Cautious optimism in trade-deal breakthrough

International Trade Minister Chrystia Freeland sounded a cautionary note Thursday after an apparent European breakthrough in the long-running Canada-EU free trade saga, saying every trade agreement has “exit provisions.”

“This morning, we absolutely had a positive development; there are still many steps to be taken,” the minister said hours after an agreement was struck between Belgium and its holdout region of Wallonia.

That agreement was heralded as the change that would allow the lucrative trade deal to be signed in the coming days. Wallonia held a veto over the Belgium’s ability to support the Comprehensive Economic and Trade Agreement, or CETA, which needs the backing of all 28 EU countries.

The changes contained in the Belgian agreement may give national and regional parliaments throughout Europe new powers over the controversial investor protection provisions of the pact.

“Trade agreements must be structured that way to permit national sovereignty,” Freeland said in Ottawa.

“I want to be sure that Canadians appreciate that even after signing, the process will not yet be complete. As with all trade agreements, the next step will be ratification and with CETA that will mean a vote in the European Parliament, if we get past signing.”

Belgium said the agreement would pave the way for Prime Minister Justin Trudeau to travel to Brussels soon to sign CETA — an event that had long been set for Thursday before the Walloon dispute forced its postponement.

But some observers say the fix might only be temporary and that the lucrative trade pact could still be doomed to fail at a later stage.

In recent weeks, Wallonia — a tiny French-speaking region of 3.5 million people — took up the cause of opposing the investor-state dispute settlement mechanism — ISDS — and was supported by other European politicians and anti-trade activists.

Those groups were concerned that ISDS would give big companies the power to sue governments for creating regulations that affect their profits. They said that would undermine the ability of countries to regulate on the environment, labour and health.

The new Belgian agreement — which still needs the approval of the handful of Belgian regional parliaments as well as the 27 remaining EU countries — essentially gives Europe’s individual national and regional parliaments the ability to veto ISDS at a later date.

The agreement also calls for a review of the dispute settlement mechanism by the European Court of Justice.