Italy says it won’t ratify EU-Canada trade deal; Canada plays down threat

ROME (Reuters) – Italy will not ratify the European Union’s free trade agreement with Canada, Deputy Prime Minister Luigi Di Maio said on Friday, although Canadian officials played down the threat to the accord, which mostly took effect last year.

“Soon CETA (the Comprehensive Economic and Trade Agreement) will arrive in parliament and this majority will reject it and it will not ratify it,” Di Maio said at a farmers’ association gathering in Rome.

“If so much as one Italian official … continues to defend treaties like CETA, they will be removed,” added Di Maio, who leads the anti-establishment 5-Star Movement, which governs the country with the right-wing League.

The CETA accord has been provisionally in effect since September. It needs to be approved by all 28 EU member states to fully come into force, and can theoretically be scuppered altogether if an EU member country formally notifies Brussels that it has permanently rejected it.

But Canada says 98 percent of the tariff and trade barrier reductions under the agreement have already taken effect. A Canadian government source played down the Italian remarks, saying they reflected domestic politics and the challenges of managing a coalition of right- and left-wing parties.

“We are engaged but do not plan on escalating in any way an issue that has more to do with ‎(Italian politics) than a fundamental issue with the 2 percent of CETA left to be ratified,” said the source, who asked to remain anonymous given the sensitivity of the situation.

The 5-Star/League government, which took office on June 1, vows to take a hard line to defend Italian speciality foods.

Of the 28 European Union countries, Italy has the most food products with PDO (Protected Designation of Origin) and PGI (Protected Geographical Indication) labels.

These include Parmigiano Reggiano cheese and Prosciutto di Parma ham. Under CETA, Canada has recognized more than 40 Italian PDO and PGI labels out of a total of 292.

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