EU bows to pressure, gives member parliaments say in Canada trade deal

Brussels | Reuters –– The European Commission bowed to pressure to give Europe’s parliaments the right to ratify a landmark free-trade deal with Canada, a decision meant to address public concerns but which could wreck Europe’s broader trade strategy.

In the face of popular suspicion about secretive trade deals benefiting big companies, Commission President Jean-Claude Juncker retreated from his position that the multi-billion-euro pact would only need support from European Union governments and the European Parliament to go ahead.

“I have looked at the legal arguments and I have listened to heads of state or government and to national parliaments,” Juncker said in a statement on Tuesday. “The credibility of Europe’s trade policy is at stake.”

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The 1,600-page text, which goes beyond tariffs to reduce transatlantic barriers to business, will now be sent to each of the EU’s 28 national parliaments, and in some cases, such as Belgium, to regional parliaments as well.

Requiring national parliamentary approval for the agreement, first envisaged in 2009, raises the risk it will never be implemented.

Proponents say it could increase bilateral trade by a fifth to 26 billion euros (C$37.3 billion). But many EU voters have turned against free trade since the global financial crisis, fearing that giving multinationals unfettered access to European markets will destroy jobs.

Italy’s industry minister, Carlo Calenda, warned the agreement was in danger and predicted a far bigger trade deal with the U.S. would collapse, too.

“I think (the U.S. deal) will fall through, and the agreement with Canada is at risk of doing the same. We have been negotiating it for too long,” Calenda said in Rome.

The Commission, the EU’s executive, said it still hoped the deal with Canada could be signed at an EU-Canada leaders’ summit in October, allowing it to come into effect.

As the most ambitious trade agreement the EU has negotiated so far, the accord encompasses financial services, shipping, sustainable development and access to government tenders, as well as food and industrial goods.

But EU Trade Commissioner Cecilia Malmstrom conceded the deal had fallen victim to wider concerns about the impact of globalization and whether foreign companies were too powerful. She blamed EU governments for failing to stand up for the trade deals they had agreed the European Commission should negotiate.

“The risk to EU trade policy is that member states infect this debate by confusing the content of the agreement with the general malaise and anti-globalization feelings,” Malmstrom told a news conference. “Instead of addressing this, the questions and concerns of the citizens are used to boost these feelings.”

— Robin Emmott is a Reuters diplomatic correspondent in Brussels, covering EU foreign affairs. Additional reporting for Reuters by Isla Binnie in Rome.

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