On Global Trade & Investment
Published Three Times a Week By:
The Global Business Dialogue, Inc.
Washington, DC   Tel: 202-463-5074
No. 62 of 2016
Filed from Portland, Oregon

Click  here for yesterday's quote from John Murphy of the U.S. Chamber of Commerce. 

"We are not against a treaty with Canada. But we won't have one that jeopardizes social and environmental standards and the protection of public services. And we want absolutely no private arbitration mechanisms." 

Paul Magnette
Minister-President of Wallonia
October 24, 2016 (Publication Date)
Canada and the European Union formally began negotiations on a Comprehensive Economic and Trade Agreement in May 2009. That was more than seven years ago. The two sides thought the deal was done, and the plan was for Prime Minister Justin Trudeau of Canada to fly to Brussels this week to sign the agreement. That is not going to happen. At least we don't think it will, as all of the evidence points in the opposite direction. 

The immediate sticking points - and perhaps the only obstacles to the signing ceremony - are the objections of Wallonia, whose leader, Minister-President Paul Magnette, has made clear that his region has problems with the agreement - reference today's featured quote - and he has rejected the notion of resolving those issues under the pressure of a signing-ceremony deadline.
It is ridiculous, the comments run, that little Wallonia - population 3.5 million - can block an agreement that would benefit the entire European Union - population 500 million. True, Wallonia's parliament is only one of five in Belgium that had to sign off on the deal, but it does account for half the area of the country and a third of the population. More to the point, it is a fair guess that there are a lot of raw nerves in Wallonia when it comes to trade and investment. In Gosselies, west of Namur, they are facing the closing of a Caterpillar factory and the anticipated loss of some 2,000 jobs. 
That's not Canada's fault, to be sure, but still, emotionally, it is part of the mix. Then there is the fact that some of Canada's successes in the agreement - greater access to the EU's markets for beef and pork - could be seen as threatening by Wallonian farmers.

So, the questions would seem to be: Can something still be worked out with Wallonia? Will that settle it? 
Any answers to such questions are guesses, nothing more. Our guesses are yes, to the first, something can and probably will be worked out with the Walloons; we don't know when. 
As to the second, even if an agreement can be signed, that will hardly be the end of the road. The deal would still have to be approved by the European Parliament and (we assume) by the Canadian Parliament. Normally, one would expect the difficulties in the former to be manageable and in the latter almost non-existent. After all, in Canada, they will be looking at an agreement that was negotiated by the Conservative government of Stephen Harper and completed by the Liberal government of Justin Trudeau
Who will object? Someone might. Looking back, there were many in Europe with qualms about the deal. As Canada's Financial Post recently pointed out:

"[I]n truth the Walloons weren't the only objectors. CETA got to the stage where it requires ratification by the Walloons precisely because its provisions were controversial enough, in various parts of Europe, that it was decided that not only the European Council and European parliament had to approve it, but also every relevant chamber in every member state."

Looking ahead, some in Canada are already wondering, "How does Brexit fit into all of this?" And saying to themselves, "After all, the lion's share of our (Canadian) exports to Europe go to the UK. Maybe the deal we should be doing is one with Britain." 
The point is that timing does matter, sometimes more than others, and for CETA it could matter a lot. With that in mind, we'll give Brutus and the Bard the last word: 

"There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries." 

Julius Caesar (Act 4, Scene 3)
Wallonia Holding Firm is a link to a Reuters story on the negotiations with Wallonia over the fate of the EU's pending trade agreement with Canada and is the source for today's featured quote. 

Caterpillar Closing takes you to a Wall Street Journal story on the closing of Caterpillar plant in southern Belgium. 

Long Live CUKTA is a Financial Post article which suggests that CETA is dead and that the real prize for Canada now is a trade agreement with the UK or CUKTA.
About CETA is the Wikipedia entry for this agreement.


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R. K. Morris, Editor