Faulty glue could unstick EU trade deal

CETA faces strong resistance from Austria

Justin Trudeau is scheduled to be in Brussels a month from now to finally sign the massive trade agreement with the European Union that has been eight years in the making.

But he won’t make the trip if there is no deal to ink — and there is a very real prospect the whole agreement could yet come unstuck.

If it does, the culprit will likely be faulty glue on the envelopes of Austrian postal votes that has caused that country’s presidential election to be postponed until December.

The Comprehensive Economic and Trade Agreement was agreed in principle two years ago but has been in trouble ever since as an anti-trade backlash has swept across Europe and North America.

Austria remains the biggest hurdle to the 28-country European bloc of countries signing off on the CETA.

The agreement, and another being negotiated with the United States, are contentious subjects in the Austrian election that was due to take place this weekend. With a vote of European trade ministers expected to take place on Oct. 18, the election should have been over by the time of any decision.

But the discovery that the adhesive seals on postal votes were defective has caused the postponement of the Austrian election until early December, with the result that the government of social democratic chancellor, Christian Kern, is maintaining its opposition to CETA. He has pointed out that 88 per cent of Austrians in one opinion poll oppose CETA on the grounds it shifts power in favour of global enterprises.

Despite Kern’s apparent intractability, Canadian Trade Minister Chrystia Freeland is said to be cautiously optimistic that the agreement can still be reached, without reopening negotiations on a pact that aims to eliminate tariffs on 98 per cent of goods.

The cause for optimism is that Kern remains isolated, even among social democrats in Europe, and is being lobbied by his peers from Germany, Sweden and the Netherlands.

An even more grave threat to CETA came earlier this month in Germany, where a vote against the deal at the convention of the governing coalition partner, the Social Democratic Party, could have killed it stone dead.

Thousands of Germans have taken to the streets to protest CETA and the Transatlantic Trade and Investment Partnership being negotiated with the United States.

Many Europeans have been concerned about the rights of foreign investors to sue governments, often seen as an infringement of national sovereignty.

In particular, many SDP members argue that trade comes with no assurances that its spoils will be shared equally.

But CETA has been championed by Germany’s Economy Minister Sigmar Gabriel, the SDP’s chairman, who came to Canada to discuss the agreement with Trudeau recently.

Gabriel secured overwhelming support from SDP delegates at its convention, a vote that was followed by a massive majority in the Bundestag.

The result was not a foregone conclusion. But Gabriel, supported at the Wolfsburg convention by Freeland, convinced delegates that Canada is a country with similar values to the EU, and is at a similar stage of development.

Failure to conclude a deal with Canada would neuter Brussels’ ability to steer trade policy and bolster the forces of protectionism that have powered Donald Trump and Brexit, the deal’s proponents argued.

Freeland pointed out that the section dealing with the rights of states to regulate has been changed significantly as part of the Liberal Party’s “progressive trade” agenda.

The prospects for CETA have improved commensurately, as it becomes more and more apparent that the TTIP with the U.S. is dead. At a ministerial meeting in Bratislava last week, concerns about those negotiations were raised by Germany and France, even though neither called for talks to stop.

German approval for the CETA has created a ripple effect across the continent, improving the prospect of its passage.

Yet Austria remains as immovable as its famous alpine mountains.

It will be grimly ironic if eight years of detailed negotiations fail because of faulty envelope adhesive — the classic example of the kingdom being lost for the want of a nail.