In the wake of Wallonia’s resistance to the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada, concerns have been raised over the ability of such a region to block a future trade deal between the UK and the EU.
Such concerns are understandable and it would be ill-advised not to take a closer look at the foundations of one of the hallmarks of EU external relations law – the practice of mixed agreements – and prepare for a situation in which indeed each Member State, including countries such as Spain, Poland, and Belgium will have to ratify a future trade deal. I will argue, however, that there are aspects of EU treaty-making practice that may make this process less problematic than it seems.
Wallonia: what really happened
In the autumn of last year Wallonia’s resistance to CETA resulted in Belgium’s initial inability to sign the deal. This was widely and erroneously seen as a last minute stunt by Wallonia’s Prime Minister Magnette for electoral gain. In reality, however, the Walloon parliament had adopted a resolution on the agreement (one of the first parliaments to do so) six months earlier setting out a few moderate demands in exchange for Wallonia’s consent to Belgium’s signature. The first demand, for instance, was that CETA’s Investment Court System would be legally checked by the European Court of Justice via a request for an Opinion pursuant article 218 (11) TFEU. These demands were initially unwisely ignored by both the federal government and the Commission resulting in the delay for a few days of the signature of the agreement.
The EU’s constitutional principle of conferral
The reason that Wallonia had a say in CETA has to do with the constitutional particularities of both Belgium and the EU. For reasons of space, I will discuss the EU only. The EU’s key constitutional principle of conferral requires that the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. This principle applies to the EU not only internally, but crucially also externally. As a result, the EU is legally not in the position to conclude an international agreement if even the tiniest fraction of the agreement covers an area for which the EU has no competence. The practical solution to this problem is that the EU Member States ‘help’ the EU by filling in this gap in competence and conclude the agreement for those areas.
To add a layer of complexity, in areas where competences between the EU and the Member States are shared, the EU (via the Council) often elects to only exercise part of its competence in order to ensure that the Member States can be part of the agreement as well. This is done to ensure visibility of the Member States on the international scene, to reassure third parties, and to avoid complex battles over competence between the EU and the Member States.
While the common commercial policy (CCP) is an EU exclusive competence, the scope of that competence has been subject to decades-long extensive litigation and Treaty change. In general, the scope of the CCP has gradually expanded over the years. However, the Commission is currently pursuing a policy of negotiating ‘deep and comprehensive’ trade agreements that cover areas that go beyond the areas covered by the CCP. Whether or not the EU is required or has the option to resort to mixed agreements is currently the subject of Opinion 2/15, a judgment of the European Court of Justice that is expected on May 16.
An additional point of contention not linked to mixity is whether the Council will have to vote by unanimity or qualified majority voting when concluding an agreement on behalf of the EU. Again, this outcome depends on the content of the agreement (article 218 (6) TFEU).
Dealing with mixity and unanimity
All of this means that before a deal is reached it is difficult to say whether such a deal requires Member State ratification, or even unanimity in the Council. A blockade of a future deal by one Member State or even a region, therefore, very much remains a legal possibility until the exact content of the agreement is known. Of course, negotiators can steer clear from areas that are not EU exclusive competence, but that is not always practical or politically desirable.
In the end, therefore, it would be wise to take the interests of all Member States seriously in the negotiations and not to unnecessarily cross any red lines that may be drawn at Member State level.
While this might sound like a daunting prospect, the EU has successfully resorted to mixed agreements for decades. It is considered to be a hallmark of EU law, and indeed there are only a handful of trade agreements that the EU has concluded on its own. Moreover, the EU generally provisionally applies vast parts of trade deals pending ratification at Member State level. Even if there is resistance to an agreement at Member State level there is always room for compromise in the end. Not only did Wallonia give its consent to a Belgian signature after a few days of negotiations, CETA is likely to be provisionally applied in the coming months.
 The resolution was adopted less than two months after the legally revised text of CETA was published on the Commission’s website, the text of the resolution can be found here: http://nautilus.parlement-wallon.be/Archives/2015_2016/RES/212_4.pdf
 Article 5 (2) TEU
 The most obvious example is that an agreement such as CETA also covers investment protection, whereas the CCP does not encompass the regulation of portfolio investment.
 In short, in most cases it is the Commission who negotiates and the Council who takes the decision to conclude an agreement with the consent of the European Parliament.