Canada-EU trade deal on hold as Belgium fails to reach agreement

The European Union's hopes of signing a landmark free trade deal with Canada this week appeared to evaporate on Monday as the Belgian federal government failed to win the consent of French-speaking regional authorities.

But neither Canada nor the European Union is ready to say the planned Canada-EU summit on Thursday, where the Comprehensive Economic and Trade Agreement (CETA) was supposed to be signed, has been called off.

European Council President Donald Tusk had given Belgian Prime Minister Charles Michel until Monday, three days before the planned signing, to resolve the impasse. But a meeting Michel hosted with leaders of the five sub-federal authorities whose permission he needs to go ahead ended in stalemate.

• Analysis: French Belgium an anti-trade powerhouse: Don Pittis
• 'CETA is not dead yet': Belgian ambassador
• Canada-Europe trade deal brinkmanship hinges on Walloons, but also visas
• What's in the Canada-EU trade deal

Tusk contacted Prime Minister Justin Trudeau Monday just after noon ET.

Trudeau's office said the leaders agreed the EU and its member states should continue to work towards a signing summit on Thursday, and they agreed to stay in close contact in the coming days.

Tusk also took to Twitter Monday to say he thought the summit could still go ahead and suggested Trudeau felt the same.

But without a guarantee that the EU is ready to sign, the fate of the summit still appears up in the air. Canada has said it will only proceed if there is a deal to sign.

International Trade Minister Chrystia Freeland told reporters on Parliament Hill she and Trudeau are still prepared to travel to Brussels to sign a deal on Thursday, but said that was in Europe's hands.

"I want Canadians, and also Europeans, to know that Canada has done its job. We stand ready to sign CETA. We're ready to travel to Europe to sign it on Oct. 27," she said.

"We were encouraged to hear from the Europeans today, both in public and in private, that they are working hard to get this deal done, that Europe is now hard at work to do its job and we wish them every success," she said.

Freeland: CETA isn't dead yet

8 years ago

Duration 0:58

International Trade Minister Chrystia Freeland says that CETA isn't dead yet, but that the ball is now in the Europeans' court.

But any success will hinge on the EU's ability to bring the Wallonia region into the fold now inhabited by the rest of Europe. 

"We cannot give a yes," Paul Magnette, the premier of the Wallonia region, told reporters as he emerged from federal talks in Belgium earlier Monday. He said the  main problems remained not with Ottawa, which has already agreed to modifications in the deal, but with the EU authorities.

A reasonable time frame would be the end of the year. With that, we could get there- Andre Antoine, Walloon parliament speaker

Other Socialist-led regions, including bilingual capital Brussels, are ranged behind the Walloons, while Dutch- and German-speakers back Michel's liberal-led federal coalition:

"We have a Yes from the federal, Flemish and German-speaking communities and it's a No from the others," said Flanders premier Geert Bourgeois after the meeting at Michel's residence lasting less than an hour.

"It's a real shame," the centre-right leader said. "We're the laughing stock of the whole world. It's bad for Wallonia, for  Flanders, for Belgium, for Europe, for the whole world."

Michel said it was too early to say CETA was dead and that the Walloons and he were still open to dialogue but that he must inform Tusk that Belgium was not in a position to consent now to a deal that all 27 other EU member states are ready to support.

'No ultimatum'

EU negotiators have stressed that they are willing to keep talking with the Walloons — Freeland left in frustration after talks in the regional capital Namur on Friday and said the problems were now internal ones for the Europeans.

The only deadline, EU officials emphasized, was caused by the need to help Trudeau schedule his week and that there had been no attempt to push Magnette by fixing an ultimatum.

Andre Antoine, Walloon parliament speaker, told Reuters earlier on Monday: "Ultimatums and threats are not part of democracy. We want a deal, we want a treaty, but we want to negotiate it with a minimum of courtesy and respect," he said.

"A reasonable time frame would be the end of the year. With that, we could get there."

CETA supporters say it would increase trade between the partners by 20 per cent and boost the EU economy by 12 billion euros ($17 billion) a year and Canada's by $12 billion.

• Graphic: What's in the Canada-EU trade deal

Walloons have concerns about the threat of surging pork and beef imports from Canada and an independent court system to settle disputes between states and foreign investors, which critics say allows multinationals to dictate public policy.

Many EU leaders suspect the local government in Namur is using its devolved powers to play domestic politics.

Dutch language Flemish newspaper De Morgen said on Monday that Magnette's stance was both a matter of principle and opportunism, a chance to boost his reputation and to become leader of the centre-left in Belgium.

But Council of Canadians National Chairperson Maude Barlow, who has campaigned against the deal in Europe, says Wallonia's opposition is about more than politics.

"It is too easy to dismiss this as an internal Belgium dispute. Polls clearly show that CETA is unpopular in Europe. Wallonia is only saying what millions here believe: ‎this deal is too flawed to adopt," Barlow told CBC News.

The issue goes beyond just a trade deal with Canada, the EU's 12th-largest trading partner.

If CETA fails, the EU's hopes of completing similar deals with the United States or Japan would be in tatters, undermining a bloc already battered by Britain's vote to leave it and disputes over Europe's migration crisis.