Being under fire already because of domestic issues, the EU has faced some tough trust related issues internationally lately. The CETA signing being the most recent one. Although the Walloons have agreed to sign the CETA with a caveat, the EU’s international prestige has been damaged with the CETA signing seemingly being hijacked by just a fraction of the EU’s population. How did this happen and what is the way forward?
Earlier this week, Tusk said there would be consequences for Europe's global position if it failed to strike a deal with Canada, "the most European country outside Europe and a close friend and ally." On Thursday 27 October Walloon premier Paul Magnette got further assurances on agricultural and legal aspects of the Comprehensive Economic and Trade Agreement (CETA) between Brussels and Ottawa, and agreed to go ahead with the signing.
Traditionally, because trade deals affect the EU as a bloc, they were regarded as the preserve of the EU collectively. This means that after being negotiated by the European Commission, the EU’s executive arm, they can then be passed in the Council of Ministers, representing the member states, under a majority rather than unanimously. If the deal covers certain issues such as cultural affairs, the vote in the Council needs to be unanimous, though in practice trade deals tend to command unanimity in any case. As the scope of trade deals broadened beyond goods tariffs to address “behind-the-border” issues such as services regulation, EU member states clamoured for the power to ratify such pacts country-by-country rather than collectively.
The Lisbon treaty, which came into operation in 2009 and amended the workings of the EU, aimed to clarify which parts of trade deals were EU-only and which required individual member state approval. Those that combine both elements are known as “mixed agreements”. In theory, if every member state decides to put them through their legislatures, there are now 38 parliaments that have a veto over mixed deals, including the Walloons. However, designating a deal as mixed is a confused process. Firstly, the legal situation is unclear: the European Court of Justice is considering whether the EU-Singapore deal is a mixed agreement, but has yet to rule. In practice, the decision has a strongly political element. In the case of CETA, member states and parliamentarians argued that the inclusion of investment and certain services provisions meant it should be a mixed agreement.
In July 2016 Cecilia Malmström, the EU’s trade commissioner, and Jean-Claude Juncker, the commission president, gave in to this pressure. Some trade policy veterans have argued that this decision was a terrible mistake that ceded control over one of the most important collective functions of the EU to the member states, making it subject to populist posturing at a national and subnational level.
The way forward
Although one can understand Juncker being sensitive to the rising tide of public opinion against globalisation and free trade, the EU should be careful not to take the route of unanimous ratification by all 28 EU parliaments when there is no legal obligation to do so. To make the EU a more reliable negotiating partner on the international stage, the commission could restrict the scope of agreements to make it easier to designate them as EU-only pacts. Another possibility, canvassed by some members of the European Parliament, would be to cut deals such as CETA into two parts, an EU-only and a member-state section, and pass them separately. This is superficially attractive but may limit Brussels’ ability to sign deep and broad agreements in future.