The EU’s trade deal with Canada is on life support. The WSJ:
Until last week, few outside Belgium even knew of the existence of Wallonia, let alone that this region with a population of 3.5 million had a parliament with the power to block trade deals backed by the rest of the EU, with a combined population of 500 million.
Now Wallonia’s objections may have killed the EU’s Comprehensive Economic and Trade Agreement with Canada, which was supposed to be ratified by all 28 EU leaders and Canadian Prime Minister Justin Trudeau this week.
The EU is giving Belgium until Monday evening to decide whether it will agree to sign the deal, Belgian and EU officials said.
Failure to get approval for the Canada trade deal by the EU shows just how much trouble the free trade agenda is in worldwide. A deal between Canada and the EU is about as easy as it gets. Both are high-regulation, high-wage, green-friendly economies, and while Canada has a respectable economy it isn’t a U.S.- or China-sized threat to the European status quo. So if this deal is running into trouble, there is little reason to think that Europe will be doing any significant trade deals for a while.But besides the general erosion of support for free trade, the tragicomic spectacle of Wallonia, the French-speaking piece of tiny Belgium, disrupting a trade deal that has been exhaustively negotiated by the EU over months and years, is an indication of just how badly-constructed the European Union is. It is as if the Upper Peninsula of Michigan somehow had the power to block an international agreement for the whole United States.Europe, by the size of its economy and the size of its population, ought to be one of the world’s great powers. But the whole is less than the sum of its parts; right now, when an issue passes from the control of Europe’s nation states into the hands of the Brussels bureaucracy, Europe becomes weaker rather than stronger. Germany and France can act decisively in their own interest; the EU lacks this capacity.The main reason for that is that the EU’s member states, and their voters, don’t trust Brussels enough to do what the U.S. founding fathers did 200 years ago: entrust the federal government with enough power and decision-making ability that it can act.That might have been OK in the world of the 1990s, when history was over and no hostile great powers roamed the earth. But in today’s unhappier world, in which Putin seeks to divide Europe, Turkey has turned hostile, the Middle East has collapsed and a restless China poses growing threats to European economic success and political values, it will not do.Europeans must either make up their minds to give Brussels enough power—and to streamline its decision making processes in order to make the European Union an effective power that can act in a timely fashion—or they must begin to return power to the national level where decisions can be made and carried out.So far, Europe’s response to this problem, as to so many others that it faces, is to split the difference and fudge. It continues to bulk up EU bureaucracies even as decision making powers leak back from the EU authorities to national leaders.The Canadian trade fiasco indicates that Europe continues to muddle (though one would be hard-pressed to call this this muddling through with a straight face). The world actually needs Europe to speak in a clear and coherent voice, and needs Europe to play a major role. At the moment, Europe is unable to do this—but at least the Walloons have their say.