Canada’s Trudeau Cancels Trip to EU as Trade Talks Resume

  • Belgian region of Wallonia refuses to endorse EU-Canada pact
  • Negotiations to continue Thursday to overcome deadlock

Canadian Prime Minister Justin Trudeau canceled his planned trip to sign an EU-Canada free-trade agreement in Brussels on Thursday as Belgium’s Wallonia region continued to oppose the accord and more negotiations were scheduled to try to break the deadlock.

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Justin Trudeau

Photographer: Justin Chin/Bloomberg

Despite weeks of talks, Belgium’s federal government has been unable to persuade the Walloon regional parliament to sign up to the proposed pact between the European Union and Canada. The negotiations were scheduled to resume at 10 a.m. in Brussels.

An EU-Canada summit had been planned at which the two sides would sign the Comprehensive Economic and Trade Agreement, or CETA, which has taken seven years to negotiate. But the Canadian delegation will not be making the trip, Trade Ministry Spokesman Alex Lawrence said.

“Canada remains ready to sign this important agreement when Europe is ready,” Lawrence said.

In holding up the deal, Wallonia, which accounts for less than 1 percent of the EU’s population, cites concerns about the impact on employment and consumer standards. One particular worry is the accord’s provisions for investor-state dispute settlement, or ISDS, which establish protections for overseas companies, including an “institutionalized dispute-settlement tribunal.”

Paul Magnette, leader of the Walloon government, told Liberation newspaper on Wednesday that the tribunal system “does not have all the guarantees of independence” offered under European and Canadian jurisdictions.

Christophe Collignon, head of the Socialist group in the Walloon parliament, said the tribunal judges should be appointed by the state and not by the companies. “Multinationals have a lot of power,” Collignon said in a telephone interview on Wednesday. If foreign companies “have ways of settling litigation that’s favorable to them, then the state is in great difficulty,” he said.

Wallonia’s stance is tying the hands of the Belgian federal government, which is in favor of the agreement but needs 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.

Canadian Patience

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. The deal’s failure would complicate separate negotiations by the EU with the U.S., Japan and other countries.

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 in Toronto earlier this month.

“I assume no other partner in the world would have had as much patience as the Canadian government,” German Vice Chancellor Sigmar Gabriel said in an e-mailed statement. “Even if the summit isn’t taking place today: CETA is the best trade agreement that the European Union has ever negotiated. I hope that the problems within Belgium can be resolved swiftly and the EU-Canada summit can take place soon.”

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