Sunday, October 30, 2016

Wallonia Threatens to Veto the E.U.-Canada Trade Treaty: Complicating State Sovereignty in the E.U.

"The European Union and Canada signed a far-reaching trade agreement on [October 30, 2016] that commits them to opening their markets to greater competition, after overcoming a last-minute political obstacle that reflected the growing skepticism toward globalization in much of the developed world."[1] The obstacle may indeed have reflected increasing resistance at the time to globalization, but this veil can be pulled back to reveal the underlying political obstacle--that of states' rights in the E.U., taken to a crippling extreme.

Wallonia, a region in the E.U. state of Belgium "hard hit by deindustrialization" and fearing agricultural competition, had threatened to veto the treaty until the state government promised to protect the region's farmers.[2] Although the New York Times claimed at the time t5hat "the Walloon intransigence has underlined the extent to which trade has become politically radioactive as citizens increasingly blame globalization for growing disparities in wealth and living standards,"[3] I blame the extent of the remaining state-sovereignty in the E.U. Specifically, the stifling problem is that of a region of a state being able to trigger the state's veto in the European Council [of Ministers]. 

That the E.U.'s ratification of the treaty depended on a "compromise among the regions of Belgium" calling "for language to clarify the handling of trade complaints brought by Canadian and [E.U.] companies" suggests that the veto-power enjoyed by the state governments is itself problematic. In particular, the way some of the states, including Belgium, are structured political renders the veto defective. Unlike in the case of the U.S., some E.U. states are federal in governance. This alone complicates those states' veto-power at E.U. level. Crucially, the state-federalism makes it more difficult for a veto-threat to be undone, whether at the state or E.U. level. The E.U. need not be quite so hamstrung. 

Politically, the fact that even intra-state regional interests must be satisfied for the E.U. to approve a trade treaty makes such approval much less likely because in any trade agreement, some sectors will inevitably fare better than others. At worst, Walloon officials could have held out in order to get something, perhaps even bribes, That such a sordid political strategy is possible indicates that the retention of the state-veto in the E.U.'s basic law is unwise and not prudent both ethically and politically. 

In the U.S., some states can vote their economic interest contrary to a trade treaty in the U.S. Senate and not hold up approval because only a two-thirds majority is required to ratify a treaty. This voting rubric is similar to that of qualified-majority voting in the European Council--the legislative chamber that represents E.U. states. The E.U. could do worse than apply qualified-majority voting to trade treaties. 

1. James Kanter, "Canada and E.U. Sign Trade Deal, Bucking Resistance to Globalization," The New York Times, October 30, 2016.
2. Ibid.
3. Ibid.