After seven years of negotiations, the European Union and Canada were scheduled to sign the historic trade agreement this Thursday. Despite the fact that 27 of the EU’s 28 member states are willing to ratify the agreement, the pact foundered at the final hurdle, thanks to the obstruction of the Parliament of Wallonia.
Although talks did eventually bring the region on side, allowing the signing ceremony to take place on November 3, a Belgian region containing 3.5m people managed to confound a trading bloc of 510m people.
The ease with which the deal was crippled has worrying implications for the UK's negotiations with the European Union.
When the UK EU trade agreement (Beta, perhaps?) comes to the table, it is likely to be even more contentious, dealing with not only the exchange of goods and services, but the free movement of people and the passporting of banks for financial services.
And, as long as the EU holds out for unanimous ratification, constituents can hold up the deal and extort hand-outs by refusing to play ball.
While Canada made it clear that the ball was firmly in the EU’s court and that it would take a dim view of being asked to renegotiate terms that were supposedly settled to appease a region representing 0.6% of the EU’s population, it was nevertheless prepared to wait around. The financial services industry may not be so patient.
Wallonia has shown that even after seven years of negotiations, until the ink is dry, uncertainty can still rear up. One can but guess at the damage that will be done to London’s status as a financial centre if its European competencies can be decided by obscure regions of Europe.
Wallonia and its president Paul Magnette were not simply grandstanding for cash. They had sincere fears that, despite the seven year negotiations, the EU was rushing into Ceta. Nevertheless it would be naïve not to acknowledge that Ceta is an easy bargaining chip for member states to exploit to give local issues an international stage.
Sincere or not, Wallonia’s kamikaze approach to negotiation sets a precedent that should worry the UK. While the UK may be relishing the fact that it will be able to line up trade deals with countries all over the world without trekking through the mire of EU red tape, its primary trading partner is still Europe, accounting for 44.6% of UK exports in 2014, and its capacity to do business with the EU can, it seems, be hamstrung by a tiny region with an axe to grind.
It's important that minority interests are not railroaded in the service of the majority, but Wallonia's concerns should have been addressed when they first voted against the deal in April. Although the EU managed to bung Wallonia this time, by delaying a deal supported by 99.4% of the EU's population, it showed its vulnerability. We had better hope that the EU learns from the experience. If it does not, it is the UK that will suffer the consequences.