The European Union and Canada have finally signed a protracted free trade agreement that will see them open up their respective markets to more competition with hopes of driving growth and generating jobs.
The trade deal was signed in Brussels on Sunday by Canadian Prime Minister Justin Trudeau and heads of EU institutions, including European Council President Donald Tusk, European Commission President Jean-Claude Juncker and Slovakian Prime Minister Robert Fico.
The signing of the Comprehensive Economic and Trade Agreement (CETA), which required the approval of all 28 EU countries, had previously been called off after Wallonia in southern Belgium decided to prevent its approval by the small European country through the use of veto power. The French-speaking minority of only 3.6 million people was concerned over increased competition in the agricultural sector.
Wallonia, a region which has lost a substantial number of industrial firms, withdrew its veto after the country’s government promised to protect farmers, among other concessions. This cleared the road for approval of the deal by regional parliament on Friday.
“Today’s decisions demonstrate that the disintegration of the Western Community does not need to become a lasting trend,” Tusk said. “Free trade and globalization have protected hundreds of millions of people from poverty and hunger. The problem is that few people believe this.”
The pact still has to be ratified by the legislature of each member state, giving room for opposition to further protest against it. It will cut tariffs on industrial goods as well as on farm and food items once ratified. It will also open up certain areas of the services sector, including finance and cargo shipping.
Some believe that the CETA deal in a way clears the road for a larger deal with the United States called the Transatlantic Trade and Investment Treaty (TTIP). Talks on the bigger deal have virtually stalled, with certain politicians in Germany and France describing it as dead. The proposed deal has been a major bone of contention with labor unions and other groups.
Protesters believe these deals will mainly protect the investments of multinational companies. Europeans, like many Americans, fear that domestic jobs and wages could be negatively impacted.
Several dozens of anti-globalization activists protested outside the venue of the CETA signing on Sunday, clashing with police and hurling red paint at the building.
CETA advocates, on the other hand, say the trade deal will boost volume of Canadian-EU trade by 20 percent, as reported by Reuters. It will also add €12 billion ($13 billion) and C$12 billion ($9 million) to the EU and Canadian economies respectively each year.
The trade agreement will enable Canada to reduce the level of its reliance on the U.S. as an export market. The country will be able to send more beef, pork and wheat to the European market.
The EU may also see the deal as a boost to its ability to still be able to make deals, having recently been hit by Britain’s decision to leave the bloc.
Partial implementation of the deal could begin early next year, if approved by the European parliament. This, Trudeau said, would unlock 98 percent of the agreement’s key measures.
Full implementation requires approval by both national and regional parliaments.
P-Value October 31st, 2016
Posted In: P-Value News