Ceta talks: EU hopes to unblock Canada trade deal

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Canada's Chrystia Freeland and Martin Schulz and speaking at the European parliament in Brussels, Belgium, 22 October 2016Image source, EPA
Image caption,
Canada's Chrystia Freeland and Martin Schulz agreed the ball was in the EU's court

The European Parliament president says he is optimistic that a free-trade deal between the EU and Canada can be signed soon despite last-minute obstacles.

Objections by a Belgian region, which opposes the deal, "are for us Europeans to solve", Martin Schulz said.

He was speaking after meetings in Brussels with Canadian Trade Minister Chrystia Freeland and the head of Belgium's Wallonia region.

Ms Freeland said: "It's time for Europe to finish doing its job."

After seven years of negotiations on the Comprehensive Economic and Trade Agreement (Ceta), talks broke down on Friday.

This followed a rejection of the deal by Wallonia. Exercising its right under the Belgian federal constitution, it called for clarity on safeguards to protect labour, environmental and consumer standards.

The deadlock has called into question the EU's ability to make trade deals. All 28 EU member states support the agreement, which was to be signed next week.

Media caption,

Belgium's French-speaking region is single-handedly blocking an EU trade deal

On Saturday Mr Schulz held meetings with Paul Magnette, the head of the Walloon government, and Mrs Freeland.

Afterwards he told reporters that the emergency talks have given him "much reason for optimism about the positive conclusion of Ceta as soon as possible."

He added: "I am convinced that, by fully addressing the last remaining concerns, we can turn the apparent European division on Ceta (...) into a victory for every participant."

"The ball is in Europe's court," Ms Freeland said. "We hope that it is possible to find a solution."

What is Ceta?

Canada and the EU would eliminate 98% of tariffs under Ceta, which was negotiated over five years between 2009 and 2014.

Supporters say this would increase trade between them by 20%.

Critics argue that the deal lowers product standards and protects big business, allowing corporations to sue governments.

Why does success hinge on one small region?

Wallonia is a region of just 3.6 million people. The EU as a whole has a population of 508 million while there are 36.3 million Canadians.

Image source, EPA
Image caption,
Paul Magnette (C) leads Wallonia's opposition to the deal

Belgium's constitution stipulates that each of its regional governments must back the deal before the federal government can sign it.

Wallonia has remained opposed to Ceta, seeing it as a threat to farmers and welfare standards.

The French-speaking region has a strong socialist tradition. Its fears echo those of anti-globalisation activists, who say Ceta and deals like it give too much power to multinationals.

There have also been big demonstrations in several EU countries against Ceta and the TTIP trade talks between the EU and the US.

How big a deal is this for Canada?

The deal was finalised under the former Conservative government but is a major priority for the Liberals, who are under pressure to boost the country's economy, the BBC's Canada editor Jessica Murphy writes.

They dispatched special envoy Pierre Pettigrew, a former cabinet minister with a wealth of experience in international trade, to help save the flagging agreement.

Federal Trade Minister Chrystia Freeland has repeatedly met European leaders in recent months to shepherd it through.

On Friday, she said agreement now seemed "impossible".

How does the EU look now?

The failure to clinch the EU-Canada Ceta deal is an embarrassment, writes Laurence Peter, the BBC website's EU analyst.

The European Commission insists Ceta is not over but it also refuses to unpick the massive text.

Chances of any EU free trade deals with the US, China or India now look remote. Anti-globalisation groups, anxious to protect Europe's welfare and environmental standards, may feel they are winning the argument.

For now, any Ceta boost for small businesses and jobs has been postponed.

Are there lessons for Brexit?

A very obvious one is that it is going to be difficult for the EU to implement trade and investment deals, perhaps with anyone, writes Andrew Walker, the BBC's economics correspondent.

For the UK post-Brexit, it suggests two contrasting implications:

  • Negotiating a trade agreement that gives British exporters barrier free access to the EU's single market could be a huge challenge. For sure, there will be some important differences. For the EU, Britain is a more important export market than Canada, so some EU states will have a good deal to lose from failing to agree. But securing the agreement of all of them is unlikely to be straightforward
  • On the other hand, negotiating an agreement with other countries outside the EU should become easier. To put it bluntly, the British government will not need to care what the Walloon parliament, for example, thinks