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October 27, 2016


Trudeau stays home

Yesterday was another rollercoaster day with an agreement on Ceta just around the corner. Some journalists tweeted that the two sides had already reached agreement, and that it was only now a matter for the lawyers. Jean-Claude Juncker said in the European Parliament in the morning that there would be an agreement during the day. It reminded us of June last year when Commission officials announced almost hourly that a deal with Greece was around the corner. 

The Belgians were negotiating among each other last night, and broke off at 11pm to resume talks this morning at 10am. The official line is that they needed to check some legal documents, but we are hearing that there are, at this point, still genuine disagreements. La Libre Belgique quotes one of the participants that it would be wrong to deduce that an agreement is on the table. Canada's prime minister Justin Trudeau had his plane ready to take off but, when the news came, he decided not to fly. The patient Canadians are now saying that the Europeans will have to agree among themselves first. 

One of the sources quoted by La Libre notes that the optimism that was spread yesterday may had the effect of strengthening the resistance in the Walloons back in Namur, the region's capital. These are the five issues the Walloons are demanding:

  1. to ensure that agreement to the provisional application of Ceta does not prejudice the ratification process - Belgium says it may not ratify (Germany extracted the same concession after the Constitutional Court judgement);
  2. the ability to withdraw from Ceta after ratification;
  3. a guarantee that the investor state dispute settlement (ISDS) procedure turns into a true international court - with no remnants of private-sector justice where judges get paid by corporations plus facilitated access to the tribunal by small and medium sized companies;
  4. protection guarantees in the agricultural section for both European consumers and producers; 
  5. specific exclusion from Ceta of personal services and social insurance systems.

Tagesschau in Germany is asking why are not just take the ISDS section out of the treaty - a question we have been asking ourselves.

We would only expect a complete failure of Ceta if Wallonia took the view that the treaty itself needs to be amended. The demands as listed above come pretty close to a treaty revision, and may not be easily met through clarifications. We would still expect both sides to agree eventually but, even after an intra-Belgian agreement, there is still some work to do before the EU and Canada can formally sign off on the early application of the deal. If there is an agreement - even as early as today - it would still be hard to undo the reputational damage to the EU. Ceta is probably the last mixed treaty. After this debacle we see no chance that TTIP could pass. We noted yesterday that the Australians are also now thinking about a narrower EU-only trade agreement. And the implications for Brexit remain unchanged.

The approval ratings for Ceta in Belgium are extremely low - in the low teens - which is why the position of the Walloon PM Paul Magnette has broad public support. Triggering the failure of the EU/Canada summit is already a big symbolic victory for him. Given the degree of publicity about Ceta, people will look at the details of the agreement, and will judge what has been agreed against the five demands. Le Libre notes that there are also disagreements within the parties of the two francophone regional PMs. Elio di Rupo, president of the PS in Wallonia, is said to take an even harder line than Magnette, and the same goes for the conservatives who are running the francophone Brussels region. 

Our other stories

We also have stories on the decline of the Dutch Labour party; on the ECB's and the Commission's evaluation of the Spanish bank rescue; on the warning letters from Brussels to Portugal and Spain; on trench warfare within the French Socialist party, and who benefits from it; on the Greek court delivering a severe blow to the government on interim solutions towards a hard Brexit; and on a diplomatic controversy over the refuelling of Russian warships in Spain.

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