Germany's Gabriel faces crunch vote over EU-Canada trade deal

BERLIN (Reuters) - The political future of Germany’s vice chancellor may hinge on the outcome of a vote next week by his Social Democrats (SPD) over whether to back a trade deal between the European Union and Canada.

A giant Trojan horse statue holding EU and Canadian flags in its mouth, set up by the social activist group "Council of Canadians" in front of the Ontario Investment and Trade Centre to protest the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union, is seen in Toronto November 4, 2013. REUTERS/Mark Blinch

SPD leader Sigmar Gabriel has championed the Comprehensive Economic Trade Agreement (CETA) as part of his remit as economy minister, and to demonstrate the center-left party’s business credentials.

But critics on the SPD’s left wing are skeptical about the benefits of the deal and believe it would give multinationals greater access to European markets without creating jobs.

A failure to secure a majority of delegates at Monday’s SPD convention in favor of the accord could scupper Gabriel’s chances of standing as the party’s candidate for chancellor in national elections next year.

It might also unleash a damaging power struggle within the party, the junior partner in the coalition government led by Chancellor Angela Merkel’s conservatives.

“If he loses the vote and if he decided to step down on the back of it, then there would be chaos,” said Gero Neugebauer, analyst at Berlin’s Free University.

That would further upset the balance within the coalition at a time when Merkel is looking to the SPD to counter a growing rift between her CDU party and its conservative CSU allies in Bavaria over her refugee policy.

Slideshow ( 2 images )

A majority SPD vote in favor of CETA, however, would give a much needed shot-in-the arm to Gabriel, who languishes behind Merkel in approval ratings despite her popularity taking a hit from her decision a year ago to open Germany’s borders to refugees.


Gabriel ruffled feathers last month when he said talks on the Transatlantic Trade and Investment Partnership (TTIP) - a parallel trade deal the EU is negotiating with Washington - had “de facto” failed.

But he views CETA, due to be signed by Brussels and Ottawa next month prior to full ratification by EU member states’ parliaments, as a chance for the West to set new standards for trade deals and act as a counterweight to China’s increasing economic clout.

In a late attempt to win over doubters within his party, Gabriel traveled to Canada on Thursday and wrested guarantees for clarifications on ambiguous parts of the treaty from Trade Minister Chrystia Freeland and Prime Minister Justin Trudeau.

Critics want Gabriel to set out what precise improvements to the treaty text - for example the issue of transparent courts to settle disputes rather than private arbitration - are needed before the SPD can lend its support.

“It’s not acceptable in its current form,” said Tobias Afsali, who is voting on behalf as a proxy for an SPD delegate from Bavaria, where the party branch has recommended members reject CETA.

Overall, analysts expect Gabriel to clinch a narrow victory.

Hoping to crank up the pressure ahead of the vote, opponents of CETA and TTIP have organized demonstrations against both accords in seven German cities for Saturday. Organizers expect more than 250,000 to attend.

Domenico Lombardi, from Canadian think-tank the Centre for International Governance Innovation, said CETA risked being derailed by concerns about TTIP: “If you want to kill TTIP, it’s enough to kill CETA first.”

Additional reporting by Holger Hansen; editing by John Stonestreet