A small French autonomous region in southern Belgium appears set to sink a multi-trillion dollar agreement between the European Union and Canada. Canada's trade minister, furious, has left Belgium entirely, firing off a blistering statement, slamming Europe's inability to ink a deal "even with a country as nice and as patient as Canada."
The deal, which could boost trade between the two countries by more than $25 billion per year, had moved relatively swiftly since both sides signed an agreement in principle in 2013.
But now, things appear to be falling apart. Chrystia Freeland, Canada's minister of international trade, stormed out of the negotiating room in Belgium after marathon negotiations with the regional government of Wallonia.
A year ago, Ottawa seemed sure that, after tough negotiations, the Comprehensive Economic and Trade Agreement (CETA) would get ratified.
But Wallonia, an autonomous region within Belgium, is likely the last hold-out in Europe, and could be the deal's undoing.
That also spells bad news for the Transatlantic Trade and Investment Partnership (TTIP), the sister deal between America and Europe. CETA was seen as a test drive for that agreement, but between Brexit, growing isolationism at home, and the organized effort to kill CETA in Europe, optimism is fading for an American version of the deal.
Speaking with reporters outside of the Walloon parliament, a visibly upset Freeland appeared to have given up hope that the deal will be done at all.
"Canada has worked, and I personally have worked very hard, but it is now evident to me, evident to Canada, that the European Union is incapable of reaching an agreement—even with a country with European values such as Canada, even with a country as nice and as patient as Canada," Freeland said. A copy of the remarks was later sent to journalists.
"Canada is disappointed and I personally am disappointed, but I think it's impossible. We are returning home. At least I will see my three children tomorrow at our home," she added.
Since being elected last year, Prime Minister Justin Trudeau has tasked Freeland with doing the heavy lifting to get the deal done. She has jet-setted across Europe, sitting down with skeptics of the deal in Germany and Bulgaria, amongst others, to allay their concerns.
Now, at the 11th hour, the tiny regional government of Wallonia, with a population smaller than that of Alberta, is set to destroy the deal.
"At this point, I have the feeling that there is a will to continue," said Paul Magnette, the premier of Wallonia, just prior to the breakdown in negotiations. "There are new, significant advances that we've made, notably on agriculture. In coming back, there remains difficulties for us, particularly when it comes to arbitration."
Magnette is a member of the centre-left Socialist Party, a pan-European political movement that has been skeptical of the investor-state arbitration process set out in CETA.
Elio Di Rupo, former prime minister of Belgium and current president of the Belgian Socialist Party, blasted the deal after negotiations broke down. Di Rupo said the deal would undercut public services, give too much power to American multinationals, and hurt environmental protections.
The Walloon concern that the deal may undercut public services has been denied by both sides.
"EU Member States will be able to keep public monopolies for a particular service if they want to," reads a briefing from the European Commission. "CETA will not force governments to privatise or deregulate public services like the water supply, health or education. EU Member States will continue to be able to decide which services they want to keep universal and public and to subsidise them if they want to."
Canada, meanwhile, has respond to skepticism in the process by adding new transparency measures to the process.
Critics contend that the dispute resolution process would allow corporations to sue local governments, giving them a path to fight against environmental regulations or labour laws.
The process, however, is nothing new. Canada and Europe are already subject to more than one international dispute resolution panel, and have been sued by corporations for anti-trade practises—sometimes successfully, and sometimes not.
In one 2010 case that was held up as an example of these panels' faults, the Philip Morris cigarette company sued Uruguay for implementing plain packaging requirements. However, the tribunal ruled in favour of Uruguay, and ordered Philip Morris to pay $7 million to the government to cover their legal fees.
One of the main reasons Wallonia is so dead set against the deal, and why its parliament voted by a large majority to reject the deal, is because its farmers would have to compete with Canadian beef and pork.
There is still a path forward for the deal, but it is murky. Today is the deadline for the deal, and it is unclear how the deal will proceed once it passes.
The European Commission has spun the disastrous end to the negotiations as a "pause," with commissioner president Jean-Claude Juncker vowing: "I'm not despairing, as we're going to find a solution in the coming days with our Walloon friends," according to European media.
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