Opposition to EU, Canada Deal Doesn't Bode Well for Brexit
21 October 2016 - 3:40PM
Dow Jones News
BRUSSELS—A region of southern Belgium continued to block a trade
deal between the European Union and Canada on Friday, raising
questions about the bloc's ability to negotiate and win approval
for more complex and difficult deals, such as a divorce agreement
with Britain.
Despite Wallonia's continued refusal to approve the deal, a
shift in language used by the region's lawmakers signaled some of
the main hurdles may have been overcome on Friday. And European
diplomats said they believe the deal will eventually win
approval.
Still, Europe's difficulties in getting Wallonia on board with a
trade pact which has been repeatedly praised across the bloc as a
model with strong environmental and labor protections, underscores
the uphill struggle the EU will face when negotiating a deal with
the U.K. once it leaves the union.
The Comprehensive Economic and Trade Agreement, or CETA, is the
first wide-ranging trade deal the EU has negotiated with one of the
world's largest industrialized economies. The agreement has been
viewed by some officials as a template for what an accord with the
U.K. could look like if Britain leaves the single market—the free
exchange of goods and services across the EU.
Failure to sign CETA, which took seven years to complete,
highlights the likely difficulty of what are expected to be more
controversial and politically charged negotiations with the U.K.,
which are supposed to last just two years.
"If there are all these problems to have a simple trade
agreement with Canada, just imagine an agreement with the U.K.,"
Maltese Prime Minister Joseph Muscat said, on his way out of a
summit of EU leaders here.
While the Belgian federal government supports the trade pact—as
do its 27 EU counterparts—it still needs the backing of its five
regional authorities before it can give its official approval.
Walloon lawmakers have voiced concerns over the impact of CETA
on public services, labor and environmental standards—issues
largely addressed in 11th hour negotiations with the commission and
Canada.
Chief among remaining concerns is a court system to settle
investment disputes, which critics say would give greater powers to
large multinationals to sue EU governments.
At stake isn't only the deal with Canada but also the bloc's
reputation as a credible trading partner and its ability to
negotiate similar deals in the future, especially as talks with the
U.S. on a trade and investment pact are faltering.
CETA aims to revoke roughly 9,000 tariffs, covering many
industrial goods and agricultural and food items. It also promises
to open up competition in the services sector, including banking
and insurance.
The deal 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 38 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.
Valentina Pop contributed to this article.
Write to Viktoria Dendrinou at viktoria.dendrinou@wsj.com
(END) Dow Jones Newswires
October 21, 2016 10:25 ET (14:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.