EU, Canada sign long-delayed trade deal after Belgian drama
Tariff removal could start from early 2017
The European Union and Canada signed yesterday a landmark trade pact, ending days of drama after a small Belgian region refused to endorse the agreement and deeply embarrassed the EU.
The long-delayed Comprehensive and Economic Trade Agreement was bedeviled by yet another hold up overnight when Canadian Prime Minister Justin Trudeau’s plane had to return to Ottawa because of mechanical issues. “What patience,” exclaimed European Commission President Jean-Claude Juncker as he embraced the arriving Trudeau at EU headquarters in Brussels.
In a brief exchange together in French, Trudeau said “difficult things are difficult, but we were able to succeed.” He declined to speak to reporters. Trudeau and Juncker signed the pact with European Council President Donald Tusk and Slovak Prime Minister Robert Fico, whose country holds the EU’s rotating presidency.
On the other side of EU headquarters, a rowdy group of around 250 anti-CETA protesters gathered to block the front entrance as riot police watched. Red paint was smeared on the building. Some demonstrators had actually entered the foyer. Police took away 16 people, but did not break up the protest, spokeswoman Ilse Van de Keere said. The EU needed unanimity among all its 28 members and Belgium needed the backing of all its regions to approve the pact. Trudeau had been due to sign CETA on Thursday, but was forced to cancel his flight when the country could not sign on because of opposition from the Wallonia region.
After several rounds of talks late into the night Belgium formally gave its endorsement on Saturday morning. Smaller than the US state of New Jersey, Wallonia region blocked the deal between more than 500 million EU citizens and 35 million Canadians for several weeks. Politicians there argued the deal would undermine labor, environment and consumer standards and allow multinationals to crush local companies.
The EU says CETA will remove more than 99 percent of tariffs and boost trade with Canada by 12 billion euros ($13.2 billion) a year, creating economic growth and jobs on both sides of the Atlantic. It insists the deal will not prevent governments from moving to protect environmental and social standards if they believe action is needed, despite concerns in Wallonia and elsewhere that big companies would have free rein.
“This is an important day for the EU and Canada too, because we setting international standards which will have to be followed by others with whom we are in negotiations as far as free trade is concerned,” Juncker told reporters yesterday.
Work on the agreement was launched in 2009 and the text was actually finalized two years ago but sat in limbo awaiting endorsement. The delay has raised troubling questions about the EU’s ability to seal big trade agreements. Work on a similar pact with the United States dubbed TTIP has barely advanced this year and little progress is likely before a new US president takes office in January.
“There is no realism in concluding TTIP right now,” EU Trade Commissioner Cecilia Malmstroem said yesterday, noting the US election campaign. None of it bodes well for the trade talks that Britain will need to have with its 27 EU partners once it leaves the bloc.
Not the last act
Yesterday’s signing will not be the last act. Assuming the European Parliament gives its assent, CETA could come into force partially early next year. However, full implementation, which would include a contentious investment protection system, will ensue only after clearance by more than three dozen national and regional parliaments. The Belgian experience shows this outcome is no given. The main focus of protests against CETA and TTIP remains the system to protect foreign company’s investments. Critics say its provision for arbitration panels to rule on disputes with states can be abused by multinational companies to dictate public policy, such as on environmental standards.
The EU and Canada say their investment protection system guarantees the right of governments to regulate, make use of independent judges and be more transparent. The deal will eliminate tariffs on almost 99 percent of goods. The beneficiaries would include, for example, carmakers or the EU textile sector, for which Canadian duties of up to 18 percent can be imposed at present. Service companies could also benefit and EU companies would be able to tender for public contracts at Canadian provincial and municipal level, the first time Canada has offered this. Canada would be able to send larger quotas of meat, beef and wheat to the EU market, and EU dairy producers would be able to export more than double the current amount of “high quality” cheeses to Canada. —Agencies