Thursday

22nd Jun 2017

Belgian veto leaves EU-Canada deal in limbo

  • Wallonia's Magnette: "In current circumstances, we cannot give a yes today" (Photo: Reuters)

[Updated at 19.20 on 24 October] The Belgian government said on Monday (24 October) that it would not be able to sign an EU-Canada trade deal because of Wallonia's opposition.

"We are not in a position to sign Ceta," prime minister Charles Michel said after a meeting with regional leaders early afternoon.

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"The federal government, the German community and Flanders said yes. Wallonia, the Brussels city government and the French community said no," he said.

He added that he faced a Walloon "empty chair on Sunday and silence [Monday] morning" when trying to find a common position.

Michel needed the consent of all Belgian entities to put his country's signature on the deal ahead of an EU-Canada summit that was scheduled for Thursday.

After a late afternoon phone call, European Council president Donald Tusk and Canadian prime minister Justin Trudeau agreed that a summit is "still possible".

"We encourage all parties to find a solution. There's yet time," Tusk said on Twitter.

"It is obvious that, in current circumstances, we cannot give a yes today," Wallonia's minister-president Paul Magnette said after the government meeting.

Since Wallonia's parliament passed a resolution opposing Ceta on 14 October, EU and Walloon officials have been working on ways to address Walloon concerns on several issues, in particular agriculture, environmental standards, and regarding an investor settlement mechanism.

Ultimatum or not?

Wallonia rejected several proposals put forward by the Canadian government and the European Commission for an interpretative declaration that would be attached to the agreement.

On Monday morning, the parliament's speaker Andre Antoine said Wallonia was faced with a "marmalade of texts" and needed time to assess their legal value.

"Every time one tries to impose ultimatums, it makes calm discussions impossible, it makes the democratic debate impossible," Magnette said, referring to EU demands that a solution was quickly found.

Tusk had told Michel on Sunday that a decision had to be taken before Monday evening, in order to take a decision about the EU-Canada summit. Last week, EU trade commissioner Cecilia Malmstroem had said that an agreement had to be found before Friday (21 October).



EU institutions however refused to talk about ultimatums.

"The word was not ours, it came from Magnette," a council source told this website.

"The commission is not used to working with ultimata or deadlines," the commission’s spokesman Margaritis Schinas told journalists on Monday. "It is not the way [commission chief] Jean-Claude Juncker proceeds."

He said that patience was needed so that an agreement could be found and that the commission was "ready to continue to assist by all contributions.

There is no deadline to sign the agreement, for which negotiations ended in August 2014. In February 2016, the EU and Canada agreed to replace the so-called investor-state dispute settlement (ISDS), an ad-hoc arbitration system, by a permanent investor court system (ICS) - the system on which Wallonia now wants clarifications.

EU officials say that re-opening negotiations is out of the question and that only guarantees and clarifications can be added.

"We strongly believe that the EU-Canada deal on the table is a good and fair one," the Slovak presidency of the EU said on Monday, adding that is was "important to use this remaining window of opportunity [before a possible EU-Canada summit] and finalise the internal process in Belgium".

Flemish pressure

From an economic point of view, "it is very unlikely that Ceta would not be signed at all," Erik van der Marel, from the Brussels-based European Centre for International Political Economy, told EUobserver.

He added that if the EU could not sign with Canada, it would be more difficult to conclude other agreements.


The Belgian government is also under pressure, because Wallonia's rejection of Ceta has reopened tensions with the Flemish.

As Van der Marel pointed out, Belgian trade with Canada is mainly from Flanders. The Dutch-speaking region had an interest in pushing the federal government to get French-speaking Wallonia to back Ceta.

The Flemish minister-president Geert Bourgeois said on Monday that a failure of the deal would be a "disaster for Flanders, Wallonia, Belgium, Europe and Canada."

Ceta failure deepens EU trade crisis

Canada said on Friday that the free-trade agreement with the EU had failed and that the bloc was "not capable" of concluding agreements.

Canada woos sceptical EU left on trade deal

Future of CETA largely hangs on the support of Europe’s social democrats. Canada’s trade minister has been touring hotspots of scepticism to convince them that the deal is progressive.

Belgium green lights unchanged Ceta

Wallonia and Brussels have voted to give the federal government the power to sign the EU-Canada trade deal, whose content is not altered by the new documents attached.

Row between EU ministers halts e-book tax rate

A bill to reduce VAT rates on e-books and e-publications has become the latest victim of a row between the Czech Republic and its partners over its own plan to collect VAT.

Focus

EU and China move to fill US void

At a summit in Brussels, EU and Chinese leaders will attempt to deepen ties on trade and climate as US president Trump plans to pull out of the Paris climate deal.

Italy reaches EU deal on failing bank

After months of negotiations, the European Commission and Italy agreed on the terms of rescue for Monte dei Paschi di Siena bank, including job cuts, salary caps and private sector involvement in the bailout.

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