As the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union was about to be signed by the member states, the whole process was stopped by the French-speaking Belgian region of Wallonia. The region and its president both faced serious backlash, but did they really deserve it? Or did some good actually come out of that mismatched face-off?
Namur calling
It was in mid-2014, that the first process of negotiation of the Comprehensive Economic and Trade Agreement (CETA) was concluded. In order to be implemented, the terms had to be accepted by the ten provinces of Canada and the 28 member states of the European Union, as well as a vote of the European Parliament. In Belgium, due to the Sixth Reform of the Belgian state, which granted the largest possible autonomy to the federal entities, the regions[1] have to be consulted before the federal government is allowed to sign international treaties.[2] The terms of agreement were also revealed to the public in September. The Namur-based Walloon Parliament, the legislative authority for the French-speaking southern half of the country started carefully analysing the agreement, gathering experts, lawyers, unions leaders and member of civil society. It was one of the only parliaments in Europe to scrutinise the deal in this way, which is after all the job of parliaments.[3]
At the same time, some details about the Transatlantic Trade and Investment Partnership (TTIP) negotiations between the EU and the USA, another Transatlantic Free Trade Agreement (TAFTA), started to leak out, notably concerning its dispute-settlements mechanism (ISDS), similar to the ones found in CETA. Wallonia called the EU out on this aspect of the agreement, and France and Germany stated their concerns about such mechanisms.[4] The Commission then proposed some minor changes, but some of the same problematic features remained untouched, namely, the ISDS was still lacking transparency and nothing was implemented to prevent conflicts of interest. That wasn’t enough for the Walloons. While the Commission was planning a signing ceremony for the 27th of October 2016, the Walloon parliament decided not to grant its permission to the federal government to ratify the agreement.[5]
A Gaulish village
Under increasing pressure from the European institutions, Paul Magnette, Minister-President of the Wallonian Region was in a precarious position. His party, the French-speaking socialist party (PS), is part of the S&D group at the European Parliament, which supported CETA all along. His problem was that French-speaking Belgium is largely hostile to both free trade agreements. Magnette unwillingly found himself the speaker of a large and enthusiastic movement.[6]
By the end of 2016, 168 out of the 262 Wallonian communes (the smallest unit of local government in Belgium) had declared themselves TAFTA-free, under the pressure of their citizens or on their own initiative. In most cases, CETA, seen as a mere introduction to TTIP, was specifically mentioned, as in the case of the city of Liège, cultural capital of the Walloon region, where the local government voted a motion to declare the city « hors zone CETA ».[7]
In Brussels, 15 out of the 19 communes declared themselves TAFTA and CETA-free, regardless of their political inclination. Shops and cafés proudly displayed stickers on their doors declaring their establishments « CETA-free » or « TAFTA-free », anti TAFTA activists flooded the streets with some of the same stickers, and welcomed the irony of having built an anti-free-trade zone on the doorsteps of the European Institutions.
Let us not underestimate the importance of local government life in a country where it is extremely lively and plays a crucial role in national politics. Many ecologists and left-leaning associations[8] managed to inform the population and to familiarise it with the intricacies of the agreement, organising crash courses and meetings, then encouraging people to take the question to their local bourgmestre and city council. Worried that their quality of life and hygiene standards would be threatened, as well as weary of the economic consequences of FTA’s in general,[9] citizens started a democratic movement that found its way into the Walloon Parliament, which was now indirectly asking the Commission to amend the agreement.
Uproar ensued. The European Commission seemed scandalised that a democratically, directly-elected institution might express objections towards CETA, an agreement negotiated with the minimal amount of transparency required by the EU Treaties. It didn’t seem to matter that, with its 3.6 million inhabitants, Wallonia weighs more than Slovenia or Lithuania – the impression given by the Commission was that it shouldn’t be able to veto a measure the Council had approved. The wrath of free-trade enthusiasts across the board fell upon Wallonia.[10] They forgot that to Walloons, terroir is sacred, that Belgians are stubborn and that they love to negotiate.[11]
Wallonia’s demands
First off all, it is necessary to point out that there was a consensus in the Walloon Parliament, that CETA should be amended. All parties except Federal Prime Minister Charles Michel’s Mouvement Réformateur (MR, liberal-conservative) supported this initiative.
The Parliament emitted a resolution on the 27th of April 2016,[12] refusing to grant its approval, demanding that the European Court of Justice review the agreement to see if the implementation of the Investor-State Dispute Settlement (ISDS) – later replaced by a new mechanism called Investment Court System (ICS) – was compatible with European competition law. It also demanded that the treaty was converted into what the EU defines as a mixed treaty, that would therefore need to be ratified by the national parliaments of each member state after the vote of the European Parliament. Within the Belgian system Paul Magnette’s Walloon government would not be allowed to grant permission to the federal government to sign the agreement until it was deemed compatible with the European treaties.[13]
The resolution also introduced a series of recommendations: it demanded concrete safeguards to protect fundamental and human rights, European agriculture, biodiversity, food safety, labour regulations, small and medium size businesses’ opportunities, and also clauses on sustainable development, the fight against global warming, protection of the environment and the preservation of public services. Finally, it demanded that the precautionary principle and transparency had to be respected.[14]
The end result
On the 5th of July 2016, the Commission ended up accepting the demand that CETA should be regarded as a mixed agreement[15] and therefore requiring ratification by national parliaments, a demand also advocated, since the previous month, by the Council of Ministers, which had put pressure on the Commission.[16]Then some other offers where made to Wallonia, which refused them because they were not properly addressing its demands. On the 14th of October, the Belgian federal government was again denied the right to sign the agreement. Pressure on Wallonia intensified again.[17] Paul Magnette asked for further negotiations. On the 30th of October, an agreement was reached. The following substantial gains were made.
The dispute-settlements mechanism is now more tempered, with higher emphasis on deontology, and with an appeal mechanism inspired by that of the WTO. Every member state can define independently which of its public services are to be open to the free market. A clause has been added on the protection of labour rights. Another one allows for a better protection of our European Protected Designation of Origin labels.[18] If a distinctive agricultural product is to be usurped by a product from Canada, the PDO label’s protection will be more easily granted to it. Environmental protection has also been reinforced. The new agreement makes things harder for mailbox businesses[19] to enter the European market. Finally, Wallonia received the guarantee that CETA will not be able to change European law, by virtue of the precautionary principle.
Through a democratic process and a dialogue with the civil society, the Walloon Parliament managed to ensure better environmental, labour and consumer protection to all European citizens, all the while making sure local producer and SME’s benefit from CETA. In the middle of a storm, with some accusing them of being anti-European, the Walloon authorities tried their best to get as fair a deal they could get for all of us – in the framework of both the European legal order and that of the WTO.
Let us conclude with one final quote from the 27th of April resolution: “(…) finally, […] European policy efforts must focus not on the conclusion of a disputed and questionable trade agreement but on the deepening of European integration and the need to urgently formulate the answers optimal to the multiple crises that threaten the European construction today.”[20]
[1] The Belgian federal system relies on two distinct types of entities: regions, based on territory (Wallonia, Flanders, Brussels), and communities, based on language (Dutch, French, German).
[2] The Sixth State Reform is the result of the 2010-2011 political crisis that left the country without a federal government for 541 days. Find out more here : http://www.belgium.be/en/about_belgium/country/history/belgium_from_1830/formation_federal_state/sixth_state_reform
[3] JENNAR Raoul Marc, La résistance wallonne, bluff ou brèche ? in Le Monde Diplomatique, Janvier 2017, p.20.
[4] They were replaced by a new mechanism, called Investment Court System (ICS). European Commission, A future multilateral investment court, published on 13 December 2016, available at: http://europa.eu/rapid/press-release_MEMO-16-4350_en.htm
[5] La Libre, La Belgique ne signera pas le CETA le 27 Octobre, published on 14 October 2016, available at: http://www.lalibre.be/actu/politique-belge/paul-magnette-la-belgique-ne-signera-pas-le-ceta-le-27-octobre-5800ab11cd701eed8fcce55a
[6] Belgium was issued an ultimatum by Donald Tusk. RTL, La Belgique sour pression de l’UE, la Wallonie ne plie pas, published on 24 Octobre 2016, available at: http://www.rtl.be/info/monde/economie/ceta-la-belgique-sous-pression-de-l-ue-la-wallonie-ne-plie-pas–861790.aspx
[7] For an interactive map of those zones in Wallonia, Brussels and Leuven, see : http://jacquesremy.carto.com/viz/058e6d42-d204-11e4-b869-0e9d821ea90d/embed_map
[8] But not only. Both FTAs were unpopular across partisan lines. For example, centre-right christian journal La Libre Belgique gave voice to vocal opponents to CETA and TAFTA. (See, among others : La Libre, Bruxelles capitale de l’UE se rêve en “zone hors-TTIP”, published on 22 april 2015, available at: http://www.lalibre.be/debats/opinions/bruxelles-capitale-de-l-ue-se-reve-en-zone-hors-ttip-5537afc235704bb01be78a4d) Other notable example, Olivier Maingain, the head of the nationalist Francophone party DéFI (former FDF, an formerly part of an alliance with the now-ruling MR) and bourgmestre of the wealthy Brussels district of Woluwe-Saint-Lambert, passed a “TAFTA-free” bill.
[9] “Considering that international trade can promote economic growth and development, contribute to the strengthening of ties between peoples, but also increase inequalities.” Parlement Wallon, Résolution sur l’Accord économique et commercial global (AECG), Namur, 27 avril 2016, p.2.
[10] One example: The Economist, Wallonia is adamantly blocking the EU’s trade deal with Canada, published on 22 october 2016, available at: http://www.economist.com/news/europe/21709060-tiny-region-belgium-opposes-trade-reasons-are-hard-understand-wallonia
[11] Remember, they can go on doing it for 541 days.
[12] The Resolution is available here : Parlement Wallon, Résolution sur l’accord économique et commercial global, 27 april 2016, available at: http://nautilus.parlement-wallon.be/Archives/2015_2016/RES/212_5.pdf
[13] Ibid., p.3.
[14] Ibid., p.4.
[15] European Commission, European Commission proposes signature and conclusion of EU-Canada trade deal, published on 5 july 2016, available at: http://europa.eu/rapid/press-release_IP-16-2371_en.htm
[16] International Institute of Sustainable Development, CETA to be concluded as a mixed agreement; Commissions hopes for signing in Ocotber, published on 10 august 2016, available at: https://www.iisd.org/itn/2016/08/10/ceta-to-be-concluded-as-a-mixed-agreement-commission-hopes-for-signing-in-october/
[17] L’Echo, Le gouvernement wallon rejette l’offre de l’Europe sur le CETA, published on 20 october 2016, available at: http://www.lecho.be/dossier/TTIP/Le-gouvernement-wallon-rejette-l-offre-de-l-Europe-sur-le-Ceta/9822264?ckc=1&ts=1489742047
[18] The appellation d’origine protégée (AOP) or in English Protected Designation of Origin (PDO) “identifies products that are produced, processed and prepared in a specific geographical area, using the recognised know-how of local producers and ingredients from the region concerned. These are products whose characteristics are linked to their geographical origin. They must adhere to a precise set of specifications and may bear the PDO logo (…)” https://ec.europa.eu/agriculture/quality_en
[19] Also known as “shell corporation”, mailbox companies are “corporations without active business operations or significant assets. These types of corporations are not all necessarily illegal, but they are sometimes used illegitimately, such as to disguise business ownership from law enforcement or the public. Legitimate reasons for a shell corporation include such things as a startup using the business entity as a vehicle to raise, funds, conduct a hostile takeover or to go public.” http://www.investopedia.com/terms/s/shellcorporation.asp
[20] Ibid., p.4.
