CETA breakdown highlights need to share the spoils of globalisation

October 26, 2016

The ground-swell against globalisation has tripped up the Canadian-European Comprehensive Economic and Trade Agreement (CETA). The French-speaking Wallonia region of Belgium objects, leaving the EU 'not capable' of signing an agreement. If Europe can't agree a trade deal with Canada, what hope is there for the Trans-Atlantic Trade and Investment Partnership (TTPI), Australia's negotiations with Europe or, for that matter, of a 'soft' Brexit which would leave the UK economy still closely integrated with Europe?


The core problem for CETA is that agreements of this nature are not just about trade: they impinge on a range of 'behind the border' issues such as labour laws, the environment and food regulation. Thus they cut across the laws and regulations of individual countries. While the negotiations are done by Brussels, they have to be ticked off by 38 regional and national parliaments to make sure there is no conflict with the laws of member states. One region of Belgium, with a population not much more than 0.5% of the EU's total, can stymie the deal. Wallonia is typical of globalisation's losers: a former industrial area unable to withstand foreign competition, with some heavily-protected agriculture which survives only because of the EU's Common Agricultural Policy.


It would, however, be wrong to see this as a minority complaint that can be resolved by some ad-hoc placatory measures for the Walloons. Some 190,000 Germans also petitioned the German Constitutional Court, which ruled that the agreement could go ahead but only if it doesn't cut across 'national competences'. Plurilateral trade deals are in trouble. The much wider TTIP between the US and the EU is in negotiating limbo. The Trans-Pacific Partnership is opposed by both presidential candidates and the hope of sneaking it through in the 'lame-duck' pre-inauguration period seems set to be thwarted by those in Congress who think it should be renegotiated to make it more favourable to American interests.



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