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EU and Canada to sign trade deal after Belgian drama

Sunday, October 30, 2016 - 10:54

[BRUSSELS] After a chaotic drama in which a small Belgian region threatened to sink a giant trade deal seven years in the making, the European Union and Canada will finally sign on the dotted line on Sunday.

Canadian Prime Minister Justin Trudeau agreed at the last minute to fly to Brussels to ink the landmark pact known as CETA at a summit with European Union President Donald Tusk and European Commission head Jean-Claude Juncker.

The ceremony was meant to happen on Thursday but was delayed after Belgium's French-speaking region of Wallonia, with just 3.6 million people, refused to agree to the terms of a deal affecting more than 500 million Europeans, along with Canada.

Plucky Wallonia resisted huge pressure from all sides until it won concessions - for regional farming interests and guarantees that international investors will not be able to force governments to change laws - allowing Belgium to sign the deal late Friday, enabling Tusk and Trudeau to set a new date.

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Sunday's summit will begin at 0830 GMT with the signing due at 1000 GMT.

The Belgian drama had sparked dire warnings for both the EU's credibility following Britain's shock vote to leave and for the Western economic system in general at a time of widespread uncertainty.

Mr Trudeau hailed it as a "good sign in an uncertain world" in a phone call with Mr Tusk, an EU source told AFP.

Underscoring the relief on the EU side, which is also struggling to stay unified in the face of a huge migration crisis spawned by the war in Syria and over its policy towards a resurgent Russia, former Polish premier Mr Tusk tweeted "Mission accomplished!" Belgian Foreign Minister Didier Reynders said "nothing is simple in Belgium but few things are impossible" as he officially signed up to the deal on Saturday.

Formally known as the Comprehensive Economic and Trade Agreement (CETA), the deal removes 99 per cent of customs duties between the two sides, linking the single EU market of 500 million people with the world's 10th largest economy and a member of the G7 club of industrialised powers.

But it had been hanging by a thread due to protests from Wallonia, a formerly wealthy industrialised region in Belgium's south that has now fallen into rust-belt neglect, alongside opposition from other French-speaking communities.

The trade agreement requires all 28 EU member states to endorse it and in some cases - as in Belgium - regional governments also have to give their approval, meaning Wallonia and the other holdouts were effectively blocking the deal.

Belgian Prime Minister Charles Michel held marathon talks in a bid to win over the holdout regions, finally announcing Thursday that the two sides had reached a deal, enabling the other 27 nations to give their approval.

Mr Michel insisted that the marathon talks with Wallonia "did not change a comma" in the deal.

But Paul Magnette, the head of the Walloon regional government and new poster boy for opponents of CETA, said he received assurances from the federal government of strengthened social and environmental protections.

After hitting a deadlock in talks with Walloon leaders last week, an emotional Canadian Trade Minister Chrystia Freeland was on the verge of tears as she dismissed the EU as "incapable" of securing an international agreement.

The EU-Canada deal has also drawn widespread protests from anti-globalisation "Stop CETA" activists who say it undermines local industries and standards for healthcare and other issues.

They also see it as a Trojan horse for an even bigger and more controversial deal between the EU and the United States.

Negotiations for that deal, known as the Transatlantic Trade and Investment Partnership (TTIP), have however stalled in recent weeks with the goal of approving it by the end of President Barack Obama's term of office now having been abandoned.

The troubles with the Canadian deal have meanwhile been seen as a possible harbinger of things to come for Britain as it tries to negotiate a new trade pact with the EU after it leaves the bloc - most likely in 2019.

AFP

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