Trudeau ‘confident’ CETA crisis is nearly over

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Prime Minister Justin Trudeau is predicting the stalled Canada-European Union trade deal will be wrapped up in the days ahead as efforts in Belgium to break a political deadlock spilled into Thursday – the very date the accord was supposed to be signed.

"We are confident that in the coming days we will see a positive outcome for this historic deal," Mr. Trudeau told the House of Commons on Wednesday, a bold prediction that suggests the Prime Minister has received assurances that a breakthrough is near by European Union leaders.

The EU requires the assent of all 28 member nations to sign the deal. Politically decentralized Belgium has for weeks been unable to agree to sign the Comprehensive Economic and Trade Agreement with Canada because of opposition chiefly from the French-speaking region of Wallonia, whose regional government has a veto over international accords.

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Talks in Brussels that adjourned late Wednesday between the central government and regions are seeking to hammer out conditions under which the regional governments would permit Belgium to green-light CETA.

Canada and the EU had long planned a splashy CETA signing summit on Thursday in Brussels, but International Trade Minister Chrystia Freeland acknowledged that meeting was now cancelled.

"The Canadian delegation will not be travelling to Europe [Wednesday night]. Canada remains ready to sign this important agreement when Europe is ready," a spokesman for Ms. Freeland said in a statement.

Belgian Prime Minister Charles Michel has been working with the heads of the country's regions and linguistic communities to produce a document to allay concerns about agricultural imports and a dispute settlement system that critics say could be abused by multinationals to dictate public policy. One European Union diplomat who spoke on condition of anonymity said it's envisioned the text dealing with these concerns would be attached to the deal.

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's auto assemblers and beef and pork producers significant access to EU markets.

Wallonia's chief problem remains the investor-state dispute settlement mechanism that gives Canadian and European companies a mechanism for suing each other's governments for decisions that affect their investments.

The Liberal government has said all week that it's up to Europe to resolve its impasse.

The internal Belgian compromise that is emerging however may not be to Canada's liking. It outlines Belgian legislators' refusal to ratify a deal with the existing investor-state dispute settlement provision, one the Trudeau government had already significantly watered down in negotiations.

There are three stages for the EU to approve and pass CETA. The first is for all 28-member countries to agree to sign the deal. Then the agreement would be put before the European Parliament, where it is easily expected to pass.

At that point, an implementation date would be set and the agreement would go into effect on what is called a provisional basis. This would represent the 90 per cent of the deal under the supranational control of the EU itself. It would then be up to each country's parliament to ratify the accord, and the 10 per cent or so of the deal that is under national purview in each country would come into force only after each member state issued its own approval.

The working Belgian compromise appears to say that Belgium's legislators would reserve the right at least for a year to reject even the 90 per cent of the deal that would go into effect provisionally after a European Parliament vote. It also confirms that accepting or rejecting the investor dispute court would be up to the 28 national parliamentary bodies of the EU, as part of their ratification vote on the 10 per cent of the deal entirely within each country's jurisdiction.

It also discusses rules for allowing Belgium to erect protective tariffs or block agriculture imports of a single good if a "market imbalance" arises.

Canadian international trade lawyer Lawrence Herman urged Ottawa Wednesday to remove the investor-state dispute settlement provision from CETA in order to save the accord, saying it's not a deal-breaker for businesses in Canada.

"There is no concern in the Canadian business community about risks of investing in France, Spain, Germany, Italy, Ireland or the U.K. … There are significant Canadian investments in each of these countries and there's never been an issue requiring investment protection."

"CETA is too important for both sides to have it go down in flames over a particular part of the agreement that neither side considers essential," Mr. Herman said.