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Austrian government split on opposition to EU-Canada trade deal

VIENNA (Reuters) - Austrian Chancellor Christian Kern’s opposition to a free trade agreement between the European Union and Canada was countered by fervent praise for the deal from his deputy at a special parliamentary session on the issue on Wednesday.

Austrian Chancellor Christian Kern addresses a news conference in Vienna, Austria September 2, 2016. REUTERS/Leonhard Foeger

The Comprehensive Economic and Trade Agreement (CETA) with Canada, negotiations for which have finished, is seen as a litmus test for an EU-U.S. trade deal, known as TTIP, which is in limbo after three years of talks have yielded no accord.

The split in Austria’s social democrat-conservative government mirrors Europe-wide debates about transatlantic free trade deals in which anti-globalisation groups see standards at risk while supporters hope for more jobs and export revenues.

Kern said this month CETA contained many of the same problems as TTIP.

The European Commission hopes that the governments of the EU states can approve the trade deal before a planned EU-Canada summit at the end of October. The European Parliament would also need to vote to allow it to enter force provisionally next year.

But national, and some regional, parliaments would still need to ratify it.

Social Democrat Kern, leading a centrist coalition government in Austria where public opposition to both CETA and TTIP is widespread, reiterated his concerns that the deal would allow companies to sue governments in investment courts, push privatisation and lower labour and environmental standards.

“The investment court system will very likely be outside the provisional application, meaning it will only enter into force after you and others have voted,” EU Trade Commissioner Cecilia Malmstrom told the parliament in Vienna.

She added it was not clear yet which parts of the deal would be included in its provisional form.

Earlier this month Kern said the best way to remove these concerns would be renegotiations, which he has admitted would be difficult. He has vowed to bring as much power into the hands of national parliaments as possible.

But conservative vice Chancellor Reinhold Mitterlehner told the parliamentary session that export-dependent Austria should vote in favour of the Canada accord.

He said the Canadian government had offered to draw up a ‘Joint Declaration’ to eliminate Austria’s concerns.

“But it was also said - and I understand Canada in this respect ... - that there is a red line and the red line is to renegotiate,” Mitterlehner said.

Reporting By Shadia Nasralla; editing by Ralph Boulton