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Get your act together on trade, EU tells Belgium

Get your act together on trade, EU tells Belgium

by host

The European Union wants Belgium to get a move on and ratify trade deals that are going stale. But, as so often with the country that hosts the EU institutions, its messy domestic politics are getting in the way.

The Commission is putting pressure on the governments of Brussels and Wallonia to ratify deals with Central America and the Andean countries struck the better part of a decade ago, several Belgian and EU officials told POLITICO. 

Belgium is the only country still blocking the two agreements. The deal with the Central American countries lacks the consent of French-speaking Wallonia, while Brussels still has to sign off on the other one with Colombia, Peru and Ecuador. 

Both are stuck over similar environmental and social concerns, and these disagreements carry weight, as the regions have the final word on trade policy. To be able to sign off on some deals at the national level, the government needs all regions to be on board. 

While the EU has grand plans when it comes to diversifying its trading relationships away from China and Russia, the holdup is causing flashbacks to the drama over the EU-Canada deal in 2016, when Wallonia held up the process for months.

On top of that, the bloc is struggling to develop a response to the U.S. Inflation Reduction Act, a controversial $369 billion green-subsidy package that leaders fear will suck investments away from Europe. 

“The pressure is becoming higher because of the IRA and the need for diversification,” said a Belgian national official. 

But Wallonia and Brussels are proving to be tough nuts to crack for the EU’s executive branch.

On the one hand, Wallonia and Brussels, both led by the Socialist Party and the Greens, are known to be protectionist and want trade agreements to meet strict environmental and human rights standards, as laid out in their governmental agreements.

Up north, Flanders is led by the Flemish right-wing nationalists, who consider trade deals a path to prosperity.

The “social, environmental and climate standards contained in the trade agreements concluded by the European Union should be binding and enforceable,” said Elio Di Rupo, the Socialist minister-president of Wallonia, in a letter sent to Commission President Ursula von der Leyen and seen by POLITICO. 

Di Rupo recognized however that the sustainability commitments put forward by the Commission last June are encouraging, and therefore called for a “meeting [to] be organized quickly between our respective teams in order to discuss actions and firm commitments that would allow us to move towards the ratification” of the deal, which was signed in 2012.

A spokesperson for the Commission said that it will “reply in due time” to Di Rupo’s letter.

Hurry up

The delay is a thorn in the Commission’s side, and it’s getting impatient. 

In a letter sent to the Brussels government in January, the EU’s trade chief Valdis Dombrovskis highlighted how Belgian exports are profiting from the agreement with the Andean countries, provisionally applied for about 10 years.

Dombrovskis also stressed the Commission’s focus on assuaging human rights and environmental concerns.

“I sincerely hope that these clarifications and concrete commitments, jointly with the technical discussions that took place in the previous months, will allow this file to progress,” he wrote in his letter, obtained by POLITICO.

The EU’s foreign affairs chief Josep Borrell called out Belgium’s slow progress already last May after a visit to Central America.

But that’s not going down well with the Greens, who are leading the charge against the deal in Wallonia and Brussels. 

“The European Commission should not start believing that we are ready to lower red lines on environmental and human rights issues,” said Marie Lecocq, a Green MP in the Brussels parliament. 

Internal squabbles

Pressure isn’t only coming from the Berlaymont. The holdup is also a hard pill to swallow for fellow northern countrymen in Flanders. 

Not ratifying those deals “damages the Flemish economy,” said Philippe Muyters, from the Flemish nationalist party N-VA, which is in charge in Flanders. “For us, it’s important that as an open economy, you trade with other countries.”

Muyters also stressed the reputational damage: “We give the impression that Flanders and Belgium are reluctant on trade and investments.”

By holding up ratification, Wallonia and Brussels want to prove they are sticking to their guns on ensuring high environmental standards.

But even among themselves, Francophone parties also agree to disagree. 

Opposing free-trade deals is crucial for the PS, the Socialist party. By using protectionist arguments, the Socialists are seeking to rally support ahead of the 2024 election against their nemesis, the far-left PTB party, which is gaining traction among Walloon voters.

The Belgian national official said that “PTB, PS and Ecolo are watching each other.”

“There is a lot of nervousness,” the official added. 

Brussels’ Foreign Trade Minister Pascal Smet and Elio Di Rupo declined to comment.

Barbara Moens contributed reporting. 

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