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One Tiny Belgian Region Blocks International Trade Deal

A banner reads "Stop CETA - it's enough" during a protest in front the Walloon parliament in Namur, Belgium, during a meeting on the EU-Canada Comprehensive Economic and Trade Agreement.
AFP/Getty Images
A banner reads "Stop CETA - it's enough" during a protest in front the Walloon parliament in Namur, Belgium, during a meeting on the EU-Canada Comprehensive Economic and Trade Agreement.

The French-speaking Belgian region called Wallonia is holding up Europe's free-trade agreement with Canada. CETA, or The Comprehensive Economic and Trade Agreement, would reduce or eliminate tariffs and make it easier for goods to move between countries, similar to NAFTA or the Trans-Pacific Partnership.

All EU governments support the deal, but in order for Belgium to go along, it has to get the approval of its five regional governments. Wallonia has objected. Canada has been negotiating with the Belgians to get a deal by next week, when a summit between Canada and the EU is planned.

This editorial from the Economist explains why Walloons find the deal objectionable:

"Coordinating standards with another country inevitably means surrendering a little sovereignty. This riles many Europeans, who worry that CETA will dilute environmental standards and labor laws; they suspect that new courts, established by the treaty to settle investor disputes with governments, will favor corporations over regulators.

"But plans for such courts have already been reformed, notes Marietje Schaake, a liberal Dutch MEP. The latest proposals make them more independent and transparent. On October 18th Cecilia Malmstrom, the EU's trade commissioner, wearily offered to add a 'plain language' declaration to clarify the deal.

"CETA has other more traditional detractors who hate the fact that it also hacks away at 99 percent of customs duties between Canada and the EU. Wallonia boasts one cow for every three humans and its lavishly subsidized farmers are wary of cheap Canadian competition. Erwin Schöpges, a Walloon dairy farmer who joined the protests outside parliament, says he already faces milk prices below his production costs. "We want to trade with Canada, but we would rather not abolish tariffs," he says."

The deal reached an impasse, as reported by the CBC, when the Canadian International Trade Minister Chrystia Freeland left talks visibly shaken.

" 'Canada worked really hard, and me personally, I worked very hard,' she said in French, expressing Canada's disappointment — as well as her own — at this turn of events.

" 'It's become evident for me, for Canada, that the European Union isn't capable now to have an international treaty even with a country that has very European values like Canada. And even with a country so nice, with a lot of patience like Canada.

" 'I've worked very, very hard, but I think it's impossible,' the minister said, reflecting on the months of travel and lobbying across Europe she's invested personally in trying to garner enough support, working in tandem with her EU trade counterpart, Cecilia Malmstrom."

As the Wall Street Journal reports, Paul Magnette, the Walloon president, briefed his parliament saying that there had been too little democratic debate over free trade and the negative impacts of globalization.

"He told Walloon lawmakers Friday he has nothing against Canada but wants to curb the power of corporations in future EU trade agreements with the U.S. and other countries.

"He acknowledged that his region's parliament got to play this role 'by chance' and said that many in Europe likely regretted granting it this power.

" 'But the moment we are given this power, it's logical we use it,' he said. While EU trade deals don't usually have to be ratified by legislatures, the commission decided in July that the 38 national and regional parliaments across the bloc should get a say on CETA. The move came in response to criticism from many European capitals, including Berlin, that the step shouldn't be decided only in Brussels, amid opposition against what critics said were opaque deals the public had no say in."

The CBC reports on concerns about what this impasse could mean.

"On Thursday, the president of the European Union, Donald Tusk, offered the blunt assessment that if this hard-fought deal with a progressive partner like Canada couldn't move ahead, the EU's credibility as a negotiator of any free trade deal in the future was in doubt. ...

" 'If the EU doesn't succeed in finalizing this economic treaty with Canada, this could mean that the [Brexit] discussions with the U.K. will also be very complex,' he said."

Reuters has this perspective on the struggle between Wallonia, with a population of 3.6 million, and Belgian Prime Minister Charles Michel, who wants the trade agreement:

"Centrist Michel, a French-speaker, and his main allies from the Flemish right, face opposition on many issues from the left-led Walloons and some observers see the CETA vote as a tactic in a campaign to maintain state spending in the struggling south."

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Sonari Glinton is a NPR Business Desk Correspondent based at our NPR West bureau. He covers the auto industry, consumer goods, and consumer behavior, as well as marketing and advertising for NPR and Planet Money.