Belgium reaches deal to back EU-Canada trade agreement

The Belgian government has reached a deal to back the free trade pact between the European Union and Canada that was originally supposed to be signed today. Prime Minister Justin Trudeau's trip is postponed until all of Belgium's regional parliaments approve a new declaration.

News revives hope for precarious agreement that was supposed to be officially signed today by Trudeau

Belgium's Prime Minister Charles Michel announced Thursday that a solution has been found to the regional impasse that left his country unable to sign on to the Comprehensive Economic and Trade Agreement (CETA) with Canada. (Yves Herman/Reuters)

A landmark free trade agreement between the European Union and Canada could be signed within days after the Belgian government overcame an impasse with its regional authorities on Thursday.

​Belgian Prime Minister Charles Michel said his national government had reached a deal with the holdout region of Wallonia. The region held a veto over the country's ability to back the trans-Atlantic trade agreement. And the EU, in turn, needed unanimity among all its members.

The deal will go through regional legislatures by Friday night.

Canadian Prime Minister Justin Trudeau had been due to travel to Brussels on Thursday to sign the deal, but those plans were effectively scrapped as the negotiations with Wallonia dragged on.

Still, getting the agreement was a huge relief for EU leaders, who had started negotiating the pact with Canada seven years ago and were embarrassed by the last-minute stumble.

"This is good news," said Michel, adding that the new text of the deal provides guarantees for farmers and on a corporate dispute settlement system that "will allow us to sign the deal."

EU President Donald Tusk said he would contact Trudeau "only once all procedures are finalized for EU signing CETA," as the trade deal is called.

Both sides want to avoid a situation where a signing ceremony is rescheduled and then regional legislators find new reasons to vote against the deal.

"It's important for people to appreciate that while today... we absolutely had a positive development, there are still many steps to be taken and I want to be sure that Canadians appreciate that even after signing, the process will not yet be complete," International Trade Minister Chrystia Freeland said.

Beyond the Belgian regional parliaments backing the agreement, the declaration must be vetted by the 27 other nations. The EU's committee of permanent representatives is meeting Thursday.

The premier of the Flemish region, Geert Bourgeois, said the original 1,598-page text of the trade deal stood.

"This is a clarification, the actual treaty does not change," he said.

Canada has already agreed to a binding declaration to answer concerns raised by others, notably Austria, principally setting out the right of governments to regulate.

Resistance brought results: Wallonia

Politicians in Wallonia, which has a population of 3.6 million compared to more than 500 million for the whole EU, argued that the proposed accord would undermine labour, environment and consumer standards.

Paul Magnette, the minister-president of Wallonia, claimed victory Thursday after a declaration was drafted to respond to concerns his region had raised over CETA. (Yves Herman/Reuters)

Giving a voice to millions of Europeans who oppose the deal for a wide variety of reasons, Wallonia President Paul Magnette said his resistance yielded huge results.

"We always fought for treaties that reinforced the social and environmental standards, protect the public services and that there is no private arbitration" in dispute settlements, he said. "All this is achieved as of now."

I am sorry for all the other Europeans we made wait and for our Canadian partners. But if we took a bit of time, what we achieved here is important, not only for  Wallonia  but for all Europeans.- Paul Magnette , Wallonia president

"I am sorry for all the other Europeans we made wait and for our Canadian partners. But if we took a bit of time, what we achieved here is important, not only for Wallonia but for all Europeans," Magnette said.

Proponents of the deal say it will yield billions in added trade through customs and tariff cuts and other measures to lower barriers to commerce. At the same time, the EU says it will keep in place the region's strong safeguards on social, environmental and labour issues.

Magnette said Wallonia's insistence on a better deal would bolster EU standards and set a precedent for other trade talks between Europe and trading partners like the United States or Japan.

European Commission spokesman Margaritis Schinas was asked Thursday whether the EU had offered any additional funding to Wallonia in return for today's compromise. Rumours had been circulating for days that some kind of bribe would be offered to bring the Walloons around.

Schinas appeared to refute those rumours, saying that funds are allocated on a long-term basis based on specific criteria.

Steps to ratification

Should the signing ceremony proceed over the next week, the next step is a review and ratification vote in the European Parliament. 

A positive outcome there is not guaranteed — a significant minority of members have indicated concerns and votes in this legislature can be unpredictable.

Trudeau's cabinet ratifies the agreement in Canada. Parliament, as well as provincial legislatures, need to pass implementation legislation to make the necessary changes to various laws affected by CETA's measures. 

Because the provinces were at the table with the federal government throughout the negotiations, and signed off on the final text, regional objections are not expected to derail the deal the way they did in Belgium. 

Once all this is complete, CETA may be provisionally applied early in 2017.

But the European Union has yet to clarify exactly which aspects of the deal could take hold right away, and what portions must wait for ratification, not only in the 28 member state parliaments, but additional regional parliaments as well.

Demonstrators continued to protest outside the European Commission headquarters in Brussels Thursday. They argue Canada's trade deal paves the way for more controversial talks with the United States. (Yves Herman/Reuters)

Thursday's declaration in Belgium makes it likely that CETA's controversial new investor court system will not be provisionally applied. Further debate is expected on those measures in individual member states of the EU.

Maude Barlow, president of the Council of Canadians, which has lobbied vigourously against the deal and especially its investor arbitration system, called this a "major victory" and suggested the regional legislatures would never agree to ratify this part of the deal.

"It is long past time to do away with these investor-state dispute panels and courts that give superior rights to foreign investors," she wrote in an email to CBC News. "If nothing else, the resistance to CETA has had this breakthrough."

The European Court of Justice will rule in the coming months on exactly who has the jurisdiction over this issue — the European Commission or individual countries. Belgium's declaration Thursday said it will explicitly ask this court to rule on whether the investment protection system is in line with EU rules, as Wallonia continues to express reservations. 

The NDP asked Freeland during Thursday's question period whether Canada would consider simply stripping out the controversial investor court provisions.

MP Tracey Ramsay said "Europeans want this deal fixed."

"I am astonished that the NDP cannot get behind a deal that today has the full support of all progressives across Europe," the minister replied.

With files from Janyce McGregor, Reuters