European Parliament committee says reject EU-Canada trade deal

Demonstrators protest against the Comprehensive Economic and Trade Agreement CETA, a planned EU-Canada free trade agreement, outside the European Commission headquarters in Brussels, Belgium, October 27, 2016. REUTERS/Yves Herman

BRUSSELS (Reuters) - An EU-Canada free trade deal will destroy jobs in Europe and should be rejected, a committee of the European Parliament concluded on Thursday.

The European Union and Canada signed the Comprehensive Economic and Trade Agreement (CETA) in October, but only after hesitation in Austria other countries and opposition from a region of Belgium.and

CETA needs backing from the European Parliament and that vote is expected in February.

The employment committee voted 27-24 for a motion saying the 751-seat parliament should not give its approval to the deal, saying studies showed it could lead to 204,000 EU job losses.

Parliament’s trade committee is the lead body responsible for CETA, but before it holds a vote in January, other committees are allowed to offer their opinions. The environment and foreign affairs committees are also expected to give a view, with the latter expected to be in favor.

CETA has struggled to secure approval in Europe some two years after the two sides reached a deal.

Even after the European Parliament vote, CETA would only enter force provisionally, most likely in the form of import tariff removal, as it needs approval from the EU’s 28 member states and Belgium’s regions.

Supporters say CETA will increase Canadian-EU trade by 20 percent and boost the EU economy by 12 billion euros ($13 billion) a year and Canada’s by C$12 billion ($9 billion).

The main focus of protests against CETA is the system to protect foreign company’s investments against state intervention. Critics say its arbitration panels to rule on disputes allow multinational companies to dictate public policy, such as on environmental standards.

Reporting by Philip Blenkinsop; Editing by Janet Lawrence