Canada-EU failure signals more bad news for free trade deals

Brussels sets Belgium Monday deadline to back trade pact

WASHINGTON, Oct 23, (AFP): The collapse of free trade talks between Canada and the European Union Friday is yet another sign of increasingly stiff resistance to economic globalization.

Despite seven years of talks between Ottawa and Brussels, the CETA Treaty crashed into a wall Friday after being rejected by the Belgian region of Wallonia, making it impossible for the European Union to approve the deal.

That was an ominous sign for another ambitious treaty, the Transatlantic Trade and Investment Partnership between the United States and the EU, which also faces strident opposition on both sides of the Atlantic.

And one huge deal already struck, the Trans Pacific Partnership between the United States and 11 other Pacific Rim countries, is foundering because of the refusal so far of the US Congress to ratify it.

And now, both candidates for the White House, Democrat Hillary Clinton and Republican Donald Trump, say they do not support the treaty.

It is a sharp reversal of a quarter-century since the fall of the Berlin Wall of support in the world’s leading economies for freer trade and globalization. Now, the enthusiasm for breaking down borders appears to be fizzling out.

“We are seeing the results of several decades of failures by political leaders to take the concerns over trade seriously,” said Edward Alden of the Council on Foreign Relations in Washington.

For many years accusations have mounted that the progressive breaking down of trade barriers and removal of import duties in advanced economies has caused deindustrialization and huge job losses to developing countries.

“We’re seeing a backlash caused by that neglect for the losers from trade,” said Alden, author of the book “Failure to Adjust: How Americans Got Left Behind in the Global Economy.”

Debra Steger, a former Canadian negotiator at the World Trade Organization, sees a rising tendency to blame a country’s economic problems on foreigners.

“People are blaming it all on immigrants or goods coming into the country,” she told AFP.

“They want to blame it on something that’s coming from outside, not on technological changes or on bad national policies.”

Frightened by Britain’s vote in June to withdraw from the European Union and the success of Donald Trump’s protectionist speeches, the world’s economic leaders have in recent months sought to blunt the attack on globalization.

Meeting in Washington earlier this month, the finance ministers of the G20 leading economies admitted as a group that economic growth has not been “equitable” and that more needs to be done to spread the benefits of lowered borders.

A different kind of globalization is needed than the one of the recent past, they said.

It’s not clear if their message is going to convince European and US opponents of TTIP. Europeans especially say the proposed treaty will erode environmental and health standards to the benefit of multinational businesses.

Another key issue is that the trade deals — TTIP, TPP, CETA — all propose to include an extraterritorial dispute settlement mechanism for companies to litigate complaints against countries where they invest.

That was a particular complaint in the CETA case. Wallonia enjoyed support in fighting the deal from activist groups like Greenpeace which charged that the deal risked satisfying “corporate greed” and trampling on people’s rights and health standards on both sides of the Atlantic.

The European Union and Canada will decide on Monday whether to gather for a summit later this week to sign the imperilled CETA trade pact, a European source told AFP.

The source said that European Council President Donald Tusk would on Monday afternoon or evening call Belgian Prime Minister Charles Michel with “one simple question: will Belgium be in a position to sign the agreement on Thursday, yes or no?”

The European source said that on Monday Tusk would first call European Commission President Jean-Claude Juncker “to share an assessment of where we are,” then Michel and lastly Canadian Prime Minister Justin Trudeau “to decide whether to maintain the summit,” and regarding Thursday, if Belgium is not in a position to say that they guarantee they can sign, it’s very clear for Tusk that it doesn’t make sense to have a summit, and there will be no summit, and there will be no date set for a new summit, the source said.

The source added that any decision would be made jointly by Tusk and Trudeau.

“The decision will very much depend on what Michel tells Tusk,” the source said.