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France Votes Against Ratifying EU-Canada Free-Trade Agreement

(Bloomberg) -- The French Senate voted against ratifying the European Union’s free-trade deal with Canada, a political setback for President Emmanuel Macron that means the accord will remain in force only provisionally.

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An unusual coalition of 211 senators from communists to conservatives coalesced to vote against ratifying the Comprehensive Economic and Trade Agreement, known as CETA. Forty-four voted in favor.

“I know we have differences with the right on free trade,” Communist Senator Fabien Gay said. “But today we have managed to come together on the essential question of democracy.”

While the rejection from France’s upper house doesn’t imminently endanger the EU’s trade deal, it is a sting to Macron, who has held up CETA as an example of the benefits of international agreements the EU can forge. That stance was already proving difficult to hold as he has separately intervened to stop a different deal between the EU and the South American Mercosur bloc.

The French leader is under pressure as polls for the June European Parliament elections show his party trailing far behind Marine Le Pen’s National Rally, which has called for returning EU powers to member states. The bloc’s trade deals are becoming a flash point in the election debate as farmers continue to protest against low incomes and EU regulations.

CETA has been operational provisionally since 2017 and only requires approval from national parliaments to fully enter into force. After the Senate rejection, the French government could send the bill to a committee of senators and lawmakers at the National Assembly, which approved it in 2019.

France could also chose not to notify Brussels of a refusal to ratify, as Cyprus has done since its parliament rejected CETA in 2020.

Ecologist party Senator Yannick Jadot warned that if Macron’s government took that option it would build distrust in democracy and the French parliament.

“It’s inconceivable this vote should have no influence — that would be a red carpet for the far-right,” Jadot said.

At the debate in the Senate, Trade Minister Franck Riester said rejection would be an “unacceptable manipulation” with serious consequences for France.

According to the minister, the provisional implementation of CETA has helped increase exports to Canada by 33%, while Canadian beef products represent only 0.0034% of French consumption. He also said Europe needs an arrangement with Canada to ensure the supply of key minerals for the green transition.

“Today is a bad day, a very bad day, for our economy, for our entrepreneurs, our exporters and farmers,” Riester said. “The Senate is delivering a nasty blow to our friendship with Canada and our economy.”

The opponents of CETA said that there remains a risk that Canada could still flood European markets with beef that isn’t produced by the same strict criteria as in France and the EU.

“We must say stop to unfair competition we are inflicting on European producers by imposing draconian norms and closing our eyes when it comes to imported products,” said Laurent Duplomb, a center-right senator from the Républicains.

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