Belgium Agrees to Back EU-Canada Trade Pact

  • Backing of Wallonia allows ambitious accord to move ahead
  • Canada hails ‘positive development,’ says more work remains

Belgian Deal Ends Deadlock Over EU-Canada Trade Agreement

Belgium reached a deal with the country’s southern region of Wallonia to approve a trade agreement between the European Union and Canada, ending a deadlock that delayed the accord’s signature.

The agreement is an “important step for EU and Canada,” Belgian Prime Minister Charles Michel said in a post on Twitter on Thursday, adding that the nation’s regions will be able to formally approve the pact by the end of Friday.

The approval removes the last major obstacle for the EU and Canada to move ahead with one of the world’s most ambitious and far-reaching trade pacts. The delay in concluding the deal raised concerns about the prospects of other agreements now under negotiation between the EU and the U.S. and Japan, as well as an accord with the U.K. over its future relationship with the bloc.

Belgium’s federal government had been unable to persuade the Wallonia regional parliament in the country’s French-speaking south to sign up to the proposed pact. The EU and Canada canceled a summit planned for Thursday at which the two sides would have signed the Comprehensive Economic and Trade Agreement, or CETA, which has taken seven years to negotiate.

‘Good News’

“I am glad for good news,” EU President Donald Tusk said. “Only once all procedures are finalized for the EU signing CETA, will I contact” Canadian Prime Minister Justin Trudeau to arrange a new summit date.

Once Belgium’s regional parliaments have given their official consent, the EU will be able to formally sign off on the deal.

In holding up the deal, Wallonia, which accounts for less than 1 percent of the EU’s population, cited concerns about the impact on employment and consumer standards. One particular worry was the accord’s provisions for an investor arbitration system, which include protections for overseas companies.

“This is a positive development, but there is still work to do,” Alex Lawrence, spokesman for Canada Trade Minister Chrystia Freeland, said in an e-mailed statement. “Canada has done its job. We negotiated a progressive agreement that will create jobs and growth for the middle class. Canada ‎remains ready to sign this important agreement when Europe is ready,” he said.

Regional Authorities

Wallonia’s stance had tied the hands of the Belgian federal government, which had been in favor of the agreement but needed the endorsement of regional authorities. The other 27 EU nations support the deal, the bloc’s first commercial accord with a fellow member of the Group of Seven industrialized countries.

Although Belgian’s regions have lent their support for now, this week’s deadlock may be an indication of difficulties the EU will face when regions get to formally ratify the deal after it takes provisional effect.

In a declaration agreed to by Belgium’s regional governments on Thursday, the country is to ask for an opinion from the EU’s top court as to whether the investor arbitration system is compatible with EU treaties. Wallonia and other regional authorities had said they had no intention of ratifying CETA if the arrangement laid out in the current text isn’t changed.

The EU says the pact would boost its economic output by about 12 billion euros ($13.1 billion) a year and expand EU-Canada trade by about a quarter.

Canada’s Trudeau has warned that the EU needed to prove it was still viable by passing CETA. Failure would prompt questions about “how relevant the European Union continues to be as a political entity,” he said earlier this month.

— With assistance by Josh Wingrove, and John Martens

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