So, according to several reports, including a quite comprehensive one from the Canadian Press, the Comprehensive Economic and Trade Agreement, as the Canada-EU free(er) trade deal is officially known, is just about dead ~ on life support, at best ~ while Wallonia, a French speaking region of Belgium tries to extract further concessions, in part from Canada but largely, I think from the EU, itself. Paul Magnette, the Minister-President of the Belgian region of Wallonia, rather like a Canadian province, said that “We made new significant progress, especially on the agriculture issues, but difficulties remain, specifically on the symbolic issue of arbitration, which is politically extremely important.” I think it’s important to understand that Wallonia is a stalking horse for a much, much larger, French led, protectionist (anti-globalization) movement that wants to shut the doors to global trade. The movement is not uniquely French, by any means, it is just especially strong there .. it also exists in Canada and America and, indeed, anywhere where one group, farmers, for example, have traditionally enjoyed special protection from competition. Protection of farmers was, in fact, one of the driving forces behind creating the EIU in the first place and who can forget the “mountains of butter” and “lakes of milk?”
As it now stands the Canadians, led by our rookie, celebrity Trade Minister Chrystia Freeland, who seems quite upset in the video in the (linked, above) CBC article, have “walked out” of the negotiations. This is the right tactic for now, for this phase of the operation; Canada has done all it could, including having made concessions; now it is up to the EU to bring Wallonia onside and save this deal.
This deal, and the bigger US-EU trade deal which will, almost certainly die if CETA cannot be managed, are essential to the EU: they need North America more than we need it and Chancellor Merkel and President Hollande and all the others know that … somehow, Hollande et al need to placate their rabidly protectionist populations AND sign free(er) trade deals. As EU President Donald Tusk said Thursday, the EU must convince people that trade agreements, specifically this CETA, are in their interest, or, “I am afraid that CETA could be our last free trade agreement.” Free(er) trade is vital to Europe because, as The Telegraph reports, “The European Central Bank is becoming dangerously over-extended and the whole euro project is unworkable in its current form, the founding architect of the monetary union has warned … “One day, the house of cards will collapse,” said Professor Otmar Issing, the ECB’s first chief economist and a towering figure in the construction of the single currency.” Europe must grow its economies to increase its overall prosperity and most thinking Europeans understand that free(er) trade, with North America and with Asia, is they key to that.
The CETA will benefit Canada … but it is essential to save the EU.
So, for now, Canada watches from the sidelines as the EU gets its own house in order or contemplates self destruction. But, it is vital to understand that walking away is just a temporary tactic; the correct strategy is to push the CETA (and the TPP, and free)er) trade with China) through to completion, and I remain unconvinced that Minister Freeland is ready or able to do that.