EU, Canada press Belgian region to accept free trade deal

[October 21, 2016]  By Philip Blenkinsop

BRUSSELS (Reuters) - Canada's trade minister and a European Union negotiator held urgent talks with the premier of the Belgian region of Wallonia on Friday to try and break a deadlock preventing EU nations signing an EU-Canadian free trade deal.

All 28 EU governments support the Comprehensive Economic and Trade Agreement (CETA), but Belgium cannot give assent without backing from five sub-federal administrations, and French-speaking Wallonia has steadfastly opposed it.

The region rejected amendments put forward on Thursday.

Wallonia Premier Paul Magnette told a news conference that the concessions had been a step forward, but not enough to answer concerns over agricultural exports and an independent court system that critics say can be exploited by big business to dictate public policy.

Magnette was due to address the Walloon parliament on Friday morning, but the session was delayed as the talks continued.

Failure to strike a deal with such a like-minded country as Canada would call into question the EU's ability to forge other deals and undermine a bloc already battered by Britain's vote to leave and disputes over the migration crisis.

The moves came as leaders held a two-day EU summit in Brussels with trade policy the main topic set for Friday. European Council President Donald Tusk, chairing the summit, said that Europe's credibility was at stake.

Wallonia is home to about 3.5 million people, less than 1 percent of the 507 million Europeans CETA would affect, but the EU's flagship trade project is resting on the will of its government.

CETA was set to be signed at an EU-Canada summit next Thursday in the presence of Canadian Prime Minister Justin Trudeau.

Tusk said the issue was greater than 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 and opening up new talks with partners such as Australia and New Zealand would be in tatters.

Belgian Prime Minister Charles Michel, whose centre-right coalition supports CETA, said he had spoken to Trudeau by phone.

"I feel the situation is also becoming more difficult in Canada. There has been a radicalisation of the position after the decision yesterday of the Walloon government. But at the moment there is a dialogue," he told reporters on arrival for the EU summit.

Minister-President of Wallonia Paul Magnette attends a meeting on the Comprehensive Economic and Trade Agreement (CETA), a planned EU-Canada free trade agreement, at the Walloon regional parliament in Namur, Belgium, October 21, 2016. REUTERS/Francois Lenoir

Michel and European Commission president Jean-Claude Juncker briefed EU leaders on the efforts to seal CETA with discussions due to focus on ways to protect the bloc from what the EU says is dumping, notably of steel from China.

"It's all under the shadow of CETA," an EU official said

Michel said he was aware of how serious the situation was.

"I hope in the coming hours that there will be a positive solution, but I am not completely reassured to be honest with you," he said.

Walloon's lawmakers share concerns voiced by many on the European left that CETA, and a stalled plan for a similar deal with the United States, risk watering down consumer, labor and environmental protections and granting power to multinationals.

(Additional reporting by Alissa De Carbonnel and Alastair Macdonald; Editing by Andrew Heavens)

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