The European Union has added trade agreements with South America and India to its growing list of deals. Here’s how Brussels negotiates its commercial partnerships.
One of the main powers delegated by national governments to the European Commission is a mandate to negotiate on their behalf with non-EU countries on trade matters.
The idea is that a single voice representing the single market is needed so that individual vested interests do not hijack the negotiation process.
When countries join the European Union, they forgo the right to broker their own bilateral deals with other nations. This is a fact that is often misunderstood wilfully or otherwise by a lot of political commentators and leaders.
It was a major talking point before and during the Brexit negotiations. Those in favour of leaving the EU talked up the benefits of being able to broker tailor-made deals with other countries, rather than being lumped in with the other 27 countries.
Critics of this point of view simply pointed out that negotiating as a single country, rather than as a bloc, reduces bargaining power significantly and will inevitably result in poorer and less attractive terms.
During the Brexit talks as well, it was up to the European Commission to negotiate on behalf of the other members on the future EU-UK relationship. Attempts by the UK to talk bilaterally with some more sympathetic governments were always shut down.
In recent months, the EU trade team has been busier than ever. Brussels and Washington signed an agreement back in July, which the European Parliament has put on hold because of US President Donald Trump’s tariff rhetoric and the Greenland issue.
Lawmakers will perhaps decide next week whether to unfreeze those talks, which EU capitals have said should now resume following Trump’s rowing back of his threats.
Commerce deals get really tricky because the need for unanimous support has scuppered efforts in the past to sign trade deals with big trading partners like the US. The ultimately doomed Transatlantic Trade and Investment Partnership (TTIP) failed to get off the launchpad in part because of this.
The trade deal with Canada, known as CETA, only fairly recently got the final nod of approval after further talks were held.
It was during the CETA saga that Wallonia was thrust into the global spotlight, as the Belgian political system grants a say to each of its constituent parliaments on commercial deals. Wallonia decided to vote against CETA, holding up the process for years.
Recently, a 25-year-long effort by EU negotiators to finalise a trade deal with the South American Mercosur bloc finally looked to be paying off.
To navigate the veto threat, the Commission split the political and economic parts of the agreement into two parts, meaning it could pass with just a qualified majority.
The European Parliament disputed this process though and has asked the European Court of Justice for its legal opinion, delaying its full entry into force potentially for years. The Commission could opt though to apply the deal provisionally.
It took nearly the same amount of time for the EU and India to agree on trade terms but that particular agreement, brokered this week, should be less problematic, as it does not contain the same contentious farming-linked provisions as Mercosur.
That is not to say that the Parliament will not decide to hold up ratification again, especially if enough lawmakers decide that the human and social rights elements of the agreement are not robust enough for their liking.
