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BRUSSELS (Reuters) - The European Commission bowed to pressure to give Europe's parliaments the right to ratify a landmark free-trade deal with Canada, a decision meant to address public concerns but which could wreck Europe's broader trade strategy.
In the face of popular suspicion about secretive trade deals benefiting big companies, Commission President Jean-Claude Juncker retreated from his position that the multi-billion-euro pact would only need support from European Union governments and the European Parliament to go ahead.
"I have looked at the legal arguments and I have listened to heads of state or government and to national parliaments," Juncker said in a statement on Tuesday. "The credibility of Europe's trade policy is at stake."
The 1,600-page text, which goes beyond tariffs to reduce transatlantic barriers to business, will now be sent to each of the EU's 28 national parliaments, and in some cases, such as Belgium, to regional parliaments as well.
Requiring national parliamentary approval for the agreement, first envisaged in 2009, raises the risk it will never be implemented.
Proponents say it could increase bilateral trade by a fifth to 26 billion euros ($29 billion). But many EU voters have turned against free trade since the global financial crisis, fearing that giving multinationals unfettered access to European markets will destroy jobs.
Italy's industry minister, Carlo Calenda, warned the Canada deal and the far bigger "TTIP" accord with the United States were in danger, and sharply criticized the Commission's retreat.
Calenda, who was Italy's top representative in Brussels until he was named industry minister in May, said talks on both had been going on for too long. He said the Canadian deal was "the best the EU has ever signed", but could now take years to ratify and be stopped by just one parliamentary assembly.
"We should ask ourselves how Europe can still be considered a credible negotiating partner," Calenda said in a statement. "And it is a truly worrying sign that the Commission caves in to pressure from member states, renouncing its own rights."
The Commission, the EU's executive, said it still hoped the deal with Canada could be signed at an EU-Canada leaders' summit in October, allowing it to come into effect.
As the most ambitious trade agreement the EU has negotiated so far, the accord encompasses financial services, shipping, sustainable development and access to government tenders, as well as food and industrial goods.
But EU Trade Commissioner Cecilia Malmstrom conceded the deal had fallen victim to wider concerns about the impact of globalization and whether foreign companies were too powerful. She blamed EU governments for failing to stand up for the trade deals they had agreed the European Commission should negotiate.
"The risk to EU trade policy is that member states infect this debate by confusing the content of the agreement with the general malaise and anti-globalization feelings," Malmstrom told a news conference. "Instead of addressing this, the questions and concerns of the citizens are used to boost these feelings."
Additional reporting by Isla Binnie in Rome, editing by Larry King