After months of haggling, and shortly after Justin Trudeau, Canada’s prime minister, cancelled a trip to sign the Comprehensive Economic and Trade Agreement in Brussels, the Walloons gave into pressure and agreed to approve the the deal.

ceta-deal

The Financial Times reports EU Trade Deal with Canada Salvaged after Belgian Regions Concede.

The EU’s trade deal with Canada was pulled back from the brink on Thursday after Belgian regional leaders dropped their objections to Belgium’s government signing the pact in an eleventh-hour rescue.

The Ceta affair has been deeply embarrassing for EU leaders, who had hoped the deal would prepare the ground for the even bigger Transatlantic Trade and Investment Partnership pact with the US. Instead the affair has raised questions over the ability of the EU to conclude complex deals that require the support of all the parliaments in the bloc.

The parties came close to a deal on Wednesday night but talks broke up — resulting in the cancellation of an EU-Canada summit that had been scheduled for months.

Before he cancelled his visit, Mr Trudeau said the logjam could still be broken. “We are confident that in the coming days we will see a positive outcome for this historic deal.”

After weeks of fruitless talks, the arrangement to secure Ceta comprises an “interpretative declaration” on the most contentious elements of the deal.

The arrangement will allow Ceta to enter into force provisionally but without the immediate introduction of new investment courts, on which Walloon leaders have reserved their position.

A provision allowing the European Court of Justice to provide an “opinion” on the legality of the these courts was seized on as a victory by anti-Ceta campaigners, but officials briefed on the declaration said any such opinion would not be binding as there was nothing in the declaration to reopen the Ceta pact.

“The treaty itself has not been touched, not a comma has been touched,” Belgian prime minister Charles Michel told parliament.

CETA Haggling Synopsis

This deal started seven years ago and was finalized in August of 2014.

What did Wallonia get for these years of delay?

Nothing. “Not a comma has been touched.”

Not So Fast

The Globe and Mail says Belgians agree to resolve impasse, but CETA far from finalized.

The heads of Belgium’s six regional and linguistic parliaments reached an agreement on Thursday with officials from the European Commission that could clear the way for Belgium to sign the trade deal, known as the Comprehensive Economic and Trade Agreement. Members of Parliament from the different legislatures are to meet Thursday afternoon to consider the agreement. However, whatever deal is reached in Belgium will have to be approved by all of the other 27-member EU nations.

Three Belgian parliaments had opposed CETA, while three others and the federal government approved the deal. Under Belgium’s constitutions, all domestic governments had to approve the deal before the country could sign it.

A major roadblock had been opposition to the dispute resolution system provision in CETA known as the Investment Court System, or ICS. Critics feared the ICS gave too much power to corporations and would undermine governments’ ability to regulate.

Under Thursday’s agreement, Belgian politicians and officials from the European Commission, which negotiates trade deals on behalf of the EU, agreed to suspend the application of the ICS until all EU member nations have ratified the treaty. That could prove difficult for the fate of CETA going forward because of the ratification process.

The EU has designated CETA as a “mixed treaty,” meaning that it must be ratified by all 28 EU members. However, the EU and Canada had hoped to sign CETA this week and then adopt it on a provisional basis until each state ratified it. However, the Belgium agreement would mean that the ICS could not be adopted provisionally and would only come into force once every EU nation has ratified the treaty.

“It would be suspended during the ratification process, and that could take a couple of years,” said Hamza Fassi Firhi, an MP in the Brussels city state region. “During this period the European Commission would commit to improve the system and to go towards a model of a multilateral international court system instead of the ICS.”

Mr. Fassi Firhi said the proposal has not been finalized and MPs want assurances that changes to the ICS will be part of the treaty and not some side arrangement. “We need guarantees about that. Because if it’s just a declaration of a member state, even if it’s considered as an annex to the treaty, would it have the same legal value as the treaty itself? There’s still a debate on this particular point.”

And he said CETA could still be rejected despite Thursday’s agreement.

He added that it is also unclear if Canada will agree to the changes to the ICS or if the modifications will apply to Canada. “If it’s a document that has a legal value and that is added to the treaty but Canada is not around the table now discussing and negotiating, would Canada be obliged to comply with the treaty with these extra documents or only be compelled by the treaty and not the extra documents?”

“This is a positive development, but there is still work to do,” said Alex Lawrence, a spokesman for International Trade Minister Chrystia Freeland.

Competing Versions

  • Financial Times: Nothing has changed and nothing needs to be changed.
  • Globe and Mail: Nothing has changed but changes are needed. Wallonia might not get the changes it wants. Canada may not approve the changes if Wallonia get them.

Meanwhile, all 28 nations have to ratify the agreement before it takes hold, even though there is nothing in writing that says ICS is suspended.

Nothing is ever easy in the EU, especially when 28 parliaments and additional regional parliaments have to agree.

Mike “Mish” Shedlock