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TRADE WARS
Canada-EU failure signals more bad news for free trade deals
By Jeremy TORDJMAN
Washington (AFP) Oct 23, 2016


Belgian region rejects EU 'ultimatum' over Canada trade pact
Brussels (AFP) Oct 23, 2016 - Belgium's Wallonia region on Sunday dealt a fresh blow to a proposed EU-Canada trade deal, rejecting a 24-hour ultimatum from the bloc to end its objection to the agreement.

In an embarrassment for the 28-nation EU, Belgium has so far been the only member not to sign up to the CETA trade deal, blocked by French-speaking Wallonia, which has refused to endorse it.

The EU has warned that unless Belgium makes its position clear, it will cancel a summit on Thursday to sign the accord with Ottawa, and indicated that it expected Prime Minister Charles Michel to come up with an answer on Monday.

Paul Magnette, the leader of the Wallonia region, told the Belga news agency that an "ultimatum is not compatible with the exercise of democratic rights".

Magnette hit out at the EU, despite efforts by the bloc to provide reassurances to his government over investment protection -- one of the major sticking points in negotiations between Brussels and Wallonia.

One European diplomat said that the reassurances "responded to all of Mr Magnette's concerns".

A European source said European Council President Donald Tusk would call Michel on Monday afternoon or evening to see if the deal can be salvaged.

Tusk will ask Michel "one simple question: will Belgium be in a position to sign the agreement on Thursday, yes or no?" said the European source.

The EU Council chief will also call European Commission President Jean-Claude Juncker "to share an assessment of where we are," and lastly Canadian Prime Minister Justin Trudeau "to decide whether to maintain the summit".

"Regarding Thursday, if Belgium is not in a position to say that they guarantee they can sign, it's very clear for Tusk that it doesn't make sense to have a summit, and there will be no summit, and there will be no date set for a new summit," the source said.

The source added that any decision would be made jointly by Tusk and Trudeau.

Canada's trade minister Chrystia Freeland flew home from Brussels Saturday saying the ball was in the EU's court after talks on Friday failed to overcome the differences.

- 'Stop bad trade treaties' -

The CETA -- or Comprehensive Economic and Trade Agreement -- would link the EU market of 500 million people with the world's tenth biggest economy.

The deal is opposed by anti-globalisation groups who say it is a test model to push through an even more controversial EU-US trade agreement called TTIP, talks on which have also stalled.

Sebastian Dullien, a senior policy fellow at the European Council on Foreign Relations, criticised the Commission for its role in the failure of negotiators to secure an agreement on the deal.

"The European Commission carries part of the blame because it didn't quickly seek a dialogue with doubters. And for this type of deal, you need a large consensus," he said.

Wallonia has some support for its position elsewhere in Europe.

On Saturday, 8,000 people including young people, farmers, union leaders and entrepreneurs joined a rally in Amsterdam in a show of solidarity, organisers said.

They held banners saying "Our world is not for sale" and "Stop these bad trade treaties".

Wallonia has also enjoyed support from activist groups like Greenpeace which charged that the deal risked satisfying "corporate greed" and trampling on people's rights and health standards on both sides of the Atlantic.

British Prime Minister Theresa May on Friday dismissed warnings that the EU-Canada deal raised serious questions about whether London could strike a similar agreement with the bloc after Brexit.

The collapse of free trade talks between Canada and the European Union Friday is yet another sign of increasingly stiff resistance to economic globalization.

Despite seven years of talks between Ottawa and Brussels, the CETA Treaty crashed into a wall Friday after being rejected by the Belgian region of Wallonia, making it impossible for the European Union to approve the deal.

That was an ominous sign for another ambitious treaty, the Transatlantic Trade and Investment Partnership between the United States and the EU, which also faces strident opposition on both sides of the Atlantic.

And one huge deal already struck, the Trans Pacific Partnership between the United States and 11 other Pacific Rim countries, is foundering because of the refusal so far of the US Congress to ratify it.

And now, both candidates for the White House, Democrat Hillary Clinton and Republican Donald Trump, say they do not support the treaty.

It is a sharp reversal of a quarter-century since the fall of the Berlin Wall of support in the world's leading economies for freer trade and globalization. Now, the enthusiasm for breaking down borders appears to be fizzling out.

"We are seeing the results of several decades of failures by political leaders to take the concerns over trade seriously," said Edward Alden of the Council on Foreign Relations in Washington.

For many years accusations have mounted that the progressive breaking down of trade barriers and removal of import duties in advanced economies has caused deindustrialization and huge job losses to developing countries.

"We're seeing a backlash caused by that neglect for the losers from trade," said Alden, author of the book "Failure to Adjust: How Americans Got Left Behind in the Global Economy."

Debra Steger, a former Canadian negotiator at the World Trade Organization, sees a rising tendency to blame a country's economic problems on foreigners.

"People are blaming it all on immigrants or goods coming into the country," she told AFP.

"They want to blame it on something that's coming from outside, not on technological changes or on bad national policies."

Frightened by Britain's vote in June to withdraw from the European Union and the success of Donald Trump's protectionist speeches, the world's economic leaders have in recent months sought to blunt the attack on globalization.

Meeting in Washington earlier this month, the finance ministers of the G20 leading economies admitted as a group that economic growth has not been "equitable" and that more needs to be done to spread the benefits of lowered borders.

A different kind of globalization is needed than the one of the recent past, they said.

It's not clear if their message is going to convince European and US opponents of TTIP. Europeans especially say the proposed treaty will erode environmental and health standards to the benefit of multinational businesses.

Another key issue is that the trade deals -- TTIP, TPP, CETA -- all propose to include an extraterritorial dispute settlement mechanism for companies to litigate complaints against countries where they invest.

That was a particular complaint in the CETA case. Wallonia enjoyed support in fighting the deal from activist groups like Greenpeace which charged that the deal risked satisfying "corporate greed" and trampling on people's rights and health standards on both sides of the Atlantic.

Another problem is that the proposed treaties -- which gained momentum after the most recent round of global free trade talks under the WTO failed -- have been carried out with little transparency for the hugely important and complex issues involved.

For TPP and TTIP, talks were to produce a final deal without interference before the details were revealed for ratification as a whole.

"There's been a lack of transparency, a lack of explanation, and a lack of consultation with the public," said Steger, now a economics professor at the University of Ottawa.

She said the process often leaves legislators and the public with a fait accompli.

"At the end of the negotiations, when the agreement is all finished, that's the first time that the public is told: 'oh, we have an agreement. It's 2,000 pages long and you have to approve it.'"

"It can't work this way," she said.


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