Ceta is supported by all 28 EU member states, but Walloon parliament in Belgium is blocking proposed agreement

European leaders will attempt to rescue the troubled EU-Canada trade pact on Friday, after ministers failed to find a compromise that would satisfy a Belgian regional parliament that is blocking the deal.



Ministers from all 28 EU member states, including Belgium, on Tuesday pledged their support for the comprehensive economic and trade agreement (Ceta) with Canada. But hopes of approving the deal were dashed, in the face of implacable opposition from Wallonia, the Francophone region of Belgium.



The Walloons’ tough stance, which puts them at odds with Belgium’s federal government and the wealthier Flemish region, means Ceta will be kicked up to an EU leaders’ summit on Friday.

Failure to reach an agreement by Friday would almost certainly force Canadian prime minister Justin Trudeau to abandon an EU-Canada summit due to take place in Brussels on 27 October. Inside Brussels and many national capitals, this would be seen as humiliating outcome for Europe.

“There has to be an agreement,” said the EU trade commissioner, Cecilia Malmström. “Our Canadian friends need to know whether to book their ticket or not.”

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Belgium’s foreign minister, Didier Reynders, said he hoped for progress at the EU summit.



Trade was already on the summit agenda, with leaders due to discuss the divisive issue of punitive tariffs on Chinese steelmakers. Subsidised cheap steel has been flooding world markets, threatening the future of the industry across Europe, including at Port Talbot, but the EU has been unable to unite, with countries, including the UK blocking tough action.

Now they will also be confronted with salvaging the EU-Canada trade deal, in order to avoid a damaging diplomatic fallout.

Canada is increasingly impatient with the EU’s last-minute doubts, over a trade deal the two sides began negotiating more than seven years ago. If Europe was unable to sign a “progressive trade deal with a country like Canada, then who does Europe think it can do business with in the years to come?” Trudeau asked last week.

Malmström urged for talks on reforming EU trade policy. “We cannot have 28 countries negotiating, or 27,” she said. While trade agreements had to be “inclusive, transparent and efficient”, they could not “drag on for years and years because then they lose their relevance”.

The numerous hurdles over Ceta suggest the complexities that await the British government, when it seeks to negotiate a post-Brexit trade deal with the EU.

David Davis, secretary of state for Brexit, favours the EU-Canada deal as a model, while insisting the balance of negotiating power will lie with the UK.



His colleague, Europe minister David Jones, told his EU counterparts in Luxembourg on Tuesday that the UK was “enthusiastically supportive” of Ceta and hoped it would pave the way for future EU trade agreements, without mentioning Brexit.

Even if the EU finds a solution with Wallonia, the Ceta agreement will only come into force on a temporary basis. Parts of the agreement will remain frozen, most notably a controversial court to enable investors to resolve disputes with national governments.

In order to become a permanent and complete agreement, Ceta must also be ratified by 28 national parliaments and 10 other regional assemblies and upper houses.

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In an attempt to persuade the Walloons, the commission has drafted a legal declaration affirming the importance of national parliaments in ratifying the deal.

This text, which would be bolted on to the 1,600-page treaty, also seeks to assuage concerns in Germany. Last week the German constitutional court gave its backing to Ceta, but added several conditions. One significant proviso would allow Germany to withdraw from the temporary treaty, if national parliaments chose not to ratify it.

So far, this legal declaration has not convinced Walloon leader Paul Magnette, the man at the centre of the furore. Magnette, a political scientist who studied at the University of Cambridge, became Wallonia’s minister-president in 2014, after stints in Belgium’s national government.

The leading political lights of the Francophone world have been urging him to back down, including French president François Hollande, a fellow socialist, who supports Ceta, as well as senior Canadian and EU diplomats.



Speaking to Walloon MPs on Monday, Magnette said he had encountered “thinly-veiled threats”, but refused to climb down. He argued that Ceta was weighted against European producers. “Why would Europeans not have the right to protect their markets against exports that would eventually threaten our sectors? This is what I am fighting for.”



The trade treaty comes at a sensitive time for Wallonia, a region of 3.5 million people, which has struggled with a legacy of industrial decline. Last month, the US firm Caterpillar, maker of diggers, drills and other machinery, announced it was closing its plant in a Charleroi suburb with the loss of 2,000 jobs, as part of a global cost-cutting plan. Magnette, also mayor of Charleroi, has accused Caterpillar of “rogue behaviour”.