BRUSSELS — The European Union’s planned trade deal with Canada remained on shaky ground on Tuesday, after a meeting of the bloc’s trade ministers failed to generate the support needed for both sides to sign the accord this month.
The trade ministers’ intention to agree on the deal so it could be signed at a planned summit with Canada next week — for which Canadian Prime Minister Justin Trudeau would visit Brussels — hit a hurdle last week, when one of Belgium’s regions rejected the accord.
“After today’s meeting, all member states except for one are on board in terms of substance,” said Peter Ziga, the Slovak economy minister who presided over the meeting with his counterparts.
He said the baton is now passed to EU leaders, who are set to meet in Brussels this week, to settle any final reservations on the so-called Comprehensive Economic and Trade Agreement with Canada, or CETA.
Failure to complete the deal would be a huge blow to the bloc’s trade policy, which is suffering from weakening public and political support. For the European Commission, which represents the EU’s 28 countries in trade talks, the completion of CETA is seen as a litmus test of its ability to negotiate trade accords for the bloc as talks with the U.S. on a trade and investment pact are faltering.
“If we can’t sign a very good agreement with a country like Canada, one of our closest allies…the rest of the world will ask themselves: is Europe a reliable partner?” EU trade chief Cecilia Malmström said earlier Tuesday.
“Of course there will be consequences for trade policy,” she added. She said Mr. Trudeau wouldn’t come here next week if there were no deal to sign.
A spokesman for Canada’s Trade Minister Chrystia Freeland said Tuesday the government remains “cautiously optimistic” that the trade deal will move forward. “We are working hard with our European partners so CETA can be signed this fall and implemented next year,” Alex Lawrence said.
CETA, which was concluded in February after seven years of negotiations, aims to revoke roughly 9,000 tariffs, covering many industrial goods and agricultural and food items including beef and fish. It also promises to open up competition in the services sector, including banking and insurance.
Opponents worry the deal could pose a risk to environmental and labor standards and contend the pact would give multinationals greater power over governments.
In an effort to address concerns, the EU and Canada drafted a so-called interpretive statement, to be signed alongside the deal, aiming to appease critics, particularly on protections of environmental and labor standards.
The declaration is being reworked to address countries’ concerns, but the Belgian region of Wallonia wants further safeguards to ensure that its pork and beef industry isn’t flooded with cheap Canadian products. In addition, lawmakers representing this relatively poorer region of Belgium want to ensure that labor and environmental standards are protected against what they see as encroaching globalization.
They also oppose a controversial court system for settling investment disputes, which they say would end up giving multinationals more power to sue EU governments.
Still, Ms. Malmström voiced optimism over the chances of striking a deal with the Belgian region soon. “If I didn’t think we could solve the Belgian issue, we wouldn’t keep on engaging with them. We are engaging with them and we will continue to do so,” she said.
CETA can be provisionally applied once EU governments and the European Parliament ratify it. But for it to be fully put in place, it will have to be ratified by all 38 national and regional parliaments, requiring a further vote in the Belgian assemblies.
Provisional implementation would include all aspects of the deal relating to trade, whereas the court to settle investment disputes would only come into force with full implementation.
The revolt by the Belgian region underscores possible snags and delays CETA may face once its full ratification is put to question to the EU’s many national and regional legislatures .
It also highlights the difficulties that could arise in striking a trade deal with the U.K. once it leaves the bloc, especially if, like CETA, all the EU’s parliaments end up having to give their approval.
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