The Strategist

Belgium may derail the EU-Canada trade deal

10/19/2016 - 17:51

EU governments are arguing about a free trade agreement with Canada. One of the regions of Belgium is already threatening to derail the whole deal.

foodwatch, STOP TTIP CETA
foodwatch, STOP TTIP CETA
Comprehensive Economic and Trade Agreement (CETA) between the European Union and Canada should be the first trade agreement of the unit with a country of the G7. Failure to deal with Canada would call into question the EU's ability to enter into such trade agreements and highlight challenges that the UK may face in establishing new trade relations with the EU after leaving the block.

Romania continues to insist that Canada has allowed visa-free entry for Romanian citizens. However, more important obstacle is that government of Wallonia, the French-speaking region of Belgium, does not allow the federal government to sign the agreement. To sign the CETA, the federal government must obtain consent of the Belgian regional authorities.

Belgian Foreign Minister Didier Reynders told reporters before a meeting of EU trade ministers in Luxembourg that Wallonia’s position is the main obstacle to the deal.

"I hope that by the time of the summit at the end of the week we will be able to let it (the deal) move", - he said. EU leaders are gathering in Brussels on Thursday and Friday.

EU - Canada Summit will be held on 27 October. However, it will not be possible to sign the agreement without consent of Belgium.  

After actual freezing of negotiations on TTIP, European politicians have focused their efforts on signing a free trade agreement between the European Union and Canada (CETA), which will create a single trade area between the parties. CETA is largely identical to the Transatlantic Trade and Investment Partnership. Market participants believe that CETA will eventually become a starting ground for TTIP.

Three weeks ago, Vice-Chancellor of Germany Sigmar Gabriel convinced skeptical German opposition in need to support signing of CETA despite active public opposition. October 12, he went to Karlsruhe, which hosts the highest courts in Germany, to remove the last obstacles to the agreement.

Spiegel notes that German Federal Constitutional Court with direct participation of its chairman Andreas Voßkuhle was in hurry to consider civil claims for injunction to prevent signing of CETA agreement.

The plaintiffs have collected a record number of signatures, yet the court decided to support the agreement, signing of which scheduled for October 27.

It is noteworthy that the German Bundestag and other European parliaments have expressed their willingness to ratify the agreement with Canada without delay. 

Vice-Chancellor of Germany continues to insist that united duty free trade area between Europe and Canada would open up new markets and give necessary impetus for growth of the euro area economy. CETA’s opponents, on the other hand, are pointing out that signing of the agreement jeopardizes rights of consumers and, in fact, would be beneficial only for international companies. Final signing of CETA, according to opponents of the agreement, will allow to take advantage of each country that has ratified the agreement. At that, local manufacturers will be unable to compete with them, and will inevitably be ruined.