Wallonia returns to spoil Europe’s free-trade agenda

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Belgium’s bad boys of trade are back.

With the EU currently seeking out more reliable, like-minded partners as alternatives to reduce its dependence on Russia and China, it’s likely to bump into Belgium’s messy politics once more. The last time that happened, the French-speaking southern region of Wallonia almost torpedoed the EU-Canada deal in 2016.

Those dynamics haven’t changed much since then. Wallonia, led by the Socialist Party and the Greens, is more protectionist and wants trade deals to obey strict social and environmental standards. That’s in contrast to their Dutch-speaking countrymen, the Flemish nationalists, who see free-trade deals as a way for Flanders’ economy and businesses to flourish.

This has created headaches for Belgian diplomats having to represent their country at the EU; the disagreements leave them without a position to defend. “Within Belgium, trade policy ideologically is one of the most difficult files,” said one former Belgian diplomat.

The disagreement matters because in Belgium, regions are responsible for external trade, and Wallonia’s assent is as crucial as, say, Germany’s, to getting any deal done across the bloc.  

And that’s ominous for the European Commission’s trade plans, with Brussels now pursuing a full, ambitious agenda.

The Commission hopes the European Parliament and the Council will sign off on deals with New Zealand, Chile, Mexico and potentially Australia as well as the South American bloc of Mercosur countries — all before the next European Parliament election in 2024. For Belgium, some of these deals would be up for a vote just when the country is gearing up for the presidency of the Council of the EU and its own election take place along with the European one.

In theory, the Council presidency should prompt Belgium to iron out its internal differences and present a united front. In practice, officials fear it could ruin everything.

Remember Magnette?

The official at the heart of Wallonia’s obstructionist stance is Paul Magnette, the man who became infamous in Europe and Canada for holding back their deal, known as CETA, in 2016. He is still leading the French-speaking Socialists, who are in charge in Wallonia. 

If anything, Magnette is under even more pressure now to block any future deals. Opposing free-trade deals is crucial for his party. By using protectionist arguments, the Socialists seek to rally troops against their nemesis, the far-left PTB party, which is gaining traction among Walloon voters. 

Since the CETA fallout, Wallonia has also formally written down its red lines when it comes to more sustainability in trade policy. If they don’t stick to those, Magnette and his party will be held accountable.

The European Union “demands very important things in its climate policies, and it must do the same in its trade policy,” said Laurence Capelle, a trade attaché at the general delegation of Wallonia and Brussels to the EU. 

Trade policy should not be done at any cost, Capelle added, and must respect sustainability and climate guidelines, and should forbid forced labor. It’s a line advocacy groups have also latched onto. 

“Brussels and Wallonia have clear red lines, especially when it comes to sustainable development,” said Marc Maes, who has been covering trade policy for decades at the Flemish anti-poverty NGO 11.11.11. “They look at the specific situation of partner countries and the added value of these deals. One of the reasons is the role and importance of unions in French-speaking Belgium, and in particular their link with the Parti Socialiste.”

That position hasn’t gone down well in Flanders, which relies significantly on exports.

Wallonia “is making Belgium a pariah within the EU,” said Geert Bourgeois, trade coordinator for the European Parliament’s right-wing ECR group, who was previously in charge of Flemish trade policy as minister-president of Flanders.

One former Belgian ambassador to the EU said: “Flanders and Wallonia fundamentally disagree about social-economic issues. This translates into trade policy. The CETA saga has reflected very negatively on us, especially because it’s in our economic interest to remain in a pro-trade position.”

“It has always been the case that there are different ideas about trade in the north and south,” said Ferdi De Ville, a professor of European politics at Ghent University. “It is sometimes said as a joke that the classic division between the liberal north and the protectionist south [of Europe] coincides with the Belgian language border.”

Holdups

Belgium is the only country still blocking the ratification of a trade agreement with Central American countries, signed in 2013, with Wallonia still not ratifying the deal. It is also holding up a deal with Colombia, Peru and Ecuador over similar environmental and social concerns.

This stance prompted the EU’s foreign affairs chief Josep Borrell to call out Belgium’s slow progress after a recent visit to Central America. “There is still one member state missing, Belgium, to finalize the ratification,” he said.

Wallonia believes that by holding up ratification, it is sticking to its guns on ensuring high environmental standards.

A spokesperson for Elio Di Rupo, the Socialist minister-president of Wallonia, said that Wallonia didn’t ratify the treaty with Central America because of a “lack of respect of social and environmental standards” and the “lack of assertiveness that the Commission had so far shown in monitoring the implementation by these partners of commitments on social and environmental standards.”

Any domestic push to make progress on the deals has run into a wall, say Belgian diplomats. They are skeptical of the country sorting its position out in time for its Council presidency. 

Optimists see the European Commission’s plans to make future trade deals greener as a way to get the Walloons on board with the EU’s trade policy. But it’s not clear yet how far-reaching this revamp will be in practice. 

“It’s far from being a sufficient shift of paradigm,” warned Saskia Bricmont, a Belgian Green MEP. 

More specifically, the proposal would make it possible for the EU to punish trade partners who don’t comply with the agreed environmental or labor standards. 

But the European Commission doesn’t want its rethink of trade and sustainable development chapters in trade deals to apply to past agreements, which includes the one the EU has with Mercosur — the deal that most threatens Walloons with agri-food imports like beef.

One EU Belgian official said they gave up on sorting Belgium’s problems out before the Council presidency: “This kind of sensitive issue will not be solved just before the elections. We will have to make that clear to our European partners.”

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