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Prime Minister Justin Trudeau is expected to sign the CETA trade deal at a summit in Brussels later this month, despite opposition, such as this Tuesday demonstration in Paris. (Francois Mori/AP)
Prime Minister Justin Trudeau is expected to sign the CETA trade deal at a summit in Brussels later this month, despite opposition, such as this Tuesday demonstration in Paris. (Francois Mori/AP)

Canadian businesses fear Belgium could derail Canada-EU trade deal Add to ...

A Canadian business group that has been a major proponent of a free trade agreement with Europe fears the accord could be derailed by Belgium at the 11th hour even though the continent’s most powerful leaders are calling it the “good” kind of trade deal.

EU trade ministers vote on Oct. 18 at the European Council on whether to approve the Canada-European Union deal. Belgium’s federal government favours the Comprehensive Economic and Trade Agreement, but needs the backing of the country’s three regions to give its formal approval. Lawmakers in the southern Walloon region say they oppose the pact because they fear a flood of farm imports.

“We remain optimistic about the vote on the 18th but is frustrating that not a week goes by without a member state raising some concern – sometimes seemingly out of nowhere – and the fear is that Europe is not seeing the forest for the trees,” said Jason Langrish, executive director of the Canada Europe Roundtable for Business.

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Other European Union member states, including Austria, Slovenia, Hungary and Romania, have signalled they are uncomfortable with or opposed to the existing Canada-EU deal.

“They are focusing on local interests and not recognizing that if they vote No, this could effectively kill the EU’s trade agenda,” Mr. Langrish, whose organization represents Canadian and European companies. He said he hopes deal-making behind the scenes will temper Belgian opposition.

“It appears there could be some horse trading going on to secure votes, but, yes, we are at the same time concerned, because we need [Belgium’s vote] for the agreement,” Mr. Langrish said.

The Canada-EU deal would eliminate duties on tens of thousands of products, covering more than 95 per cent of everything Canada now sells to Europe, and dismantle many non-tariff barriers to commerce. It would give Canada-based auto assemblers and beef and pork producers significant access to EU markets.

Expert opinion is divided on whether a country such as Belgium will thwart the vote. The European Council’s decisions are usually made by consensus. A Canadian official speaking on background on Tuesday suggested countries could abstain rather than disrupt a consensus.

A spokeswoman for the European Union’s delegation in Canada confirmed on Tuesday the decision will be made on a consensus basis.

The Canadian government is dispatching an envoy to the Walloon region to speak to local government leaders this week. David Lametti, parliamentary secretary to the Minister of International Trade, already in Europe to promote CETA, is journeying to southern Belgium to meet with regional representatives. He met with legislators from Walloon’s parliament in Canada last weekend.

Brussels and Ottawa have long expected to clinch the CETA deal this month. Prime Minister Justin Trudeau is expected to travel to Europe at the end of October to sign it. The three-step approval starts with the EU Council, and continues with a vote by the 751-member European Parliament by late 2016 or early 2017.

Once it passes the EU Parliament, a 2017 implementation date would be set and the agreement would go into effect on what is called a provisional basis. Each country would have to ratify the deal, and the 10 per cent or so of it that is under national purview in each member would come into force after each state issues its own approval.

Asked if it is confident the deal is on track, International Trade Minister Chrystia Freeland’s office said: “Canada is working hard with its European partners so CETA can be signed in October and implemented next year.” It pointed out that Ms. Freeland has been in Europe to talk up the agreement and has twice been to Belgium for meetings with national leaders. The minister also recently visited Austrian Chancellor Christian Kern.

France’s Prime Minister, Manuel Valls, arrives in Canada on Wednesday for meetings with Mr. Trudeau that will include talks on CETA. He expressed optimism, but offered no guarantees.

In an interview with The Globe and Mail, he said France will work to have the deal signed on schedule, along with the EU’s other largest nation, Germany, and the European Commission in Brussels. “Listen, if France and Germany provide the drive, with the European Commission – [European Commission President] Jean-Claude Juncker said it himself again, in the name of the commission – the impetus, in my opinion, will be strong and convincing,” he said.

After Brexit, and a backlash against a planned trade pact between the EU and the United States, France’s government is highlighting the agreement with Canada as a balanced package Europeans can accept.

“We can say there are good agreements – Canada. And there are others that are bad, so we cannot sign those ones,” Mr. Valls said. “But when they are good, when they are useful to both parties, we must move forward.”

In Europe, the political left of Germany and Austria have expressed opposition to investor-state mechanisms that allow companies to sue governments – in particular, raising fears of an agreement that would allow U.S. firms to fight national regulations for the environment or other areas before arbitrators.

Mr. Valls noted that Canada accepted the idea of establishing a public court to handle such matters, and argued that such commitments respond to the concerns expressed in places like Germany and Austria. He also noted Canada agreed to recognize France’s agricultural geographic indicators – the regional labels applied to products like cheese or wine that can only be used by goods from that area – but the United States did not.

With a report from Reuters

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