24 Oktober 2016

European vetocracy? How to overcome the Wallonian CETA problem

If it were possible to transduce political energy into thermal energy, then CETA would have considerably heated large parts of EU-Europe within the past two years. After the latest events, Wallonia would probably be able to grow bananas.

All this political energy, the thousands of hours of negotiation with Canada and about Canada, at political party conventions, in Parliament, before the Federal Constitutional Court – all in vain?

Well, this is what democracy is all about, opponents of CETA and globalization now announce. The latter can hardly believe their luck that at the eleventh hour and for intra-Belgian and only distantly related reasons – arguably only for the sake of a regional politician’s ambitions -, the invidious CETA seems about to fold. What is overlooked is that this uncompromising veto position of a regional group could potentially oppose pretty much any agreement, including the ones for the protection of the environment, of the consumer or even of human rights.

Democracy, therefore, is not the issue here. Rather, the CETA/Wallonia issue is a vivid demonstration of overfederalization that leaves not only Belgium but the entire European Union unable to act. A minority rules the majority and the result is humiliation, the disgrace of the European project within and without. Anyone who still does not feel at least slightly concerned because of this development has clearly failed to understand the significance of European Integration for a peaceful side-by-side in Europe.

What, then, is the problem? Once more, and as so often in the CETA debate, those inclined to oversimplify the situation are the quickest to announce their superficial analysis of the situation. To design CETA as a mixed agreement was already a mistake, some people tell us now: People should have listened to the Commission which wisely advocated an EU-only agreement until July 2016.

A more short-sighted approach is hardly imaginable. After all, we are not dealing solely with a political question that can be decided either way. CETA includes areas that fall outside the EU’s competences. This is why the agreement is a mixed one in which Member States come in as additional public international law parties to the agreement, filling in the gaps regarding competences.

Beyond that, I still believe that there are also sound political reasons for a mixed agreement. There is an intrinsic value to Member State participation. The legitimacy provided by the European level is not (yet) sufficient to carry an agreement such as CETA, once critical discussions have started. The European Commission has completely underestimated this issue. Meanwhile, the Free Trade Agreement with South Korea, essentially very similar to CETA, has entered into force without any complaints – one of the many irrational elements in this whole thing.

Still: the intense debate in the past months caused by the involvement of the Member States (mixed agreement) has in the end led to a significant improvement of various parts of the agreement with Canada. In this view, CETA was on a good track to becoming an example of an, albeit cumbersome, also intensive and ultimately successful multilevel democratic process. Until the Wallonians came, that is.

The moment when striving for improvement turns into a logjam marks the end of the democratic process and the intrinsic democratic value of the multilevel process evaporates. Wallonia does not provide any additional arguments against CETA that are regionally specific or that have not yet been sufficiently discussed and actually been rendered insubstantial through explanations and clarifications.

CETA without Belgium

There is, however, still a solution should Wallonia refuse to relent.

Why not simply close the agreement without Belgium? CETA as a mixed agreement between Canada, the European Union and 27 out of 28 Member States.

Nowhere is it written that mixed agreements need to be signed by all member states. An example: if the EU wanted to conclude an agreement with a third country on services in close proximity to the beach, and if there were gaps in the EU’s competences, it would be thinkable and indeed plausible to involve only those Member States that actually have a beach.

CETA without Belgium: in technical terms, this could easily be implemented. As yet, this does not even concern the entry into force but the signature of the agreement. In the opening lines, one would have to cross out “Kingdom of Belgium” and elaborate in Article 1.1 CETA that “Member States” in the context of CETA refers to those Member States of the EU who participate in the agreement. The passages concerning Belgium would have to be removed from the annex and shelved for Belgium’s potential future accession. In Article 30.10 CETA concerning a possible future EU Member State joining CETA, a sentence on the future accession of a current Member State could be added.

Didn’t the Wallonians say – after 6 years of negotiations – that they need “more time”? Well, they would have all the time in the world. They could sort things out and join CETA in 6 months or 6 years. But the majority could move on. Sounds quite democratic.

Those parts of CETA within the competences of the Member States would then not apply to Belgium. The parts within the competences of the EU, however, would. Since the major part of CETA – quantitatively as well as qualitatively speaking – is within the competences of the Union, the practical consequences of such an arrangement would be limited. A precondition would of course be Canada’s consent to such an unusual construct.

In the end, this would only mirror that, on the European level, the by far more important European part of CETA can be decided on in the Council of Ministers by qualified majority. Here, Member States do not have a veto. Correspondingly, Belgium could be outvoted in the Council.

This solution is not some kind of magic formula solving once and for all the strenuous search for capacity to act in the context of the EU common commercial policy. It can only be ultima ratio. The debates surrounding these agreements, the negotiations within the Union and the search for a common ground would thus continue.

But, to quote Joseph Weiler’s famous formula, all this deliberating, debating and searching for compromise would take place “under the shadow of the vote“, and no longer “under the shadow of the veto“.

European democracy instead of European vetocracy.

The author is counsel to the German Federal government in the CETA-case pending at the German Constitutional Court. He expresses solely his personal opinion here.


SUGGESTED CITATION  Mayer, Franz C.: European vetocracy? How to overcome the Wallonian CETA problem, VerfBlog, 2016/10/24, https://verfassungsblog.de/european-vetocracy-how-to-overcome-the-wallonian-ceta-problem/, DOI: 10.17176/20161025-091644.

16 Comments

  1. Paolo Sandro Di 25 Okt 2016 at 00:32 - Reply

    Shall we assume that the author of the piece supports the CETA, and in particular its ISDS framework?

    In the meantime, some support for Wallonia coming from our colleagues in Canada: https://gusvanharten.files.wordpress.com/2016/10/canadian-academics-open-letter-on-the-ceta-and-wallonia.pdf

  2. A. Berger Di 25 Okt 2016 at 13:22 - Reply

    So convincing! Instead of the people having a say in what is being imposed over their heads (that’s called democracy, by the way, but this is – as we’ve just learned – not the issue here), let us instead do without them. Because, of course, we – the self-empowered and publicly funded ‚elite‘ – know much better what’s good for the people than the people could ever know themselves. So bring on the centralized European government, ruling with an iron fist, we are ‚overfederalized‘, don’t you know!?

    I do wonder how the hell it is possible to hold a professorship in public law while at the same time promoting tyranny on a European scale.
    p.s.: Who is funding this website? The EU? George Soros?

  3. Franz Mayer Di 25 Okt 2016 at 14:40 - Reply

    @ Berger, apparently an expert in public law: Relax. Where exactly is the majority as far as CETA is concerned in the EU right now, in Wallonia? Obviously not. It’s a tiny minority ruling an overwhelming majority od citizens and Member States. Not exactly the definition of democracy.

  4. schorsch Di 25 Okt 2016 at 14:52 - Reply

    @Berger: Being a German citizen and CETA supporter I was in fact counting on my representatives in Strasbourg and Berlin to consent to CETA. Would you be so kind to explain to me how Wallonia vetoing the agreement had anything to do with me „having a say“?

  5. Paolo Sandro Di 25 Okt 2016 at 18:00 - Reply

    Hi Franz, thanks for claryfing for the readership that you are a ‚CETA supporter‘, as this provides necessary background (I think) to the opinion you expressed in this piece. I would be even more grateful if you clarify your position also on the ISDS framework that the CETA would introduce, i.e. whether you do (or don’t) share the concerns of those (like in the open letter I’ve linked in my previous post) who show how these types of DS mechanisms impact on national sovereignty and on the capacity of national governments to regulate in such areas like health and safety, environment, labour, and so forth.
    I am particularly curious to your position as a German national and constitutional scholar, also given the BVerfG’s track-record (of course I am thinking here to the Solange saga) in defending a core nucleus of fundamental rights in the German Basic Law against any type of potential ‚overrun’in a pejorative sense by an external body, be it adjudicative or not.

    I would also like to point out what seems to be a problem in your answer above to @Berger (and in your overall reasoning to be honest), namely where you say that a ‚tiny minority‘ is ruling an ‚overwhelming majority of citizens and Member States‘. Besides pointing out that you seem to have a fairly absolutist view of democracy (in which the minority must eventually ’suck it up‘, no matter how reasonable their objections), I don’t see how you can claim anything of the sort. In fact, no citizen has so far having had the opportuniy – and might actually never get it – to vote on the CETA agreement. So on which basis do you claim that a ‚tiny minority‘ is ruling ‚an overwhelming majority of citizens‘? Unless you are committing the ‚representative fallacy‘ in which you equate the will of the represented with the will of their representative – but that would be odd, as 1) you clearly distinguish instead between the Wallonian parliament and its constituents in the piece and 2) no parliament, besides the Wallonian one, has actually had the opportunity to vote on the agreement yet (to my knowledge, but I might be wrong) – I can’t possibly figure out on which basis you can claim such thing.
    Indeed, it could be argued that, contrary to your reasoning, from a democratic point of view it is way more legitimate the point of view expressed by a regional, federal parliament like the Wallonian one (arguably much closer to the perspective of its constituents) vis-a-vis the fundamentally a-democratic position of the EU Commission, which as we all know represents only the ‚interest of the EU as whole‘. Or not?
    Thanks, Paolo

  6. Xyz Di 25 Okt 2016 at 18:34 - Reply

    I don’t see how signing CETA without Belgium could work in practice. Canadian firms could simply import goods and services to any of the other 27 Member States and then export it from there to Belgium. The four freedoms and the principle of mutual recognition would bar Belgium from prohibiting such imports. Thus, de facto Belgium would be forced to accept the free trade of CETA even with regards to its own territory; without ever agreeing to its ratification.

    I further believe that arguments made against the position of Wallonia based on notions of democracy are misguided. Of course, in a democracy, it would be wrong for Wallonia to block an agreement if a majority of the members of the democratic society agree to it. Since democracy means that the majority rules, Wallonia would have to accept the will of said majority.

    But, at least in the opinion of Franz Mayer, CETA is a mixed agreement, which means that it relates to matters that fall within the exclusive competencies of the Member States. With regards to these matters, Belgium never agreed to enter into a process of democratic decision-making with the other Member States on a European level. It never agreed to accept majority rule. Whatever democracy means, it – and I think that is undisputed – does not entail a right of the EU to force upon Belgium a democratic process that it never agreed to. This would equate to a vertical transfer of sovereignty from Belgium to the EU.

  7. Yes we trade! Di 25 Okt 2016 at 20:14 - Reply

    Is it so difficult to understand or are so many people not reading the stuff they comment on? CETA without Belgium is totally possible with regard to the internal market aspekts of goods and services, as this is an exclusive EU competence under Art. 207 TFEU anyway. We are talking about those areas of CETA (if any) which could fall into the EXCLUSIVE competence of the Member States, e.g. maritime transports (easy carve out for Belgian ports and sailors), portfolio investments (FDI is EU competence exclusive – a bit more difficult but possible to imagine with a „insofar as the investor holds more than 10% of the company“ etc.), labour standards (totally irrelevant with a view to Belgian workers, I guess, since they benefit from EU law anyway and equally totally irrelevant when it comes to Canadian workers – does anybody care that Belgian couldn’t launch State-to-State arbitration about that against Canada: NO!…

    So once again: customs duties, TBT+, SPS+, IPRs (TRIPs+), that is ALL EU-EXCLUSIVE ANYWAY. And for much of the rest, the CJEU will probably find at least shared external competences on the part of the EU in the EUSFTA opinion next year, on the basis of Art. 216(2) TFEU (in particular on portfolio). Why: since the CFEU cares about the objectives of the Treaty reform of Lisbon: making the EU more effective and more manageable on the international arena. Read the Laeken declaration. To sum up: I don’t believe that CETA has to be mixed, though you can conclude such agreements if you like as EU, but the reasons are purely political, not legal requirements. And if the Court doesn’t say so next year, the Member States will have to go back to the drafting table of an IGC – once again – to undo what they have inflicted upon the effectiveness of the CCP by their „we didn’t know what it meant when we signed Lisobn“- nonsense.

  8. Franz Mayer Mi 26 Okt 2016 at 04:55 - Reply

    Thanks for spelling that out.
    I still don’t agree on the final part of what you say: „I don’t believe that CETA has to be mixed“.
    Well, if we have elements in, say, maritime transports, that are still in the realm of Member State competence, the EU cannot conclude a public international law treaty. Thus the mixity. But these elements are just a minor part of CETA. In practice that would mean that Belgium would not be bound by CETA in some minor aspects of maritime port services for example.

  9. Yes we trade! Mi 26 Okt 2016 at 07:02 - Reply

    Dear Franz, we don’t agree on this point, as we both know ;-)… still, it needs to be stressed that only exclusive MS competences could have that effect, not merely shared ones…

  10. Michael Mi 26 Okt 2016 at 08:41 - Reply

    Grow bananas, bla bla. Not one comment on what Wallonia is not liking about the CETA, or on the ‚why‘ of their disapproval. You are using the usual ‚keep to the deadline argument‘. Or our Canadian partner might cry. If the Ceta is so good, why don’t you list some counterarguments? Always emotions, never relevant information. Not a word about ISDS, which is a main point of discussion.

  11. Yes we trade! Mi 26 Okt 2016 at 10:02 - Reply

    @Michael: If we talk competences and procedures, we do not necessarily have to talk about substance, obviously. So ISDS is such a big thing for the Walloons? So, how happens that the ICSID database displays 100 BITs for Belgium-Luxembourg? Just guessing: None of them as balanced as the CETA Investment chapter, but most of them with ISDS clauses. Go and check yourself at https://icsid.worldbank.org/apps/ICSIDWEB/resources/Pages/BITDetails.aspx?state=ST179. Have the Walloons discovered their dislike to protection of investments just very recently? Are they going to terminate Protocol No. 1 to the ECHR as well?

  12. Timo Mi 26 Okt 2016 at 12:33 - Reply

    I agree the general „ISDS is bad because it can be used against regulatory policies“ argument is flawed because the ECHR (or Art. 1 of the first Protocol, for these ends) also provides for a tool against certain regulatory decisions. But aren’t there two fundamental differences? First, the ECtHR is open to everyone, not just foreign enterprises (except for the reference to „general principles of international law“, which does not apply to citizens of the respective country, IIRC). Second, human rights judges have different perceptions/juridical opinions/world views than part-time judges/lawyers in ISDS bodies. Fair enough, the second point is not an argument against CETA per se, especially since it provides some changes here, but while I think the ECHR comparison is catchy, I’m not sure it holds water.

  13. Paolo Sandro Mi 26 Okt 2016 at 16:25 - Reply

    I had written a longer comment to prof Mayer’s first replies yesterday, but it clearly got lost after I’ve pressed ’submit‘ (Max?).
    The two main points were:
    1) Pressing Prof Mayer to clarify his position on the ISDS framework of the CETA – and in particular in light of the evidence from Canadian scholars of the effect of these arbitration regimes in terms of national sovereignty and the capacity of national governments to initiate and execute policy; and
    2) on which basis does he claim that [referring to the Wallonia Parliament’s vote] ‚It’s a tiny minority ruling an overwhelming majority of citizens and Member States.’To my knowledge, this statement is simply false: unless Prof Mayer committs the so-called ‚representative fallacy‘ by which he confuses the will of the represented with those representing them, no citizen in Europe has ever had the opportunity to vote on the CETA – nor have representatives for what it matters. So how can he claim that a tiny minority rules the vast majority of people and states (also considering that the EU Commission, as we all know, does not act in the interest of the single MS but only of that of the EU as a whole)? If anything, one could argue that being the Wallonian parliament a regional one, he has way more democratic ‚purchase‘ than the EU commission, no?

  14. Marc Herman Mi 26 Okt 2016 at 18:02 - Reply

    When in a democratic regime for fear of interference of elites or special interest groups, a tyranny of one’s own minority is established, intent on debilitating the political process by declaring the people good and the magistrate corruptible, the only thing this has in common with democracy is a semblance of it.

  15. Marc Herman Mi 26 Okt 2016 at 18:30 - Reply

    The idea of the EU ratifying CETA without Belgium, giving it 6 weeks, months, years—whatever—to solve its problems, is something that would come as no surprise to us, Belgians. Having elevated the art of the obstruction within our political system to surreal levels of genius, we understand all too well what that means.

  16. Dreyer Mi 26 Okt 2016 at 22:03 - Reply

    Interesting suggestions. But wouldn’t that open a Pandora’s box? A race to opt-outs, and partners not getting what they want from specific member states? Doesn’t this reduce the value of the deal? And do we need so much multilevel government? Not rather clearer divisions of labour, with their respective democratic processes?

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