EU-Canada trade deal ‘still possible’ amid hopes of solution to Belgian resistance

The EU-Canada summit scheduled for Thursday is "still possible", European Council president Donald Tusk has said, raising hopes that a landmark trade deal between the two blocs can be salvaged.

Following an emergency phonecall between the head of the European Council and Canadian Prime Minister Justin Trudeau on Monday, both men called for “all parties to find a solution”. “There’s yet time,” Mr Tusk tweeted.

Belgian Prime Minister Charles Michel confirmed earlier in the day that Belgium was unable to ratify the EU-Canada trade deal after failing to win the backing of the regional parliament of Wallonia.

Belgium had been given a deadline of Monday evening to reach agreement, but following a meeting which lasted less than an hour, Mr Michel said he was not in a position to sign the deal.

This was confirmed by the premier of the Wallonian parliament. "We cannot give a yes," said Paul Magnette.

Stalemate

The stalemate over the comprehensive economic and trade agreement (ceta) between EU and Canada has intensified over the last 10 days after Belgium’s French-speaking region failed to endorse the deal.

A meeting of EU trade ministers and two-day summit of EU leaders last week failed to make progress on the deal, pushing discussions into this weekend. But intensive negotiations between senior officials in the EU and the Wallonian parliament failed to break the deadlock.

The controversy, which has dominated news coverage in Belgium, has highlighted divisions within Belgium’s fractious political system which encompasses five regional parliaments and is deeply divided between the Flemish and French-speaking areas of the country.

While the socialist-led Wallonian parliament, which represents around 3.5 million Belgians, is led by Paul Magnette, Belgium's former Prime Minister Elio Di Rupo has been blamed by political opponents for stoking-up resistance to the trade deal.

Jan Jambon, the country's interior minister and vice-president of the Flemish NVA party criticised the decision by Wallonia not to back the deal. "I don't understand why they waited for the last fifteen days to discover this problem." His view was echoed by Geert Bourgeois, the head of the Flanders region. "We're the laughing stock of the whole world. It's bad for Wallonia, for Flanders, for Belgium, for Europe, for the whole world."

Wallonian opposition

Wallonia has said that it needs more time to consider the trade deal amid concerns about the impact of the trade pact on the region’s agriculture industry, and fears that a proposed investment court could give investors the right to sue governments.

While all other member states, including Ireland, have given their backing to the deal Belgium needs the support of all five regional parliaments to support the agreement. The decision to permit national parliaments to have a say on Ceta was taken by the Commission in July, after it deemed that the agreement encroaches on national sovereignty. EU member states are awaiting a key decision from the European Court of Justice on the EU-Singapore trade deal which may give guidance on whether future trade deals are deemed to be of 'mixed competency', involving EU and national powers, or purely EU agreements.

Canada, the EU’s 12th biggest trading partner, is understood to be becoming increasingly frustrated with the delays to the deal which was signed off in principle by member states two years ago. The controversy also threatens to seriously undermine the EU’s reputation as a trade negotiator.

Sinn Féin's Matt Carthy urged the government to drop its support for the agreement, and commended the Parliament of Walloon for rejecting the "toxic deal".

“This is further evidence that CETA and TTIPhave no popular support and shows what can happen when even small nations or regions are given a democratic say on the issue,” he said. “CETA, like TTIP, is bad deal which would have serious negative implications for Irish farmers, workers and consumers.”

Irish position

Speaking in Brussels on Friday Taoiseach Enda Kenny said that Ireland, as a small open economy, was strongly in favour of trade agreements and was well aware of the benefits of trade. He described the EU-Canada trade deal as a "new-generation agreement that will remove tariffs between the European Union and Canada," adding that he was confident the impasse could be resolved over the coming days.

According to the European Commission, CETA will remove more than 99 per cent of tariffs that are currently imposed on trade between the EU and Canada, and will lead to better business opportunities for EU firms in Canada.

But opponents fear that it will lead to lower standards for consumers and give undue power to big business.