Wallonia and the Comprehensive Economic and Trade Agreement

By Steve Simmons

Background

On October 30, the European Union (EU) and Canada signed the Comprehensive Economic and Trade Agreement (CETA).[1]  CETA is a free trade agreement between the EU and Canada, and is considered by some to be a precursor towards the Transatlantic Trade and Investment Partnership (TTIP), a free trade agreement between the EU and the United States, as well as a possible model for the United Kingdom if Brexit is completed.[2]  The agreement had been in the pipeline for over seven years, but found itself nearly derailed, on October 14, by opposition from Wallonia, a French-speaking region spanning half of Belgium.[3] While Wallonia itself has now supports CETA, after a four-page amendment to CETA was added in compromise, it is still noteworthy that a region of an EU member state could exercise veto power over an intergovernmental association and extract concessions in doing so.[4]

Law

There are actually two sets of laws at play in giving the Walloons a chance to block CETA. First, the European Union allowed each member-state to veto the agreement.[5] Second, Belgium’s process of treaty ratification required seven legislative bodies to agree to the measure, opening the door for the Walloon veto.[6]

The European Union can choose whether to undergo a one-stage or multi-stage treaty agreement process in concluding treaties.[7] The one-stage process just involves the negotiating parties coming to an agreement, while the multi-stage process requires every member state in the EU to agree to the text of a treaty before it is signed.[8] Treaties in which the EU has exclusive competence, under the Articles 2-6 of the Treaty on the functioning of the European Union, can be signed after following the one-stage process, but treaties in which the EU has shared competence or lower must be approved by the EU member states. The European Commission, the executive body of the EU, for reasons of political expediency decided to treat CETA as a treaty where the EU has shared competence, opening the door for Wallonia’s veto.[9]

Belgium’s laws for enacting treaties can be labyrinthine. To conclude a treaty, the treaty must be signed either by the King of Belgium, for federal treaties, or the head of government of a Community or Region, for regional treaties.[10] If the treaty is federal, the treaty also must be approved by the Belgian House of Representatives and Senate.[11]  A regional treaty must be approved by the legislative bodies of the region.[12] If the treaty is both federal and regional, then the treaty must be approved by all of the legislative bodies involved.[13] Therefore, in Belgium treaties might have to be approved by seven different legislative bodies, each with their own goals and constituencies. This makes approval of treaties much more time-consuming.  In the case of CETA, the Belgian government treated the treaty as mixed federal and regional, requiring the approval of every federal and regional legislative body to go forward.[14] 

Legal Analysis

The EU’s multi-stage approach for the conclusion of treaties provides each member-state with a chance to bring a treaty back to negotiations or, in extreme cases, provides member states a veto power even before the ratification process. Here, the process has been shown even more unwieldy by the treaty concluding process of Belgium, which essentially gives each region of the nation veto power over EU treaties. While not every EU member state has such a decentralized treaty-ratification structure as Belgium, each entity within a member state with ability to conclude a treaty also has this same veto-power. Without restructuring the way it concludes treaties, the EU therefore can find itself continuing to face vetoes from regions of Belgium or the EU’s own member states.  A change in the treaty-making mechanisms of the EU seems unlikely however, as the EU was forced to negotiate and make concessions from Wallonia. Belgium also will likely maintain its treaty-ratification process, as the regional legislative bodies of Belgium will likely want to preserve their veto-privileges into the future.

Conclusion

Even though CETA has now been signed, Wallonia’s ability to veto the treaty is troubling. Without delving into the general advisability of free trade agreements, allowing a region of a member state to exercise veto power illustrates a major flaw within the decentralized structure of the EU. Unless there is some change to the way the EU or Belgium concludes its treaties, Wallonia (and the other regions of Belgium) has the ability to derail treaties approved by all of the EU member states. In order to operate more effectively, the EU needs to reorganize its treaty conclusion process to limit treaty vetoes to member states only, not regions within.

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[1] EU-Canada Comprehensive Economic and Trade Agreement (CETA) - Trade - European Commission, European Commission, (Nov. 4, 2016), http://ec.europa.eu/trade/policy/in-focus/ceta/.

[2] Wallonia is adamantly blocking the EU’s trade deal with Canada, The Economist (Oct, 22, 2016) http://www.economist.com/news/europe/21709060-tiny-region-belgium-opposes-trade-reasons-are-hard-understand-wallonia; Belgium Walloons block key EU Ceta trade deal with Canada, BBC, (Oct. 24, 2016), http://www.bbc.com/news/world-europe-37749236; Brexit Court Defeat for UK government, BBC, (Nov. 3, 2016) http://www.bbc.com/news/uk-politics-37857785.

[3] BBC Walloons Block CETA, supra note 2.

[4] Jennifer Rankin, Belgian politicians drop opposition to EU-Canada trade deal, The Guardian (Oct. 27, 2016) https://www.theguardian.com/world/2016/oct/27/belgium-reaches-deal-with-wallonia-over-eu-canada-trade-agreement.

[5] BBC Walloons Block CETA, supra note 2.

[6] BBC Walloons Block CETA, supra note 2.

[7] Anna Eschbach, The Ratification Process in EU Member States: A presentation with particular consideration of the TTIP and CETA free trade agreements, http://ttip2016.eu/files/content/docs/Full%20documents/Eschbach_Ratification-TTIP-CETA-in-EU-MS.pdf (author incorrectly concludes that Belgium would not require regional and community acceptance of CETA).

[8] Id.

[9] European Commission proposes signature and conclusion of EU-Canada trade deal, European Commission, (Jul. 5, 2016) http://europa.eu/rapid/press-release_IP-16-2371_en.htm.

[10] Conclusion of Treaties, Kingdom of Belgium Foreign Affairs, Foreign Trade and Development Cooperation (Accessed Nov. 5, 2016) http://diplomatie.belgium.be/en/treaties/conclusion_of_treaties.

[11] Id.

[12] Id.

[13] Id.

[14] BBC Walloons Block CETA, supra note 2.