Canadian minister: EU trade talks have failed

Belgium’s Wallonia blocks the deal over concerns about investors being able to sue governments.

Canada has called it quits.

Canadian Trade Minister Chrystia Freeland said Friday that her efforts to reach a deal with the EU on a landmark trade deal with Canada had failed and that she would be returning home empty handed.

“During the last few months we have worked very hard with the European Commission and member states. But it seems evident that the EU is now not capable of having an international deal, even with a country which has values as European as Canada, even with a country as kind, as patient,” she said upon leaving Belgium’s Walloon parliament in Namur this afternoon.

The region was the holdout in sealing the Comprehensive Economic and Trade Agreement with Canada, potentially torching the deal for the entire Continent. The dramatic fiasco with the French-speaking half of Belgium raises grave questions about the ability of the European Commission to retain executive powers over the EU’s trade policy. And it will likely send concerns over the Channel to the U.K. where officials hope to achieve market access to the EU when it eventually leaves the 28-member bloc.

“Canada is disappointed, I am personally very disappointed, I have worked very, very hard. We have decided to go back home. I am very, very sad, really. Tomorrow morning, I will be at home with my three children,” Freeland added, fighting back tears.

The EU hasn’t reached the same conclusion as Freeland, however.

The Commission’s chief negotiator on CETA Mauro Petriccione, who was at the EU leaders’ summit in Brussels earlier Friday, has rushed to Namur this afternoon, sources said, indicating that the Commission hopes to keep talks with the Walloon government going.

Freeland’s remarks came after a turbulent 24 hours in Brussels during which EU leaders tried their hardest to convince the regional parliament of Wallonia to lend its support to the EU’s trade deal with Canada. Wallonia’s Minister-President Paul Magnette said earlier that he was still unable to support a trade deal between the EU and Canada because of concerns over a legal framework through which investors will be able to sue governments.

Ottawa, which had hoped to sign off on the trade deal with the EU next week during the EU-Canada summit, will now have to wait and see if Wallonia’s concerns over the powers afforded to multinational companies can be smoothed out in the coming days.

European Commission President Jean-Claude Juncker said that he should not be blamed for a controversial decision to submit the EU-Canada trade pact for approval in regional parliaments and governments across Europe and expressed some hope that the impasse over the deal could be resolved within the next couple of days.

Asked whether it had been a mistake to treat the Comprehensive Economic and Trade Agreement as a “mixed agreement” — meaning that not only EU governments and the European Parliament but also 38 regional and national assemblies need to approve the deal — Juncker replied: “I never reflect over mistakes that others have forced me to commit.”

Juncker came under particular pressure from Sigmar Gabriel, a German deputy chancellor, whose Social Democrats party had raised a host of concerns about the democratic nature of the trade deal with Canada.

German Chancellor Angela Merkel, however, defended the decision to open up the trade deal to national parliaments saying that the involvement of national parliaments had helped to bring the debate on CETA back to the facts.

“We can now only hope that last disagreements in Belgium can be sorted out by further negotiations,” Merkel said.

Or the Commission could take the risk of carrying on in spite of Belgium, though experts say that it would be difficult for the Commission to do.

“Given the Commission’s decision to propose the CETA to the Council as a ‘mixed agreement,’ there is no legal option for its full legal implementation without Belgium’s approval,” said Bruno Simões, an associate lawyer at FratiniVergano, a law firm based in Brussels. “At this stage, the issue is more political than legal.”

Simões added, however, that an ongoing case at the European Court of Justice deciding on whether or not a similar trade deal with Singapore should be allowed to be a “mixed agreement” could be an interesting precedent for what happens next with CETA.

“The Commission could choose to go against political considerations and requalify the CETA as an ‘EU-only’ agreement,” he said. “This is unlikely to occur because it would cause more political complications, but it would allow the Council to adopt the CETA even if Belgium is not on board.”

Hans von der Burchard contributed reporting.

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