deal at a special summit in Brussels, was forced to scrap his visit last-minute. It took marathon talks and hours of wrangling between the Belgian federal and regional governments to finally get the Walloons on board.

Like the Mayor of Detroit Vetoing a US Treaty

The CETA drama was an embarrassment for the EU, and it certainly got the Brexiteers very excited. They pointed to it as evidence of the EU’s incompetence. The remain camp told people that one of the main reasons to stay in the EU was to be part of a bloc that could secure excellent free trade deals by speaking with one strong voice. This week’s developments suggest the EU is incapable of doing so – and what a perfect opportunity for the UK to swoop in and strike its own deal. Surely, the rest of the former British Empire would quickly follow.

The Brexiteers are not wrong to point out that this has been a debacle for the EU. The bloc’s reliance on unanimous approval from all its states and parliaments, no matter what their size, continually gets in the way of decisive action. In this case, many would argue, the EU has “too much” democracy or at least an incorrectly functioning democratic check.

Put aside the question of whether the Walloon Socialists were right in their objection to CETA. A situation in which a region of 3.5 million people can veto the decisions of the other 507 million EU citizens (as expressed by their democratically-elected national leaders and parliaments) is not tenable.

Imagine if the United States had to get approval from all 50 governors, and all 50 state legislatures, before it could sign any international treaty. No treaties would ever be signed. The Belgian irregularity makes the comparison even more extreme. This is the equivalent of an EU-US trade deal being vetoed by the Mayor of Detroit.

Only Congress needs to approve free trade deals. Its EU equivalent is the European Parliament. But people don’t yet trust the Parliament enough to be truly representative of the people’s wishes. And so, these decisions are still left to the national governments.

Don’t Be Too Smug, Brexiteers

So the EU was left looking rather foolish, and the Brexiteers are eating it up. But there is something duplicitous about the Brexiteers gleefully mocking the EU for struggling to get all members to on board. After all, isn’t this very “respect for sovereignty” that was the key condition for staying in the EU?

What they’re really saying this week is that the EU is not, as they have claimed, an all-powerful institution which has amassed all law-making power in Brussels and left national governments with little say. But the Brexiteers shouldn’t be too smug about the CETA developments. Yes, it does give credence to their argument that the EU is unworkable. But it also shows that their own plan for Brexit is unworkable.

British Prime Minister Theresa May has insisted that she will be able to get the UK access to the EU single market without abiding by the market’s rules on free movement of people. In other words, EU citizens would no longer have the automatic right to live and work in the UK (and vice versa), but goods and services could still flow freely across the channel.

This is the “soft Brexit”. The “hard” version is far more unappealing: the UK would have no trading relationship with the rest of Europe outside the general rules of the World Trading Organization – leaving it with the same market access as, say, Morocco.

Almost all EU leaders have scoffed at May’s soft Brexit plans – they say they would never give the UK such special treatment. If you want to be part of the market, you have to follow the market rules. The Brexiteers have dismissed this as tough talk at the start of a negotiation. But they are forgetting one fundamental thing: it isn’t only EU leaders that they’ll have to persuade. It’s also the people of Europe.

Yes, it’s that darn EU democracy and sovereignty rearing its head again – the one the Brexiteers insisted didn’t exist. Any arrangement giving the UK special access to the single market would have to be made in a bilateral agreement between Brussels and London. Such an agreement could range anywhere from full access to the single market to just a free trade deal like the one negotiated with Canada. Boris Johnson famously held CETA up as an example of the relationship the UK could have with the EU.

But no matter what the agreement is, it will need approval from all remaining 27 national parliaments – plus the Belgian regions. Given that Wallonia wasn’t inclined to agree to a free trade deal with Canada, why would the UK be different? If the agreement does include full access to the EU market with special rights for the Brits, it’s almost certain Wallonia won’t pass it.

And it’s not just Wallonia, by the way. Why would any of Europe’s remaining 27 national parliaments approve a deal that gives British people special rights in Europe that are not enjoyed by their own citizens? Such a pact would be extremely unpopular with their constituents and unlikely to be passed.

So Brexiteers should be careful as they laugh at the EU’s democratic handicap. It is that very democracy that could leave the UK on the outside looking in.

NB. This blog post was amended on October 27, 2016, to reflect the news that Belgian leaders were able to find consensus and break the CETA deadlock.