Report of an emergency meeting

Belgian region Wallonia blocked the Comprehensive Economic and Trade Agreement between Canada and the EU and leaders are now desperately trying to salvage it.

Reuters now reports, citing an unnamed EU source, that an emergency envoys meeting has been called for 1800 GMT (in less than 3 hours) to seek a resolution.

Belgium can't approve the deal unless all the regions are on board and Wallonia late yesterday said it won't proceed. That will force Belgium to miss Friday's ratification deadline.</s>BRUSSELS (Reuters) - The Belgian region of Wallonia rejected new amendments to a planned EU-Canada free trade agreement on Thursday, reaffirming its opposition and so threatening the entire deal, a flagship of European Union trade policy.

Demonstrators protest against CETA outside the EU summit in Brussels, Belgium, October 20, 2016. REUTERS/Francois Lenoir

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.

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 damage credibility already battered by Britain’s vote to leave the bloc and disputes over the migration crisis.

The moves came as leaders began 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 in a tweet that the Europe’s credibility was at stake.

Wallonia is home to some 3.5 million people, less than 1 percent of the 507 million Europeans CETA would affect.

The European Commission, which negotiates trade deals for the bloc, offered new concessions in the form of changes to an EU declaration to be appended to the treaty. One EU diplomat said these sought to answer Walloon concerns about farming and how trade disputes with Canadian companies would be settled.

Walloon premier Paul Magnette called an emergency session of his government and was due to address the Walloon parliament on Friday. The government recognized improvements, but believed they did not go far enough, an official said, adding it needed time to reflect.

“At this stage, for us, the document is not sufficient,” Magnette told reporters in the regional capital Namur.

Magnette said he hoped to meet Canadian Trade Minister Chrystia Freeland again on Friday. The two met on Wednesday.

Related Coverage Juncker says EU working on getting Canada trade deal agreed Friday

“We’ll see how we can modify the text that we were given,” he added.

At the summit in Brussels, Commission President Jean-Claude Juncker said: “I am still hopeful that we will come to a good result in the course of the night and tomorrow morning.”

TRUDEAU TRIP

In Ottawa, an official confirmed Freeland would meet Magnette on Friday and said she was in constant contact with EU Trade Commissioner Cecilia Malmstrom.

“This is now a question for the Europeans to decide,” said the official, who requested anonymity because of the sensitivity of the situation.

Canada’s Liberal government has shown increasing signs of impatience with the EU over challenges to a deal that supporters say will increase bilateral trade by 20 percent.

CETA is 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. CETA would be the EU’s first agreement with a G7 country.

He told reporters there would be no public support for free trade if people could not be convinced that trade agreements were in their interests, adding: “Which means, I am afraid, that CETA could be our last free trade agreement.”

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Belgian Prime Minister Charles Michel, whose liberal-led coalition wants the deal, spoke of a looming “moment of truth”.

Wallonia’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.</s>BRUSSELS — It has come to this for the European Union: Its trade policy was being held hostage on Thursday by the Walloons.

Facing a set of debilitating crises, the bloc’s leaders assembled on Thursday for a two-day summit meeting that only underscored how the fractious domestic politics of its 28 member countries are undercutting its ability to confront mounting challenges and restore a sense of common purpose.

An accord with Ukraine backed by every other country risked being derailed by the Netherlands, highlighting again the European Union’s inability to carry out a muscular foreign policy. Consensus over a toughening of sanctions policy toward Russia appeared as elusive as ever despite Moscow’s escalation of the conflict in Syria, reflecting the varied economic and political interests in European capitals.

The budget discipline that Brussels, urged on by Germany and other northern nations, tries to impose on member governments as a condition of membership in the euro currency, is fraying as calls grow, especially from poorer southern countries, to move away from austerity policies after years of lackluster growth. And then there is the proposed trade deal with Canada, a centerpiece of European Union policy, which is being blocked by the French-speaking Walloons of Belgium.</s>BRUSSELS, Oct 21 (Reuters) – Canada’s trade minister walked out of talks in Belgium on Friday, declaring that the European Union was incapable of sealing a planned transatlantic free trade deal designed to boost growth in both economies.

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

The agreement, the EU’s first with a G7 country, would according to supporters increase trade between the partners by 20 percent, boosting the EU economy by 12 billion euros ($13 billion) per year and Canada’s by C$12 billion ($9 billion).

A visibly shaken Chrystia Freeland, Canada’s trade minister, emerged after a full day of talks with chief Canadian and EU trade negotiators and Walloon Premier Paul Magnette.

“Canada has worked, and I personally have worked, very hard. But it is now evident to me, evident to Canada, that the European Union is incapable of reaching an agreement – even with a country with European values such as Canada,” she said.

“Canada is disappointed and I personally am disappointed, but I think it’s impossible,” she continued, adding she was heading home.

A source in the EU’s executive European Commission said it had not yet given up hope of reaching a deal. Separately, EU trade commissioner Cecelia Malmstrom said in a tweet she was sad talks had halted, but still hoped to find a solution.

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 rests on the will of its government.

It continued to 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 may be used by multinationals to dictate public policy.

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

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

“We feel we’ve done everything we can do. The ball is in their court,” Freeland’s deputy, David Lametti, told reporters in Ottawa. Asked whether Canada had any more room to be flexible, he replied: “It’s fair to say we would continue to negotiate in good faith.”

A source familiar with the matter said Trudeau had set a deadline of Monday to decide whether to fly to Brussels. A spokesman did not immediately respond to a request for comment.

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 Europe’s migration crisis.

The walkout came as leaders concluded 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.

The issue is 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.

Britain, which plans to form a new trading relationship with the EU 27 after it has exited the bloc, may be watching with concern.

“If there are all these disagreements to have a simple trade agreement with Canada, just imagine an agreement with the United Kingdom,” said Maltese Prime Minister Joseph Muscat.

Geert Bourgeois, premier of Belgium’s Dutch-speaking region of Flanders, called the deadlock over CETA a disgrace.

“It beggars belief… It is a disgrace for Europe. If there is one task Europe has, it is to conclude trade deals. We are way too small to do this on our own,” he told Reuters.

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, labour and environmental protections and granting power to multinationals.</s>The head of Belgium’s small Wallonia region is rejecting a Friday deadline to sign up to a huge trade deal between Canada and the European Union, demanding a full renegotiation that could bring the whole transatlantic agreement down.

Wallonia President Paul Magnette said Wednesday that “we cannot sign by Friday,” when a two-day summit of EU government leaders is to end. It was set as a target day to get the last of the 28 EU nations on board.

Belgium can only back the deal if its regions, including Wallonia, approve it. Without unanimity among EU nations, the deal will collapse.

Magnette told TV network RTBF that despite progress over the past few days “it is insufficient. And you cannot say now: ‘you have 3 days to accept.”

His statement further clouds the fate of the so-called Comprehensive Economic and Trade Agreement (CETA). Wallonia — a francophone southern region in Belgium — has expressed concerns the deal could erode labour, environmental and consumer regulations.

Canadian European trade envoy Pierre Pettigrew told the Montreal Board of Trade on Tuesday that he remains hopeful the agreement will be approved later this week, despite snags that have stalled a critical vote on the deal.

Pettigrew — who was dispatched to meet with Magnette last week — said Canada has done everything it could to address any concerns within the EU, and now the ball is in its court.

“We have worked very hard in the last few months to bring reassurances that we in Canada share those same progressive views,” Pettigrew said.

EU nations were scheduled to vote on the deal Tuesday, but that was delayed after Magnette raised objections, saying he needs a few more days.

Pettigrew said the vote could happen as early as Thursday, when EU leaders kick off a two-day summit.

Former prime minister Brian Mulroney, who is no stranger to trade deals given his role as one of the architects of NAFTA, appeared unfazed by the dispute.

“Every once in a while you run into a hiccup in these things,” said Mulroney, who also spoke before the Montreal Board of Trade. “This is a hiccup, but I don’t think it’s going to derail such an important negotiation.”

International Trade Minister Chrystia Freeland said Canada has made significant changes to the deal and remains “cautiously optimistic” that it will receive European approval.

“I am both hopeful and I also hope that Europe and Europeans can come together to make this decision, which is the right one for Canada and for Europe,” she said in Ottawa.

Prime Minister Justin Trudeau is scheduled to fly to Brussels next week to sign the agreement should it be unanimously approved by the EU.</s>EU leaders left Brussels at the end of a two-day summit with the main question of the day unresolved – the ratification of the EU-Canada trade deal.

Seven years after negotiations on a comprehensive economic and trade agreement (Ceta) between the EU and Canada was opened, there are now serious doubts about the future of the agreement.

As EU leaders arrived at the European Council building in Brussels on Friday morning for their second day of talks, 50km away in Namur, Belgium’s French-speaking regional parliament was meeting to discuss the ongoing impasse in the EU-Canada deal.

A week after the Wallonian government rejected the trade deal, the president of the parliament, Paul Magnette, told the parliament that his concerns still had not been adequately addressed. This included worries about the impact of the trade pact on Belgium’s agriculture industry and continuing concerns about an investor court which would give private companies the right to sue national governments in certain cases.

While all EU member states have signed off on the provisional application of the agreement, Belgium cannot ratify the agreement without the agreement of all five regional parliaments.

By 5pm, following negotiations with Canada’s trade minister Chrystia Freeland, Canada declared the deal dead.

“It is evident to me, for Canada, the European Union is not capable right now to have an international agreement, even with a country that has European values like Canada,” Ms Freeland said.

The decision by Canada to walk out of the talks presents a serious blow to the European Union and to its credibility as a trade partner. While some believed the move may be a negotiating position by Canada, which could pressurise the Wallonian parliament into agreeing to the pact at the weekend, Friday’s developments appeared to leave the deal on the precipice.

Ironically, the debacle unfolded as EU leaders were meeting to discuss the union’s future trade policy, an issue that had been scheduled on the agenda for months.

Following the discussion, EU leaders agreed to reform their existing trade defence measures – the tools it uses to put duties on imports – mandating EU trade ministers to return to the issue in November.

But within the EU strong differences remained between member states on the issue. While the European Commission has said it wants to toughen defence measures that the union can take against countries like China and the United States, more traditional supporters of free trade, including Ireland, are wary of any measures that could signal a protectionist stance.

Speaking after the summit, Taoiseach Enda Kenny said that Ireland, as a small, open economy, was strongly in favour of trade agreements and was well aware of the benefits of trade. He described the EU-Canada trade deal as a “new-generation agreement that will remove tariffs between the European Union and Canada”, adding that he was confident the impasse could be resolved over the coming days.

But commission president Jean-Claude Juncker said that the European Union needed to react to threats to its industry. “I am against stupid, basic protectionism, but I cannot accept that the Americans and others are protecting their industry and that we are naive guys wanting to charm others,” he said.

In particular, the concerns of the European steel industry are weighing on the decision-making process. Earlier this week representatives of more than 50 European steel companies urged the European Commission to take a tougher stance against cheap imports amid accusations that China is dumping cheap steel on the European market.

With a December 11th deadline looming, when China is due to gain “market economy status” under WTO rules which would give China greater access to EU markets, EU member states will be forced to clarify their trade policy in the coming month.

As Britain, one of the strongest proponents of free trade around the EU table, prepares to leave the bloc, the European Union faces a tricky balance as it tries to convey that it is still a liberal, open economy, while at the same time show that it is listening to the concerns of its citizens at a time when free trade has never seemed so under attack.</s>Belgium’s regional parliament of Wallonia is meeting today amid a deepening impasse over the EU-Canada trade deal which threatens to overshadow the second day of the EU summit in Brussels.

The comprehensive economic and trade agreement (CETA) between the EU and Canada has been under discussion for seven years, but its ratification was thrown into disarray by the rejection of the deal by Belgium’s Walloon parliament last week.

Frantic behind-the-scenes talks took place on Thursday night to try and broker a compromise between the Belgian regional parliament, the Belgian prime minister Charles Michel and the European Commission which would allow Wallonia to sign the deal.

But Wallonia’s president, Paul Magnette told a news conference on Thursday night that there were still concerns over agriculture and an investor court system contained within the deal which critics believe give too much power to investors to sue governments.

While all EU member states have signed off on the provisional application of the agreement, Belgium cannot ratify the agreement without the agreement of all five regional parliaments.

With Canadian prime minister Justin Trudeau due to fly to Brussels next week for an EU -Canada summit on Thursday, pressure is on to secure full EU agreement by Monday night at the latest.

Arriving to the EU summit, Mr Michel said that the new proposals had been sent to the Walloon regional government, adding that the “moment of truth was close” for the EU-Canada deal. He added that he hoped a deal could be reached in the coming hours and days.

The controversy has opened up serious questions about the ability of the European Union to strike trade deals with third-party countries, an issue that could also have implications for Britain which hopes to agree a trade compact with the European Union when it leaves the bloc.

The EU-Canada trade deal, which the European Commission says will remove 98 per cent of tariffs on goods sold between the two regions and will open up greater opportunities for business, has been under negotiation for seven years.

The second day of an EU leaders’ summit is expected to be dominated by consideration of the EU’s trade policy, though the discussion is likely to be overshadowed by continuing uncertainty over the EU-Canada deal.

EU leaders will consider so-called trade defence instruments - economic tools that can be used to slap tariffs on imports. The European Commission wants to bolster the bloc’s trade defences by introducing tougher trade measures, but some free-trade countries are dubious about any move towards protectionism. In a communiqué released on the eve of the summit, the Commission said it had already been deploying existing trade defence instruments “to their full force,” but Jean-Claude Juncker said “we have reached the limit of what is feasible under the existing legislation.”

In particular, the Commission is looking to alter the existing “lesser duty rule” which caps the anti-dumping duties the EU can put on imports.

The troubles of the EU steel industry are informing the debate. Ahead of the summit more than 50 European steel companies wrote to the Commission, urging Brussels to toughen its trade measures, particularly against China which has been accused of flooding the market with cheap steel. The prospect that China will gain ‘market economy status’ in December under WTO rules which would reduce further barriers with the EU is also increasing pressure on Brussels to act.

Today’s discussion is also taking place against a wider background of public opposition to free trade. The issue, which has surfaced during the US presidential campaign, has made agreement on the EU-US trade deal known as the Transatlantic Trade and Investment Partnership (TTIP) less likely. EU officials have conceded that an agreement is unlikely before the end of Barack Obama’s tenure as US president.

Speaking ahead of Friday’s discussions, a senior EU official said that, while trade brings benefits to citizens, it was important to communicate this to the public and ensure that European interests are also protected. “The solution is to regain the trust of European citizens but we also need to protect, defend legitimate European interests against unfair practices.”</s>Canadian Trade Minister Chrystia Freeland has walked out of negotiations to salvage a major trade deal with the European Union, saying she is returning home because she feels the 28-member bloc is unable to reach an accord with Canada.

In fact, she said she considers it “impossible” for an agreement to be clinched.

The development throws the future of the Canada-EU trade deal into doubt and, coming only months after the United Kingdom voted to quit the European Union, is a blow to the EU’s efforts to demonstrate it is still moving forward as a viable entity.

“Canada has worked, and I personally have worked very hard, but it is now evident to me, evident to Canada, that the European Union is incapable of reaching an agreement – even with a country with European values ​​such as Canada, even with a country as nice and as patient as Canada,” Ms. Freeland said in a statement.

“Canada is disappointed and I personally am disappointed, but I think it’s impossible. We are returning home. At least I will see my three children tomorrow at our home.”

Opinion: EU should have told Canada years ago it was moving the CETA goal posts

It was remarkably undiplomatic language from the Canadian cabinet minister and reflects the Trudeau government’s deep frustration with the European Union, which has been unable to give final approval to a wide-ranging agreement to reduce trade barriers that was first reached two years ago.

Ms. Freeland’s breaking point came after three days of talks in the heart of French-speaking Belgium – the centre of opposition to the Comprehensive Economic and Trade Agreement.

The European Council has been unable to reach a consensus on approving the Canada-EU deal because Belgium is unable to give its assent. Politically-decentralized Belgium requires the approval of regional governments on major international agreements and the French-speaking Wallonia region has opposed signing the agreement with Canada.

“We spent today here working very hard with the Walloons and the Commission to respond to the concerns expressed by the Walloons,” Ms. Freeland said.

She went on to point out the Canadian government has worked with all European countries where opposition to the deal has arisen, including Germany, Austria, Bulgaria and Romania.

This turn of events means a signing summit between Canadian Prime Minister Justin Trudeau and European Union leaders planned for Oct. 27 is now cancelled.</s>BRUSSELS (AP) — European Union leaders are scrambling to salvage a free trade deal with Canada that is being held up by a small region in Belgium.

EU Commission President Jean-Claude Juncker has warned that a failure to sign off on the deal could signal the end of such agreements between the 28-nation bloc and its global trading partners.

Juncker said he has invited Canada’s International Trade Minister Chrystia Freeland to join talks Friday with the EU and Belgium to persuade Paul Magnette, president of the French-speaking Belgian region of Wallonia, to sign off on a deal his legislature has repeatedly rejected.

Juncker says he doesn’t see “how it would be possible to have trade agreements with other parts of this world” in the event the pact with Canada is torpedoed.</s>It was supposed to be the easy one. EU ministers were due to ratify an EU-Canada trade deal this week, seven years after negotiations began. But following a series of setbacks, it now appears that the deal – known as Ceta – may not be ready for ratification at next week’s EU-Canada summit.

Instead, the issue has been pushed on to an already packed agenda for the two-day EU leaders’ summit which starts today in Brussels. The issue now threatens to embarrass the EU, raising serious questions about its credibility as a trade partner. As Canada’s trade minister Chrystia Freeland put it: “If the EU cannot do a deal with Canada . . . who the heck can it do a deal with?”

Ceta’s troubles began this summer after the European Commission decided that the deal needed to be ratified by national parliaments as it was deemed to fall under national as well as EU competence.

The need for sign-off by up to 40 national and regional parliaments was bound to throw up challenges. It did. Though Germany’s parliamentary backing for the deal was a boost, last Friday the regional parliament of Wallonia, which represents 3.5 million French-speaking Belgians, voted against the deal. (Ireland signed off on the provisional application of the deal at last week’s cabinet meeting).

Legally, Belgium cannot proceed without the support of all five regional parliaments. Other countries have now jumped into the fray, with Romania and Bulgaria demanding visa-free access for its citizens to Canada, while lingering concerns remain about a German constitutional court judgment on the deal which suggests a potential opt-out for Germany

Diplomatic efforts last weekend failed to break the impasse, with the result that EU ministers arriving in Luxembourg on Tuesday for a specially-convened trade council had nothing to sign.

EU leaders, who had been scheduled to discuss trade on Friday morning, will now consider the Canadian conundrum. While ambassadors can technically sign off on the agreement before Canada’s prime minister Justin Trudeau leaves for Europe next Wednesday, Monday seems to be the last possible date for ratification.

In the meantime, Wallonia has indicated it is not for turning. The region’s president, Paul Magnette, on Wednesday called for a “few months” to reopen the negotiation. The small Belgian province has now become an unlikely champion of anti-trade campaigners across the globe.

The European Union is a master of compromise and an inventive solution may be found in the coming days to hide Europe’s blushes amid signs that Canada’s patience wears thin. But even if the agreement is salvaged, the Ceta controversy raises deeper questions about the future of EU trade policy. The disagreements over Ceta are part of a broader public unease about free trade shaping political debate from Berlin to Washington.

They have implications for TTIP, the transatlantic trade and investment partnership between the EU and the US, which is at a much less advanced stage. The bid to secure agreement by the end of US president Barack Obama’s tenure has essentially been abandoned. The German and French leaders are reluctant to back a deal that faces significant public opposition ahead of next year’s elections in those countries, while both US presidential candidates oppose TTIP in its present form. As one EU diplomat put it, the objective now is to “ensure a soft parking of TTIP before the end of the year”.

For critics of TTIP, the relatively late public mobilisation around Ceta shines an important light on issues that are common to both the US and Canadian trade deals. This includes the controversial investor protection proposals that allow foreign companies to sue countries.

“Both the EU and Canada are advanced democracies with highly developed court systems,” says Scott Sinclair, senior research fellow at the Canadian Centre for Policy Alternatives, “so why set up this parallel system of private justice which is only available to foreign investors?”

But supporters of the deal, who believe it will lead to lower prices and better access for consumers and businesses, fear that Europe’s current trade woes will damage the bloc’s competitiveness in the long term. Ireland was among the countries that welcomed the focus on trade at this week’s European Council, particularly given the imminent departure from the EU of Britain, one ofits strongest liberal economic voices.

Perhaps of most concern, however, are the implications of the Ceta controversy for Britain. The prospect of up to 40 parliaments having a veto on any future trade agreement between the EU and Britain does not bode well for Britain’s exit negotiations. As EU trade commissioner Cecilia Malmstrom put it this week: “If we can’t make it with Canada, I don’t think we can make it with the UK.”

It seems that a small regional parliament in Belgium may have given Theresa May a fresh headache.
The European Union calls an emergency two-day meeting about the planned EU-Canada free trade agreement, approved by all 28 EU member governments but held up by the "non" vote in Walloonia, one of Belgium's five sub-federal administrations.