By Paul Lirette, Senior Economist, CASE
On October 14, Members of Parliament in Belgium’s French-Speaking region, Wallonia, voted against the signing of the EU-Canada Comprehensive Economic and Trade Agreement (CETA). Despite Federal Government support in Belgium, Walloon regional officials voiced concerns that CETA grants too much power to multinationals, fails to provide clear safeguards for human rights and sustainable development, and lacks protection or handouts for EU farmers.
If ratified, the CETA would eliminate roughly 98% of tariffs between Canada and the EU, making it the biggest bilateral initiative since NAFTA for Canada and one that could generate up to €5.8 billion a year for the EU by some estimates. European Union trade ministers’ met in Luxemburg on October 18, in an attempt to iron out concerns and reach unanimous support for the deal, but were unsuccessful.
The agreement’s approval is coming down to the wire, as official signing of the agreement is scheduled to held on October 27 during an EU-Canada summit with Canadian Prime Minister Justin Trudeau in Brussels. As a result, the EU has set a deadline of Friday October 21 for an agreement to be reached, which also marks the end of a two-day EU Summit in Brussels. But the head of the Walloon region, President Paul Magnette, has claimed that the region will not be able to sign by Friday and that they will not succumb to pressure.
While Wallonia’s opposition to the deal has gained a lot of media presence over the past week, it is not the only region that seems opposed to CETA. For instance, on Saturday, protests against both CETA and Transatlantic Trade and Investment Partnership (TTIP) broke out in front of the Polish Agriculture Ministry in Warsaw and a collective 40,000 people took the streets in multiple cities across France.
This also raises general questions about the future of other EU trade negotiations. For example, will the TTIP, a much bigger deal between the United States and the EU, and future trade negotiations with the United Kingdom face similar pushback? As European Council president Donald Tusk tweeted during the first day of this week’s EU summit in Brussels “CETA could be our last free-trade agreement, if we are not able to convince people that we negotiate to protect their interests.”
As with any trade deal, there will be winners and there will be losers. In the case of CETA, the former are more numerous — as demonstrated by the near unanimous vote to ratify the deal — but the latter are more passionate (also a characteristic of trade policy). Nonetheless, a last-minute withdrawal from a deal that took 7 years to negotiate due to a regional veto would be a lost opportunity, especially given the much-needed opportunities for job creation that freer trade is capable of creating for both Canada and the EU.