In blow to EU, byzantine politics blocks Canadian trade deal

EU Commission chief Jean-Claude Juncker and EU President Donald Tusk, representing the world's biggest trading bloc, were due to speak with Trudeau by phone later Monday to explain the situation

By: AP | Brussels | Published:October 24, 2016 8:32 pm
trade canada, EU trade, EU canada trade, Justin Trudeau, Belgium canada trade, Belgium canada treaty, EU Belgium, Belgium EU canada, latest news, latest world news Canada’s Prime Minister Justin Trudeau speaks during Question Period in the House of Commons on Parliament Hill in Ottawa, Ontario, Canada, October 19, 2016. (Source: REUTERS/Chris Wattie)

In a major embarrassment to the European Union, a small region of Belgium continued to withhold on Monday its necessary support for a landmark free trade deal that the rest of the bloc and Canada wanted to sign this week. While it remained unclear whether negotiations would resume with the francophone region of Wallonia, it was highly likely that the EU would have to call off Thursday’s summit to sign the deal with Canadian Prime Minister Justin Trudeau.

“We have been asked to give a clear answer today,” on whether Belgium could sign up as the last of 28 member states,” said Belgian Prime Minister Charles Michel after meeting with Wallonia leader Paul Magnette. “And the clear answer, at this stage, is no.”

Watch what else is in the news

Even though Michel is eager to sign the deal, Belgium’s byzantine constitutional setup means every single region in the country needs to back it, not only the national government. As a result, opposition from a region of 3.5 million could now nix a deal between over 500 million EU citizens and 35 million Canadians.

The EU’s executive Commission called for patience in an attempt to save the free trade deal and had already dismissed a Monday night deadline as counterproductive. EU Commission chief Jean-Claude Juncker and EU President Donald Tusk, representing the world’s biggest trading bloc, were due to speak with Trudeau by phone later Monday to explain the situation.

On Monday, Wallonia President Paul Magnette insisted he would agree to nothing under the threat of an ultimatum but remained open to further talks. “Each time they put forward such an ultimatum it makes a serene discussion and a democratic debate impossible,” Magnette said. “I indicated that other parallel political contacts are still going on and that we could give counter proposals.”

The EU Commission, which has negotiated the deal on behalf of the 28 nations, insisted that this week’s summit was not the final deadline.

“Now, we need patience,” said EU Commission spokesman Margaritis Schinas. “The Commission traditionally does not set deadlines or ultimatums.” Andre Antoine, the head of the Wallonia legislature, said on RTL network that “no, it will not be possible” to back the deal on Monday, arguing there are too many outstanding issues.

Even if Thursday’s EU-Canada summit has to be called off, it could always be rescheduled when Wallonia has signed on to the agreement, Schinas indicated. Over the past week, Belgium missed two deadlines that the EU had set to agree to the deal and Canada briefly walked out of the trade talks before returning the next day.

Politicians in Wallonia, which is smaller than the U.S. state of New Jersey, argue that the proposed CETA accord — short for Comprehensive Economic and Trade Agreement — would undermine labor, environment and consumer standards.

Proponents say it would yield billions in added trade through tariff cuts and other measures to lower barriers to commerce. At the same time, the EU says it will keep in place the region’s strong safeguards on social, environmental and labor issues.

Magnette said a key hurdle was the issue of “private arbitration” in which multinationals can legally challenge governments on policies. He said Wallonia a better deal would bolster EU standards and set a strong precedent for other trade talks between Europe and trading partners like the United States or Japan. The trade talks with the U.S. in particular have run into huge resistance in Europe, drawing public protests.