Tuesday 18 October 2016 4:47 pm

Brexit deal and EU trade policy in the spotlight as EU-Canada deal falters

The EU’s entire trade policy was brought into question today after political squabbling looked set to cast another delay to the landmark EU-Canada free trade agreement.

Following a regional parliament in Belgium voting against the deal last week, trade ministers from the other 27 EU countries were forced to issue an ultimatum to the Belgian government in a last-ditch attempt to keep the agreement on track.

Belgium will now have until the end of the week to address the concerns of Wallonia – a region in the south of Belgium which represents 3.6m people – after it expressed concerns about legal protections for Belgian farmers.

The arguments will now overshadow the two-day EU heads of state summit, which kicks off on Thursday, and raises doubts over whether a signing ceremony with Canadian Prime Minister Justin Trudeau at the end of the month will go ahead.

Cecilia Malmstrom, the powerful EU trade commissioner who was responsible for agreeing the final stages of the deal which has been in the making since 2009, added: “If we can’t sign a very good agreement with a country like Canada, one of our closest allies … the rest of the world will ask themselves: is Europe a reliable partner?”

Experts also suggested the deal throws big question marks over the EU’s entire trade strategy, particularly with negotiations over a deal with the US ongoing and possibly the most complicated negotiation in trade history between the UK and the EU looming.

“The stalling of the EU-Canada trade deal after more than five years of negotiations augurs ill for the Brexit deal,” said Robert Ward, editorial director of the Economist Intelligence Unit.

Open Europe’s acting director Stephen Booth told City A.M.: “This is more than just an embarrassing hiccup. The concern is that it’s more fundamental than that. It is the latest of many signals that globalisation and free trade is under increasing political pressure and the EU is finding it very difficult to get these deals done.”

Allie Renison, head of trade policy at the Institute of Directors said: “We are in unchartered waters here when it comes to the future of EU trade policy.

“Part of the problem stems from the EU setting its own artificial deadlines and timetables … the other part stems from the EU Commission's power grab on competence over investment policy.”

She added: “EU trade policy is headed down an increasingly fractious path.”