EU leaders hope deal will be signed as Belgian PM says leaders of five regional parliaments have reached an agreement

European Union leaders have expressed hope of signing a trade deal with Canada after Belgian politicians overcame differences that had been blocking the treaty.

The Belgian prime minister, Charles Michel, confirmed that leaders of five regional parliaments had reached an agreement with the federal government shortly after midday on Thursday. He tweeted:

Charles Michel (@CharlesMichel) Belgian agreement on #CETA . All parliaments are now able to approve by tomorrow at midnight. Important step for EU and Canada

The Belgian compromise – a four-page text that sits alongside the 1,600-page treaty – was approved by ambassadors from 28 EU member states on Thursday afternoon. Belgium’s regional parliaments are expected to endorse the text on Friday, paving the way for the deal to come into force on a temporary basis.

Canada’s foreign minister Stéphane Dion said he was “prudently optimistic” that the treaty could be signed: “If it happens, it is excellent news.” But he added that “a scalded cat fears cold water”.

What does Ceta mean for Brexit? The European Union and Canada have spent seven years negotiating a trade treaty. The Comprehensive Economic and Trade Agreement (Ceta) would abolish most tariffs between the EU and Canada and pull down many barriers to transatlantic business. Conservative politicians, including Boris Johnson and David Davis, have hailed the treaty as a model for post-Brexit Britain. But Ceta has to be approved by all EU member states: it has faced opposition from regional parliaments in Belgium and scrutiny from Germany’s highest court. Some fear the UK could encounter similar problems in striking a free-trade agreement with the EU. The British government has dismissed the parallel: officials argue that putting up trade barriers (Brexit) is very different from taking them down (Ceta).

The Belgian compromise came too late for an EU-Canada summit that had been scheduled for Thursday. The Canadian prime minister, Justin Trudeau, had been due to meet the EU leaders Donald Tusk and Jean-Claude Juncker in Brussels, but decided at the last minute not to get on the plane, as Belgian politicians wrangled over the agreement late on Wednesday night.

Cecilia Malmström, the EU trade commissioner leading the trade talks with Canada, said she hoped a date could be set soon to sign the accord. Tusk, the European council president, sounded a note of caution, tweeting:

Donald Tusk (@eucopresident) I am glad for good news from PM @CharlesMichel. Only once all procedures are finalised for EU signing CETA, will I contact PM @JustinTrudeau

The comprehensive economic and trade agreement, known as Ceta, which has been seven years in the making, stumbled near the finish line amid strong opposition from the Belgian regional parliament of Wallonia.

The EU requires all 28 member states to support Ceta for the treaty to come into force, but the Belgian federal government, which has always backed the trade treaty, was barred from giving its consent because of opposition from regional parliaments in Wallonia and Brussels.

Paul Magnette, Wallonia’s minister-president, who had been leading opposition to the agreement, had wanted to reopen talks with Canada, but the EU institutions insisted that was impossible.

Wallonia has been nervous about exposing its agricultural sector to competition from Canadian farmers. Magnette had also raised objections to a proposed court system for settling disputes between foreign investors and governments.

One concession he won means that Belgium would be able to go to the European court of justice to determine whether a system of investor-state tribunals were compatible with EU law. The four-page document contains a guarantee that the Belgian government will assess the socio-economic and environmental impact of Ceta.

The Walloon minister-president, who has been dubbed “Super-Magnette” in the Belgian media, said: “Wallonia is extremely happy that our demands have been heard.”

Speaking of the delay, Magnette said he was “sorry for our European partners and for the Canadians, but what we managed to get here is important not just for Wallonians, but for all Europeans”.

The special court that Ceta would create has proved so controversial that the commission has decided it will not come into force immediately. EU member states insisted that national parliaments should have a say on aspects of the EU-Canada deal that touch on national competences.

Even if the EU and Canada sign the treaty in the coming weeks, Ceta will only become a complete and permanent legal document following ratification by at least 38 national and regional parliaments in Europe.

Only the backing of national parliaments would trigger the creation of an exclusive trade court to replace the investor-state dispute settlement (ISDS), the existing system for resolving trade disputes that has existed since the 1960s.

This system is written into thousands of investment contracts, including 1,400 involving EU countries. Critics have rung alarm bells about the scope ISDS gives private companies to sue governments.

The commission argues that its proposed changes to existing investor courts deepen transparency and end conflicts of interest, as judges would be appointed by governments and not companies, but critics have dismissed the reforms as rebranding.

Campaign groups welcomed the Belgian challenge to the investor-state tribunals. “The use of investment tribunals allows companies to sue governments for lost profits if they introduce laws to protect people or the environment,” said Paul de Clerck of Friends of the Earth Europe. “These corporate courts have no place in our democracies and we welcome the stance of the dissenting Belgian regions in contending them.”

The European commission had no immediate comment on the challenge to the investor court idea it has championed, but a spokesperson said events were unfolding in a good direction. “What matters is not when [the Ceta signing] happens but the fact that it happens and it will happen.”

Shortly after the compromise was announced, several dozen activists launched a rowdy, but peaceful protest outside the commission headquarters in Brussels. Holding aloft banners reading “Stop Ceta”, protesters banged drums, occasionally jeered at passing EU officials and sang songs, including the Les Misérables musical number, Can You Hear the People Sing.

The cliffhanger story of the EU-Canada trade treaty is seen as a bad omen for post-Brexit Britain as it seeks a trade agreement with Europe.

Britain’s secretary of state for trade, Liam Fox, told MPs on Wednesday that the difficulties over Ceta underscored the importance of the UK signing a trade deal before it leaves the EU.



The UK would only face a procedure similar to Ceta, he said, if it failed to conclude a trade agreement before the end of two years of divorce negotiations under the EU’s article 50.

“That sort of procedure would only be undertaken were we to leave the European Union after our article 50 period without any agreement whatsoever and were looking to seek a new FTA [free-trade agreement] from outside,” he said.

Some observers think that is a likely prospect, as the article 50 divorce talks are dedicated to unwinding Britain’s EU membership and European leaders will not sign a trade deal before agreeing the divorce settlement.

Fox, a prominent leave campaigner, said the experience of Ceta might cause some to think twice before seeking a trade agreement with the EU. “Those who put politics ahead of prosperity might want to think twice,” he said.