EU-Canada trade deal under threat due to dysfunctional EU

By Nawab Khan BRUSSELS, Oct 24 (KUNA) -- The world these days is watching with great astonishment on how an European Union's international trade deal is liable to collapse due to the opposition by a small region in Belgium, called Wallonia.
After seven years of negotiations, the EU-Canada Comprehensive Economic and Trade Agreement (CETA) was slated to be signed this Thursday. So far 27 of the European bloc's 28 members have approved the deal but the French-speaking region of Belgium with a population of 3.5 million (out of a total of 11 million in Belgium) has rejected the deal.
Belgium is divided into three regions, Wallonia, Flanders and Brussels-Capital. Under Belgium's trade policy, the regions have the final word on whether an international agreement such as CETA passes.
This trade deal crisis raises many questions not only the way international trade deals are managed by the EU but also on how the decision-making process in the EU functions as a whole.
"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, "Canadian Trade Minister Chrystia Freeland told reporters after talks with the Wallonia parliament in the city of Namur last Friday.
On his part, the president of the Socialist Group in the European Parliament, Gianni Pittella, commented that "it is obvious that if a small community is able to hold 500 million EU citizens hostage - whether one agrees with the specific reasons or not - there is a clear problem with the decision-making process and the implementing system in Europe." "This low capacity for policy-making in the EU unfortunately applies to every sector and it paralyses the whole European Union. Either the fundamental functioning is changed or the EU risks being sentenced to irrelevance," he warned.
Wallonia's Minister-President Paul Magnette defended his action in blocking CETA arguing that he is concerned over a legal framework through which investors will be able to sue governments.
"The debate is about which globalisation we want. It's like buying a cat in a bag," he commented.
"Europe's ability to act and its credibility are fundamentally put into question. Due to internal power struggles, the President of a region is taking all 28 EU States hostage. The debate going on in Wallonia has nothing to do with the topic discussed" said Manfred Weber, Chairman of the European Peoples' Party, the largest political group in the European Parliament.
"A failure would signal that Europe is closing in on itself and does not want to play a key role in the world economy anymore," concluded Weber.
Annual exports from Belgium to Canada are estimated at around 2 billion euro. About half the exports are pharmaceutical products, mainly from the Dutch-speaking Flanders' region. Diamonds are main imports from Canada to Belgium for the diamond industry in Antwerp which also lies in Flanders.
Analysts point out that EU trade agreements are not only complex and cumbersome but they also contain many non-trade issues like human rights, rule of law, good governance which shy away other nations and also provoke protests in Europe itself.
Analysts recall that after 20 years of negotiations, the EU-Gulf Cooperation Council Free Trade Agreement has been put on hold. The EU-India FTA negotiations launched in 2007 are also on hold. And there is growing popular opposition to free-trade deals such as the ongoing negotiations on Transatlantic Trade and Investment Partnership (TTIP) between the EU and US . Several European capitals have seen big demonstrations against TTIP which shows that citizens in Europe are more concerned than companies.
Reportedly, the EU has given the Belgian government until today (Monday) evening to approve the CETA. If Belgium fails to do so, the agreement will fall through.
European Council president Donald Tusk warned that CETA "could be our last free trade agreement, if we are not able to convince people that we negotiate to protect their interests." Analysts note that if CETA fails to pass through, this would strengthen the hands of the anti-EU camp in Europe who will step up their campaign that the EU is dysfunctional. (end) nk.tg