Wallonia is a French-speaking region of southern Belgium and it alone is holding up a massive trade deal between the European Union and Canada.
Nearly all 28 EU governments support the Comprehensive Economic and Trade Agreement (CETA), but despite that, Belgium’s Wallonia, a region of 3.5 million people, has the power to derail the entire trade deal.
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Prime Minister Justin Trudeau is set to arrive in Brussels on Oct. 27 to sign the agreement, and International Trade Minister Chrystia Freeland is still “cautiously optimistic” about the agreement that would open markets between 500 million EU citizens and more than 35 million Canadians.
“[We] have the strong support of 27, I would 27.5, of the member states,” Freeland told reporters in Ottawa Tuesday “The European Commission is working very, very hard to get support in Europe for this agreement.”
“We are doing everything we can to support the European commission and its member states to get to a decision.”
Last week, Freeland sent a special trade envoy lead by Pierre Pettigrew, a former Liberal trade and foreign minister, to meet with Paul Magnette, Wallonia’s leader in the hopes of saving the deal.
“We have worked very hard in the last few months to bring reassurances that we in Canada share those same progressive views,” Pettigrew said Tuesday in Montreal.
Why is Wallonia holding out?
Under Belgium’s complex political system the country can only move forward with its support for CETA if all five regional governments agree.
Wallonia rejected the deal by a 46-14 margin on Friday, delaying the European Union’s ratification of the deal.
Some of the region’s fears are that its farmers would face steep competition from cheaper Canadian imports, particularly beef and pork. Activists and trade unions have also warned the Trans-Atlantic deal could diminish labour and environment standards.
“They feel threatened, particularly, when it comes to their agriculture commodities,” said Dalhousie University business professor Sylvain Charlebois.
“They feel Canadian commodities would be cheaper and some of their producers would be out of business.”
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Supporters of CETA have said the deal will improve trade, create jobs, and remove just about all tariffs and custom duties while at the same time guaranteeing European standards on anything from food and health quality to labour rights.
Dan Ciuriak, a consulting economist and former deputy chief economist at Foreign Affairs and International Trade Canada, said the Wallonia objections are about “protectionism.”
“The concerns are about the potential loss of jobs in agriculture and industrial materials,” Ciruiak told Global News. “This is traditional protectionist concerns about trade globalization and its impact on vulnerable sectors.”
Ciuriak added that Europe’s current period of slow growth has made some member states resistant to sweeping trade deals like CETA and the much larger Trans-Pacific Partnership.
“This has caught people by surprise and I don’t know how prepared the EU commission was for this,” he said. “The parties are moving to try and identify what proportion of the agreement can be applied provisionally, while the rest is hived off and addressed further.”
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Rejection of the deal has other member states worried about the EU’s ability to negotiate future trade deals.
“If we don’t agree with Canada, with whom are we going to agree?” Slovak Economics Minister Peter Ziga told reporters Tuesday.
Canada, under the previous Conservative government led by Stephen Harper, and the European Union first inked a deal in 2014 after seven years of negotiations. The agreement would eliminate tariffs on tens of thousands of products Canada sells to Europe. Supporters say it will bring some $12 billion into the EU economy per year.
Critics have said CETA would give multinational companies the ability to legally challenge European government policies in court which has been a major concern among EU states including Germany.
*With files from the Associated Press