EU, Canada Trade Deal Blocked by Belgian Opposition – Wall Street Journal

Belgian Prime Minister Charles Michel, above, has already informed European Council President Donald Tusk of his country’s position.
ENLARGE

BRUSSELS—Belgium said Monday it wouldn’t support a trade deal between the European Union and Canada after one of its regions continued to block the pact, dashing hopes of signing the accord later this week.

The Belgian government had until Monday to get Wallonia on board if the deal was to be signed at a planned summit with Canada on Thursday that Canadian Prime Minister Justin Trudeau was expected to attend.

While the likely postponement of the summit doesn’t necessarily spell the end of the trade pact, it does highlight the acute difficulties the EU is facing in striking ambitious economic agreements. The impasse has also begun to weigh on Canada’s patience.

EU officials have already said reaching a deal with Wallonia could take at least several more weeks, stressing that the problem at hand is first and foremost a domestic issue in Belgium.

“At the moment we need to arm ourselves with patience,” said Margaritis Schinas, the spokesman for the European Commission, which negotiates trade deals on behalf of EU governments.

He added that even if this week’s summit doesn’t take place, the issue will remain open.

The Comprehensive Economic and Trade Agreement, or CETA, has been on thin ice in recent weeks after opposition by Wallonia, Belgium’s French-speaking region, has kept the country’s leadership from supporting the deal.

After a meeting on Monday of representatives from Belgium’s various regional governments, the federal government said it was unable to support the deal.

Because of opposition from the Walloon government, “that means we’re not able to sign off on CETA,” Belgian Prime Minister Charles Michel said Monday.

Belgian and EU officials said Mr. Michel had already informed European Council President Donald Tusk of his country’s position, and that Mr. Tusk would speak to Mr. Trudeau later Monday about whether the planned summit would still take place.

The trade deal between the EU and Canada needs the full backing of all 28 member states. But while the Belgian federal government supports the trade pact, it still needs the green light from its five regional authorities before it can give its official approval.

A spokesman for Canadian Trade Minister Chrystia Freeland repeated Monday that it was up to Europe to find a solution that completes the trade pact. Ms. Freeland is scheduled to be in Canada’s legislature Monday, where she may face questions from opposition lawmakers about the future of CETA, which Canada policy makers were relying on to help boost exports.

CETA, which was concluded in February after seven years of negotiations, aims to revoke roughly 9,000 tariffs, covering many industrial goods and agricultural and food items, including beef and fish. It also promises to open up competition in the services sector, including banking and insurance.

During several days of intense back-and-forth among Wallonia’s leadership, Canada and the European Commission, negotiators added further safeguards to the text to ensure that concerns about not lowering the standard for public services, the environment and other sensitive areas were addressed. But Wallonia still objected to the deal.

Walloon lawmakers worry the deal could harm the region’s beef and pork farmers and pose a risk to environmental and labor standards. They also oppose a controversial court system for settling investment disputes, which they say would end up giving multinationals more power to sue EU governments.

While changes and clarifications made to the agreement over the past few days have settled some of Wallonia’s reservations, the region’s leadership has insisted that it needs more time to examine them, and also needs further safeguards, particularly on the investment dispute court.

CETA can be provisionally applied once EU governments and the European Parliament ratify it. But for it to be fully put in place, it will have to be ratified by all of the EU’s national and regional parliaments, requiring a further vote in the Belgian assemblies.

Provisional implementation would include all aspects of the deal relating to trade, whereas the court to settle investment disputes would only come into force with full implementation.

Write to Viktoria Dendrinou at viktoria.dendrinou@wsj.com and Natalia Drozdiak at natalia.drozdiak@wsj.com

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