World Economy

EU to Delay CETA Verdict

EU to Delay CETA VerdictEU to Delay CETA Verdict

European Union governments will probably refrain on Tuesday from giving their verdict on the EU’s draft trade agreement with Canada because more time is needed to overcome a political split in Belgium, the bloc’s commercial-policy chief said.

Trade ministers from the 28-nation EU will have a “stock-taking” meeting on the Canada accord while efforts continue to address concerns in Belgium’s French-speaking southern region of Wallonia, Cecilia Malmstroem said. The pact needs the backing of all EU governments as well as the European Parliament to take provisional effect in 2017, Bloomberg reported.

“I’m not sure we’ll be able to make a decision, but hopefully we’ll move forward and we can make a decision very soon,” Malmstroem, the EU’s trade commissioner, told reporters on Tuesday before the ministerial meeting in Luxembourg. “There are still some countries or parts of countries who are not yet there.”

 $13b Output at Stake

At stake is an accord known as the Comprehensive Economic and Trade Agreement, or CETA, that the EU says would boost its economic output by about €12 billion ($13 billion) a year and expand EU-Canada trade by about a quarter. Beyond that, any collapse of CETA, which took five years to negotiate, would take the steam out of a series of separate free-trade talks that the bloc is pursuing with the US, Japan and other countries.

The UK plan to leave the EU will hover over the Luxembourg meeting because trade is a core European policy and the bloc’s push over many years to use its economic weight to open markets worldwide has been a central argument for the merits of membership. Should the EU falter in ratifying the deal with Canada, the bloc risks losing credibility both with global partners and with a host of its own trade-friendly member nations long allied on commercial matters with Britain.

Wallonia wants CETA reopened to add safeguards. The stance is tying the hands of the Belgian federal government, which is in favor of CETA.

Germany’s Economy Minister Sigmar Gabriel dismissed the prospect that the EU-Canada pact could collapse.

“I don’t think the agreement can fail,” Gabriel told reporters before the Luxembourg meeting. “A little more time is needed.”

Some room for compromise may be offered through a declaration that the European Commission, the EU’s executive arm in Brussels, has been drafting to accompany the trade deal. On Oct. 5, commission President Jean-Claude Juncker said the declaration would soothe unease over CETA in some EU nations.

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