BRUSSELS—The European Union was scrambling Friday to salvage a massive free trade deal with Canada that was being held up by a small region in Belgium.
EU leaders warned that failure to clinch the deal could ruin the 28-nation bloc’s credibility as a trade partner and make it more difficult to strike such agreements with other global allies.
A similar free trade agreement between the EU and the United States is also being negotiated, but has met with far more opposition than the Canada pact, which has fallen foul of a Belgian region of 3.5 million people. Progress on the U.S. deal is highly unlikely any time before next month’s American election.
EU Commission President Jean-Claude Juncker said he had 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.
He said officials from the EU Commission were in talks in Namur, Wallonia’s regional capital, with local leaders and the Canadian minister in an effort to find a way out of the stalemate.
Belgian Prime Minister Charles Michel said he had worked through the night in an effort to broker a deal, including speaking to his Canadian counterpart, Justin Trudeau, who is supposed to fly to Brussels next week to sign the deal.
Entering an EU summit early Friday, Michel said he did not want to say anything “that would pour oil on the flames” and said he feared positions were hardening as efforts continued to find a solution.
At a press conference in the early hours of Friday, Juncker stressed the importance of the deal.
“We need this trade arrangement with Canada,” he said. “It is the best one we ever concluded and if we will be unable to conclude a trade arrangement with Canada, I don’t see how it would be possible to have trade agreements with other parts of this world.”
On Thursday, EU President Donald Tusk underscored the high stakes
“I am afraid, that CETA could be our last free trade agreement,” he said.
Wallonia, a little smaller than New Jersey, wants more guarantees to protect its farmers and Europe’s high labor, environmental and consumer standards. It also fears the agreement will allow huge multinationals — first from Canada, later from the United States, if a similar deal with Washington follows — that would crush small Walloon enterprises and their way of life.
Proponents say the deal would yield billions in added trade through tariff cuts and other measures to lower barriers to commerce. At the same time, the EU says it will keep in place the region’s strong safeguards on social, environmental and labor issues.
German Chancellor Angela Merkel insisted Thursday that it was still business as usual for the world’s largest trading block.
“I tell you: You can continue to trust Europe as a trading partner,” she said.
