Wallonia
sends EU trade policy back to the drawing board
German
lawmakers propose slicing the way EU trade deals are dealt with in
two. Not everyone agrees.
By HANS VON DER
BURCHARD, SIMON MARKS AND ALBERTO MUCCI 10/24/16, 7:47 PM CET Updated
10/25/16, 3:18 AM CET
The European
Commission needs a new trade policy — and fast.
A veto from
Belgium’s French-speaking region of Wallonia has struck a
potentially fatal blow to the EU’s trade deal with Canada and
exposed a devastating structural threat to any future deals, with
countries such as Japan and the U.S.
EU officials are now
scrambling for ways to regain control over one of the few portfolios
in which they ever wielded genuine power. Cecilia Malmström, the
EU’s trade commissioner, conceded last week that the bloc needed to
reappraise how “trade policy should be made in the future” and
stressed that Europe needed to seal trade agreements “in a way that
they are not taking years to be ratified, because things happen so
quickly in a globalized world.”
Some German
politicians in the European Parliament are proposing a way for
Brussels to reassert its authority. They argue that the Commission
needs to roll out a new kind of two-track trade agreement that denies
national and regional assemblies such as Wallonia the ability to veto
the key elements of trade accords that fall under the remit of
EU-wide law, such as tariffs and shared regulations.
National parliaments
should only be allowed a say in the second-tier issues — such as
investment protection — that cross over with national law, they
argue.
“What
we don’t need is 28 states or even regions negotiating alone for
the whole bloc. That has nothing to do with democracy.”
— Daniel Caspary, coordinator of the European Parliament’s
Committee on International Trade
EU trade policy has
fallen into an unexpectedly precipitous death spiral over the past
four months after European Commission President Jean-Claude Juncker
made the fateful decision to pass the Comprehensive Economic and
Trade Agreement with Ottawa to 38 national and regional parliaments
for ratification. The danger of that strategy — treating CETA as a
so-called “mixed” agreement — became clear when Wallonia
vetoed.
“What we have seen
in past months is the EU’s common commercial policy being massively
undermined,” said Daniel Caspary, coordinator of the European
Parliament’s Committee on International Trade and a member of the
German center-right delegation.
“We need to ensure
that the Commission can again make trade deals, which are
democratically approved by the EU’s own institutions,” he said.
“What we don’t need is 28 states or even regions negotiating
alone for the whole bloc. That has nothing to do with democracy.”
Slicing deals in two
Caspary is one of
the leading proponents of slicing trade deals in two. “Wallonia
would no longer be able to take the rest of the agreement hostage,”
he said.
His suggestions have
attracted support from across the political spectrum.
Manfred Weber, the
chief of the center-right European People’s Party group, is
throwing his weight behind the two-track approach. “We should have
two mandates and finally two agreements on the table, one for the
parts under sole EU competence and one for the member states,” he
said.
Even Green lawmaker
Sven Giegold, one of the staunchest critics of the EU’s trade
agenda, called the Walloon CETA drama “an unpleasant hurdle for
Europe’s ability to act,” noting that “regional parliaments
must not block the Council” on trade deals.
By contrast, Hélène
Ryckmans, a member of the Ecolo political group in the Walloon
parliament, insisted that the EU’s trade policy needed to be
reformed in a way that included regional powers, no matter how small.
“The question is
how do we define the mandate of the European Commission in a
democracy. Do we give them exclusive powers or do we come back to
national parliaments, which are democratically elected? Only then
will we have something better,” she said. “We need to reconnect
in Europe with our citizens, producers and agricultural workers.”
“We need to take
another look at trade negotiations, but not necessarily in the
direction of the German proposition,” she added, referring to the
positions of Caspary and Weber.
Legal gremlins
Revamping EU trade
policy will, however, trigger a host of legal problems.
Last week, Germany’s
Constitutional Court decided that it would be illegal if a country
was unable to pull out of a provisional trade deal at any time. Even
if the EU does ultimately sign up to CETA, it can still be unwound if
a national parliament votes against it.
“Even if the focus
is on the political decision of the Walloons, the most serious legal
challenge comes from the decision of the German Constitutional
Court,” said André Sapir, a senior fellow at the Bruegel think
tank in Brussels.
“This case is of
immense importance for the signing, provisional application and
conclusion of EU trade agreements” — David Kleimann, trade lawyer
from the European University Institute
He explained that
the court decision effectively allows Germany to sign CETA in the
European Council but does not answer the overarching issue of whether
or not the Bundestag, or any other parliament in Europe for that
matter, could prevent the deal by choosing not to ratify the text.
Hosuk Lee-Makiyama,
director of the European Centre for International Political Economy,
said the idea of splitting trade competencies between the EU and
member countries was unfeasible as carving out a part of the
agreement would give the European Commission less leverage in trade
talks.
“Who would offer
concessions to us [in a trade negotiation] with the risk of only one
part passing ratification,” Lee-Makiyama said.
In determining which
parts of the EU’s trade talks fall under member-country competency
and which fall under the EU’s competence, all eyes are currently
fixed on a decision — due shortly — from the European Court of
Justice on which parts of the EU’s free trade deal with Singapore
should be seen as a mixed agreement.
German European
People's Party (EPP) chairman Manfred Weber
Manfred Weber is a
proponent of a two-track | Gerard Julien/AFP via Getty images
In September, the
court held a public hearing on the case. In the coming weeks, an
opinion by ECJ advocate-general Eleanor Sharpston is expected, which
should shed light on the court’s thinking ahead of a ruling next
spring.
“This case is of
immense importance for the signing, provisional application and
conclusion of EU trade agreements,” said David Kleimann, a trade
lawyer from the European University Institute.
“The Singapore
deal is very similar to the Canada agreement, and the ruling will be
a precedent for all other EU trade deals, too,” he said.
Guillaume Van der
Loo from the Centre for European Policy Studies agreed that the court
case on the Singapore free trade deal would be decisive in shaping
the future of EU trade policy.
“The common
commercial policy was, since the beginning, designed as an exclusive
competency,” he said, adding that the EU treaties were designed to
avoid the problem that one single player could block agreements “for
domestic reasons unrelated to trade, or to use its veto as a
bargaining chip in other negotiations.”
In recent years,
however, Van der Loo said EU countries were trying “to get their
foot in the door and have an increased say on trade competencies.”
Additional reporting
by Florian Eder
Authors:
Hans von der
Burchard , Simon Marks and Alberto Mucci
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