October 17, 2016
Ceta is dead for now
Ceta, the Comprehensive Economic and Trade Agreement between the EU and Canada, was already in real trouble on Thursday after the German constitutional court restricted the provisional application of the deal to a bare minimum. On Friday, the regional parliament of Wallonia voted against Ceta by 46 to 16 votes. This means that the Belgian government is not in a position to give its assent to the provisional application of Ceta at the ministerial meeting that due to be in held in Brussels tomorrow.
The Toronto Globe and Mail is not a paper that we usually include in our daily briefing, but its extensive coverage of Ceta exceeds that of the European press by far. The article notes that the Walloons had rejected Ceta before, in April, and had revised the issue after intense lobbying by Canadian and European politicians. These lobbying efforts have had the opposite to effect. The parliamentarians were faxed pages and pages of what they called "interpretive declarations" about how Ceta would be applied in practice, which the paper writes left MPs exasperated. It quoted one of them as saying that the interpretative declarations were meaningless because they are not binding. They want the whole thing opened up, and the various clarifications put into the treaty itself, so that everybody knows where they are at.
Another MPs complained that the treaty covered all economic sectors, except those explicitly stated. It should have been the other way around. And there is also much unhappiness about the private-sector investment courts, which is also the main complaint in Germany. We would expect the German constitutional court to examine this particular issue very closely.
Why Wallonia? Apart from what we know, an aggravating factor may have been the decision by Caterpillar to close a plant in the region, with 2000 job losses.
So what is happening now? We expect to see one of the most massive efforts of political lobbying and bribery to be mounted. This has already started over the weekend. But even if this were to succeed (of which we are not sure, given the scale of the majority), it looks as though the scheduled October 27 EU/Canada summit might have to be postponed.
The vote has been met with outrage in Canada. Justin Trudeau noted that nobody would do business with the EU if they cannot sign such a progressive trade agreement, as he calls it. The prime minister of Quebec demanded that the Walloons go back to the drawing board and decide differently.
Wolfgang Münchau welcomes the vote. There are two things wrong with this agreement - and with TTIP, still under negotiation. The first is political. Ceta and TTIP constitute a fulcrum of anti-globalisation protests. The economic benefits they bring are relatively small. They are not worth the risk of driving more and more people to support anti-globalisation political parties. The second reason is that investor tribunals violate the constitutional principles of many EU countries, including Germany.
The fate of Ceta, he notes, is going to have a big impact on the Brexit debates in the UK. If the EU cannot strike a trade agreement with Canada, it will not be able to agree an even more wide-ranging deal with Britain. Münchau concludes that the idea of the UK leaving the EU, and then negotiating a trade deal, is not very attractive from a British perspective.