Friday, October 21, 2016

When both sides are right and you wish they weren't

UPDATE - since this post it looks like the issues being raised by Wallonia and subsequently another region of Belgium may have been resolved. At the time of putting in this update it is hoped to sign CETA shortly. Of course, the difficulties it faced are still very relevant to Britain as the original post below argues and those arguments largely still stand.  Am putting in a new post here with an update.

Original post follows:

You know what is the most depressing thing about the failure of CETA, the proposed trade deal between the EU and Canada, as Canada walks out of trade talks declaring a deal impossible and Brussels "incapable" after the treaty was blocked by one region of Belgium?

It's the fact that this proves BOTH the Remain side and the Leave side right about things where I'd really hoped they were wrong.

Ironically the vote by the Wallonia regional parliament in Belgium was driven by exactly the same sort of protectionist fears which some factions within the "Leave" side did their best to stir up during our own referendum and which contributed to the "Leave" win.

Nevertheless it certainly illustrates the difficulty which the Leave side's free traders pointed to during the referendum campaign - if the EU can't agree a trade deal with Canada who can it agree a trade deal with?

EU President Donald Tusk this week warned that if the Canadian deal fails then it could mean the EU will never strike another free trade treaty.

“If we are not able to convince people that trade agreements are in their interest .... I am afraid, that CETA could be our last free trade agreement,” he said.

Unfortunately this also demonstrates that one of the arguments made by the "Remain" side is likely to prove all too accurate.

When we leave the EU Britain will have to agree a new trading relationship with them. It never made any sense to suggest that the other EU countries were out to get Britain while we were inside the club but self-interest would force them to offer the UK a great deal as soon as we left.

Unfortunately the same sort of problem which has just wrecked CETA could all too easily make it difficult for Britain to get the kind of deal we need with the EU. There were people who said during the referendum that because it is overwhelmingly in the interests of German car manufacturers, French wine manufacturers, and other European commercial interests to have a fair and a sensible trade deal with Britain, the smaller countries of Europe would not dare tell Germany and France that they were blocking such a deal.

Well, it wasn't even a smaller country which just blocked CETA - it was a region of 3.5 million people within one country which has blocked a deal that all 28 national governments would have signed.

Britain cannot turn back now: we are committed by a democratic vote. But we need to be prepared for a long-haul period of hard bargaining and to make sure that the people doing the negotiating and behalf of Britain have as strong a hand as possible and are not undermined.

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