Wallonia and South-Africa fighting the same battle04/12/2016

Wallonia made the headlines recently when it temporarily blocked the signature of the Canada-EU Comprehensive Economic Trade Agreement (CETA).

Few people ignored the existence of the Wallonia region of Belgium previously, but many ignored the fact that under European and Belgian constitutional law, this so called “tiny” region had the potential to veto the signature of a treaty which was seven years of negotiation in the making.

This is because the EU can only approve a treaty if all 28 member states clear it. Since Belgium is a federal state which has gradually granted a lot of autonomy and power to its regions, namely in matters pertaining to international trade agreements, Belgium can only give its approval to an international treaty if all its regional constituents do too. This in effect means that without Wallonia’s consent, the EU could not move forward with CETA.  

Wallonia resisted huge pressure from all sides for two weeks until it won concessions for regional farming interests and, most importantly, the sidelining of the controversial “Investor-State Dispute Settlement (ISDS) provisions.  

The reason for the fierce Wallonian opposition - supported by many political parties and members of the civil societies in the whole EU and even in Canada - is that the ISDS provisions may unduly favour multinational interests and undermine the sovereignty of participating countries in the trade agreement.

Wallonia’s courageous and successful fight to oppose the signing of CETA until it won these concessions is reminiscent of the decision of the South African government to introduce the “Protection of Investment Bill’ which intends to replace bilateral investment treaties concluded with many countries. The bill will go before the National Assembly for final approval soon and attempts to bring all investors under the same legal umbrella while clarifying provisions that are too broadly or vaguely defined under the BITs. It also deals with the very same concerns of ISDS provisions, which are recurrent in most International Investment agreements and bilateral treaties.