Ultimately, the Wallonian rejection of CETA is not just about what one regional province does in Europe. It is, perhaps, a symbol of the larger discontent with globalization. Saying no and protesting against trade agreements has become the easiest outlet for venting fear and frustration. Especially at a time of slowing global growth, this is deeply troubling. The inability of political leaders to articulate better reasons for moving ahead with trade deals is likely to have lasting consequences—for Wallonia, for Europe, for Canada, and, possibly, for us all.
Concerns over globalization are crystalizing in many developed economies in the form of opposition to trade agreements. One of the largest, the Trans-Atlantic Trade and Investment Partnership (TTIP) between the European Union and the United States, is currently in the firing line. Many commentators have now declared the entire exercise dead-on-arrival. Such a dismissal is perhaps too hasty. In spite of strong headwinds, trade officials have continued to press ahead, hoping to lock in as much progress as possible in 2016. As an earlier blog post noted, TTIP is perhaps the most difficult trade agreement attempted. Given relatively open levels of trade between the two parties, both sides are attempting to address thorny sensitive issues that have not been previously tackled and to try to sort out tough new areas of conflicting standards and regulations.
The yogurt maker—just to pick on one product that happens to be sitting near the computer today—might not have been bothered about an existing bilateral. But the same yogurt marker may care deeply about the prospects of yogurt trade in and across RCEP. Or about the potential for trade in ingredients in the region. The point is—unless someone asks—no one will know what the yogurt maker or any other company wants or needs or does not want or need from RCEP. Officials might be going 15 rounds together with one another on a point that is utterly irrelevant to companies while ignoring the real issues of concern.
This disconnect will need to be addressed. The global rule book is getting badly out of date. Current provisions do not match up well at all with the reality of how business is being done on the ground. While FTAs help, a patchwork of trade agreements is not the best way to address the needs of a dynamic sector of the economy. The WTO just announced that Argentina will host the next Ministerial round in late 2017. Member governments cannot show up a year from now and begin to put into place a few more small initiatives. It really is time for the global trade regime to get out of neutral and get back into gear.
The Trans-Pacific Partnership (TPP) agreement continues to wind its way through the 12 member countries. The attached document provides a handy status update on the domestic level processes inside each of the member states.