Italy threatens to scupper EU-Canada free trade deal | Business| Economy and finance news from a German perspective | DW | 14.06.2018
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Italy threatens to scupper EU-Canada free trade deal

The new government in Rome is walking in the footsteps of Donald Trump's trade protectionism, as it has threatened to torpedo the CETA trade agreement because it doesn't protect Italy's farmers and their products.

Italy's new agriculture minister Gian Marco Centinaio said on Thursday that the government wouldn't ratify the Comprehensive Economic and Trade Agreement (CETA) with Canada — the EU's first major free trade deal since 2011.

In an interview with Italy's daily La Stampa, Centinaio said CETA didn't ensure sufficient protection for the country's speciality foods.

"We will not ratify the free trade treaty with Canada because it protects only a small part of our PDO [Protected Designation of Origin] and PGI [Protected Geographical Indication] products," Centinaio told the newspaper. "Doubts over this agreement are shared by many of my European colleagues," he added.

Read more: Saving Italy's truffles (not the chocolate kind)

The treaty did enter in force on a provisional basis in September 2017, doing away with tariffs on a large number of goods and widening access to Canadian beef in Europe and EU cheese and wine in Canada.

Read more: EU, Canada must lead world economy says Trudeau after CETA approval

CETA advocates have stressed the treaty will likely boost bilateral trade by 20 percent and may add €12 billion ($14 billion) to the EU economy and $9 billion to Canada's. For CETA to come into full effect, all 28 EU member states must approve the agreement.

Counterfeit risks

Within the EU, Italy produces the most food products with PDO and PGI labels — among them Parmigiano Reggiano cheese and Prosciutto di Parma ham. Under CETA, Canada only recognized slightly more than 40 Italian labels out of a total of 292 existing in Italy.

Watch video 02:14

CETA deal triggers renewed protests

Italy's association of agricultural companies, Coldiretti, has acknowledged that CETA has the potential to triple last year's food exports of €41 billion, but says that there is a serious risk of international food counterfeiting of Italian products.

In a statement on Thursday, Coldiretti backed Centinaio's decision, saying CETA was "wrong and risky" for Italy. The association also pointed to risks posed by the annulment of duties on Canadian wheat — a country where the controversial weed killer glyphosate is widely used.

Additional comments from Italy's new government — made up of the far-right League and the anti-establishment Five-Star movement — were not immediately available. But the two parties' government program pledges to oppose CETA on aspects that "imply an excessive weakening of the protection of citizens' rights," including "the highest-quality products of Made in Italy."

Blow to Brussels

Italy's challenge to CETA comes as the European Commission is eager to reach free trade deals with other countries and regions in the face of mounting trade protectionism by the administration of US President Donald Trump.

Read more: G7 summit fails to calm trade tensions as Trump refuses to endorse joint statement

In April, the Brussels-based EU executive put forward a proposed free trade agreement with Japan for fast-track approval, hoping to avoid a repeat of the public protests that nearly derailed the CETA trade pact with Canada two years ago.

The Commission hopes EU leaders will sign the EU-Japan agreement and a trade pact with Singapore at a summit in Brussels in June so that both deals will come into force by the middle of 2019.

Regarding Rome's rejection of CETA, the Commission said it was working closely with EU members to ensure that EU trade accords were mutually beneficial. In this effort, Brussels needs to convince not only Italy's farmers because many other farm associations across the bloc have criticized the treaty, expressing concerns about rapidly rising pork and beef imports from Canada.

Watch video 03:16

Cheesemakers wary of CETA

uhe/jd (Reuters, AFP)