What's going on?
In a sign of how difficult it can be to conclude a deal with the European Union (EU), a seminal free trade deal between the EU and Canada is under threat because of opposition from one region in Belgium!
What does this mean?
After seven years of negotiations, a deal was provisionally made between the EU and Canada earlier this year – but it requires the approval of all 28 countries within the EU. In turn, Belgium requires all five of its regional parliaments to approve the deal. Herein lies the problem: one region is blocking the deal purportedly partly because of an impact on its farming industry. The deal isn’t dead. Some think that Walloon, the Belgian region, is wielding its veto power to gain something in domestic politics.
Why should I care?
The bigger picture: This highlights how difficult negotiating a trade deal with the EU can be.
After seven years of negotiations, one small part of Belgium is blocking an EU-wide deal. It’s a sign to everyone (including possible future EU trading partners like the US and Japan) that negotiating trade deals with the EU is not straightforward. That won’t necessarily stop countries from trying, but it’s conceivable that they might prioritize other countries or trade blocs with whom it might be easier to reach an agreement. For Brits as well as for Europeans who would like to have a trading relationship with a post-Brexit Britain, it shows how difficult it will be to negotiate a new British-EU relationship.
For you personally: Free trade is generally thought to be good for the economy – which feeds through to your wallet.
Empirical evidence suggests that free trade boosts economic growth, which (economically at least) benefits the population as a whole (that’s not to say that it benefits everyone). If the deal is approved, economists predict it will increase trade between EU and Canada by 20% and give a significant boost to both economies.