Flemish nationalists hamstrung by Belgium’s trade fiasco

Flemish nationalists hamstrung by Belgium’s trade fiasco

They clipped the wings of Belgium’s trade policy, leaving their own government stranded.

By LAURENS CERULUS 10/20/16, 8:16 PM CET

Belgium’s fragmented politics have never triggered such an international frenzy.

Europe and Canada can but watch and wait as Belgium’s federal government wrestles to overcome resistance in the French-speaking part of the country that is threatening to sink a landmark EU trade deal with Ottawa.

If Belgium cannot sign, the entire accord is liable to collapse, unraveling seven years of painstaking diplomacy between the European Commission and Ottawa. In contrast to the Walloons, the Dutch-speaking Flemish nationalists and their partners in the federal government are robust supporters of free trade, but they are almost powerless.

Ironically, it’s their own fault.

For decades, Flemish nationalists have torn Belgium apart, shifting increasing powers to the country’s regions. Now, they are stuck in a federal government immobilized and embarrassed by those very regional powers they fought so hard to win.

“It’s pretty embarrassing,” said Carl Devos, politics professor at Ghent University. “If you advocate rights for regions … you can’t just say those rights then need to be violated.”

The New Flemish Alliance (N-VA), Belgium’s largest party and Flemish-nationalist powerhouse, is particularly haunted by Wallonia’s obstruction over the Comprehensive Economic and Trade Agreement with Canada. The party wields the power at the federal level but can’t force the southern region to abide by its wishes.

The differences over Canada reveal some of the broader economic faultlines within Belgium. According to figures from the central bank, 83 percent of overall Belgian exports come from Flanders, versus 14.6 percent from Wallonia and 2.4 percent from Brussels. In terms of trade with Canada, the northern region accounts for 90.2 percent of Belgian exports and the south for 9 percent.

“Wallonia doesn’t have skin in the game” — Sander Loones

“Wallonia doesn’t have skin in the game,” said Sander Loones, a member of the European Parliament and vice president of the N-VA party.

Belgium’s federal government has to keep one eye on its own impending diplomatic isolation, but another on tensions between the free-trading Flemish and the economically depressed Walloons, which can flare rapidly. So far, the dispute over the CETA accord has not rekindled Flemish frustrations about subsidizing the poorer part of the country. But as Loones puts it, “It doesn’t take much in Belgium to spark a debate on its institutions.”

Only themselves to blame

While the deadlock is frustrating for the federal government, it could also in theory help the Flemish nationalists in the long run. Their premise — that Flanders and Wallonia are better off apart because they can’t agree — seems validated again. The Flemish movement has been pushing for more autonomy for decades.

The N-VA party rose to power in the past decade, campaigning tirelessly against the economic transfers to Wallonia. It took power at the federal level in 2014, forging a center-right coalition without Wallonia’s largest party, the Socialists.

But the CETA debacle has exposed a painful paradox. “Wallonia’s government is using the sovereignty it got largely because of Flemish demands” for autonomy, said Dave Sinardet, professor in politics and federalism in Brussels. “Nationalists, like the N-VA, can’t really be against that.”

The crisis has triggered other Flemish parties, like the Liberal Open VLD in government, to call on Prime Minister Charles Michel and his government to overrule the Walloon veto.

“Can Belgium really afford to be blackmailed, and blocked, while the whole EU and the rest of the world watches?” — Gwendolyn Rutten

“The only one that needs to commit to this deal today is Minister of Foreign Affairs Didier Reynders,” the party’s president Gwendolyn Rutten told public broacaster VRT. “Can Belgium really afford to be blackmailed, and blocked, while the whole EU and the rest of the world watches?”

The Liberal party won support from Flemish business leaders. One of the region’s most powerful business lobbies, Voka — a close political ally of the N-VA party, has urged the prime minister to simply sign the deal. “If it leads to an institutional crisis, or some fighting, so be it. We’re making a fool of ourselves,” Hans Maertens, head of Voka, told De Tijd newspaper.

The N-VA on the other hand is caught in a Catch-22. Not using their political leverage to push through the deal would mean a loss for their region’s industry and interests. But a power grab at the federal level to overrule the Walloon objection would go against their core values, and core voters’ wishes, of regional autonomy.

Following Flemish demands, the country’s international trade policy was split during the country’s fifth reform of the state in 2001. Flanders has since waged a global campaign to attract investment. In Wallonia, a similar effort took place when the government adopted their Marshall Plan for investment in the region in 2005.

Betting big on the brand of “Flanders,” the northern region set up so-called Flanders Houses in New York and Japan. Delegations of regional ministers, joined by business leaders, jetted around the world, pitching the Flemish brand rather than the Belgian one.

Annual Belgian exports to Canada were worth €2 billion on average over the last decade. About half of products shipped off to Montreal or Halifax are pharmaceutical products, largely from Flanders’ pharmaceutical companies. And a large chunk of imports are diamonds that fuel the diamond industry in Antwerp.

Unfortunate spotlight

Having suffered grave reputational damage for its disjointed response to terror attacks in Paris and then Brussels, the country is again in the spotlight.

“The general feeling is that Les petits belges can’t agree once again … That’s not good for our image,” said Devos.

Traditionally, Belgium has been able to avoid its regional fireworks exploding onto the international stage. When environmental or agricultural issues have caused problems at home, Belgium has simply ducked the decision at the European level.

But CETA is different, experts say. “In past cases, Belgium abstained from a vote. But CETA requires unanimity,” said Hendrik Vos, professor in EU studies at Ghent University.

Wallonia also epitomizes a wider leftist opposition to the deal. “There is a lot of disgruntlement on the left about this trade deal,” Vos said. “The divide across Europe [on the deal] is greater than the unanimity amongst the EU countries we see right now.”

Wallonia’s Minister-President Paul Magnette has become the Socialist figurehead against trade deals like CETA and the EU-U.S. Transatlantic Trade and Investment Partnership.

2,000 jobs at risk as Caterpillar site in Belgium faces closure

Belgian Prime Minister Charles Michel (L) and Minister President of Wallonia Paul Magnette | Stephanie Lecoq/EPA

For the French-speaking Socialist Party, it’s smart politics.

The party has suffered a decline in polls. The far-left Worker’s Party is nibbling away their votes. To their right, the Socialists had to concede the elections to the Liberal MR back in 2014 when a 30-year streak in federal government ended.

“Their resistance is putting the [French-speaking] Socialist Party on the map internationally — but above all, they need to get back on the map in Wallonia,” said Sinardet.

Rallying against multinationals will not hurt their prospects. Wallonia has clashed with multinationals, as their industry declined over the decades and corporate cut-backs sparked job losses.

Wallonia’s rebellion is welcomed by a political minority in Flanders too.

“If the N-VA has to choose the side of the multinationals’ lobby and other interests, they take the multinationals’ side,” the opposition’s Flemish Socialists’ president John Crombez said, raging against the CETA deal.

“People pleading for the importance of trade could be right, but that’s really not the point. It’s the clauses,” Crombez said about CETA’s mechanisms for companies to sue governments. “Get those clauses out if you’re really serious about trade.”