The lesson from tiny Wallonia – there is a way to prevent hard Brexit | Simon Jenkins

A TTIP and Ceta protester

‘To leftwing Walloons, the EU may be in hock to monopoly capitalism. To British “hard Brexiters” it is a Trojan horse for socialist bureaucracy and external control.’
Photograph: Emmanuel Dunand/AFP/Getty Images

The fury subsides. The wounds heal. But as the trumpets and the drums depart, the same Brexit squabbles live on. What do we mean to do, really, about immigration, protectionism, sovereignty and trade?

Cut to Wallonia, a desperate corner of Europe. Its collapsed heavy industry lies ruined in a hilly landscape. Its politics are equally outdated, socialists battling Marxists. Yet Wallonia’s politicians enjoy astonishing power, since the Belgian federation depends on allowing the province a veto on external treaties. Since the EU holds that a trade treaty with Canada requires unanimity of its 28 states, Wallonia’s veto is Belgium’s veto. Wallonia is the mouse that roars.

Those wondering what this means for Brexit should read the history of Canada’s dealings with the EU. Ten years ago, a previous deal was wrecked by Canada, not by Belgium, when Quebec dairy farmers cast a veto and left the EU’s negotiators fuming. Now it is the turn of Wallonia’s dairy farmers to call a halt.

Trade deals are the lowest form of diplomatic life. The currently abortive Canadian treaty is a glutinous mess of beef hormones, investor protection, Romanian visas, patent term regulations and cheese definitions. The EU shot itself in the foot by declaring, late in the day, that the deal was subject to member unanimity, not majority voting. Canadian lawyers find this interpretation strange to the point of suspicion. It did not apply to the Paris climate change treaty.

To leftwing Walloons, the EU may be in hock to monopoly capitalism. To British “hard Brexiters”, it is the opposite, a Trojan horse for socialist bureaucracy and external control. To the latter, the Wallonian fiasco proves only how useless the EU has become. If it wants a trade deal with post-Brexit Britain, it should set its house in order and then come cap in hand to London. Otherwise, Britain should shake hands with Canada and others round the world, and let Europe stew in its own juice.

So far, so noble. I can see Boris Johnson and Liam Fox stomping the Ardennes, arm-in-arm with Walloon Marxists in defence of plucky little Belgium. Theirs is a coalition of the last stand against the heartless armies of the EU. What a contrast with the leaders of Britain’s Wallonias, Scotland and Wales, who last week traipsed to Downing Street, pleading for Brexit mercy from Theresa May. If Wallonia could stop Europe in its tracks, what about the equally oppressed tribes of the Celtic fringe? They got a flea in the ear.

The Wallonian saga shows only the power of provincial lobbyists in ruling the terms of trade, both within and outside the EU. No one can seriously applaud the licence granted to the Walloons to shut out the Canadians. Even in Brexit Britain, leavers and remainers alike favoured free trade. Their chief argument was over “trade in what, and with whom?”

That argument at least is starting to clear. On intra-European migration, May will be forced to concede virtually an open door to bankers, doctors, care workers, fruit pickers and other businesses dependent on foreign labour. It is simply not feasible to erect visa barriers round the UK’s borders, whether along the Channel coast or around Fermanagh and Tyrone. Whatever May says, Brexit is unlikely to make much difference to migration statistics. Her leadership should start lowering expectations.

On trade in manufactured goods, the totals at stake are small, but not so for the 80% of businesses that are services and particularly affected by non-tariff barriers. While the EU market in services remains embryonic, to stay must be in Britain’s interest. Everyone wants access to markets. Everyone accepts, and May concedes, that this means give and take. Give involves a surrender of control. There is no such thing as absolute sovereignty.

In June the British voted narrowly to leave the EU. Barring a revolution, that will plainly happen. But beyond “leaving”, all is pollster conjecture. “Hard” Brexit posits some EU relationship along Canadian lines. But even if a deal with Britain may be treated as more urgent, Wallonia shows how pressure groups can damage the public interest. In Britain’s case, transitional “default to World Trade Organisation” tariffs would be costly to the economy and, on the Irish border, unenforceable.

Any Brexit cloud has a silver lining. Taking the heat out of London’s banking frenzy may be no bad thing. Devaluation can ease the strain of tariffs. Pending a storm of Wallonias – Germans on banking, the Dutch on pigs, half the EU on car assembly – ad hoc deals may be reached. But a cloud it would surely be. In the short term, there would be a net loss of business. Hence I cannot see how hard Brexit is in the nation’s interest, political or economic. The virtue of the residual European economic area (EEA) – some version of the so-called Norway option – is that it would take Britain out of the EU politically, but leave in place a common market. Trade in goods and services would remain, but at the price of their regulation, and that would have to be paid for.

Political Europe is in the process of decline, if not disintegration. As refugees, bank bailouts, recession and unemployment all testify, the EU and especially the eurozone are not a functioning confederation but a zone of German influence. Britain has decided to distance itself from that zone. It cannot divorce itself from the economy of its entire continent. Caution and common sense advise the EEA, “soft” Brexit.

Meanwhile, do not mock the Walloons. Their flexing of political muscle reflects a widespread identity crisis among all the world’s subordinate regions. From Scotland to Spain, from Ukraine to Turkey to Syria to the Gulf, the greatest threat to global stability – and its ally free trade – is sub-national separatism. The rebellion of local peoples against centralist power is everywhere.

As Brexit stumbles forward, May should read the lessons of Wallonia. She should appease the Scots and others by granting them status in her impending negotiations. She is a remainer at heart. She may welcome a Wallonian card in her hand.

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