Centrum Stosunków Międzynarodowych - 25 October 2016: Failure of EU trade deal with Canada?

European Council President Donald Tusk asked Belgium to clarify its final position towards CETA by Monday evening. Yesterday, Belgium officially declared that it could not formally back the free trade deal due to its internal disputes. Two of the three regions in Belgium voted against the EU free trade agreement with Canada on Monday. Belgium's Prime Minister, Charles Michel, has failed at removing reservations against CETA at a meeting with leading regional politicians and Belgium can only sign the EU free trade agreement with the consent of all regions. The EU needs the permission of all member states of the EU in order for CETA to be approved.

Despite the rejection, Tusk remains positive and stated that CETA could still be signed as planned on Thursday, as there is still time to find a solution. Also Canada`s trade minister, Chrystia Freeland, remains hopeful that the deal might still be signed and said the deal is not dead yet. Canada`s prime minister, Justin Trudeau, did not immediately postpone or cancel his trip to Brussels this Thursday, where he was supposed to sign the treaty.

The EU`s failure to reach an agreement could also have consequences for potential Brexit trade deals with the EU, as some politicians see CETA as a model deal for Brexit. A failure to ratify CETA would call into question the EU`s ability to reach other agreements and it would also undermine its credibility. If CETA fails, similar deals with, for instance, the US or Japan will be likely to fail too.