Any remaining chance the Canada-European Union trade deal could be signed this week appears to be evaporating – even as Belgium's Foreign Minister claimed progress in talks to overcome regional opposition that has thwarted the accord.
European Parliament President Martin Schulz said on Tuesday he did not expect a Canada-EU summit in Brussels to take place on Thursday. Canada and the EU had planned a fanfare-filled get-together on Oct. 27 that would include a visit by Prime Minister Justin Trudeau to sign an agreement seven years in the making.
"I don't think that we'll get a solution this week," Mr. Schulz told Germany's Deutschlandfunk radio station. "That would seem to be very, very difficult to me."
Explainer: What's Wallonia's deal? A primer on its role in CETA's crisis
The Belgian region of Wallonia, which represents less than 1 per cent of the European Union's population, is using its veto power over international trade deals to withhold the support the federal Belgian government needs to approve the Comprehensive Economic and Trade Agreement with Canada.
The issue is a blow to the credibility of the EU, still shaken from the United Kingdom's decision in June to quit the bloc, because it suggests the political-economic association cannot close trade deals.
Ottawa still refuses to acknowledge the Oct. 27 summit is unlikely. Mr. Trudeau would have to board a plane by late Wednesday night to arrive in time.
"Canada remains ready to sign the agreement on the 27th, as was planned," International Trade Minister Chrystia Freeland told reporters. "The reports that we've heard are that Europe continues to work hard. That's very good. And we wish the Europeans every success. It's up to them now."
Canada refuses to reopen CETA despite Wallonia's concerns that it could undermine health and safety standards and allow big business to undo Belgian policies, noting that 27 of the 28 EU member states are ready to sign.
The EU faces difficult choices if Wallonia refuses to budge.
A European Union diplomat who spoke on condition of anonymity suggested the best-case scenario now is that Wallonia might abstain from formally objecting to the deal, therefore allowing it to proceed – but the envoy acknowledged the regional government would lose face if it did this. There has been internal debate within the EU on whether the European Council could approve the deal with 27 out of 28 countries, contrary to the earlier rules it laid down, the diplomat said, acknowledging this is also an unlikely choice. A third option would be for Canada to agree to remove a contentious mechanism in the deal that allows investors to sue governments whose policies affect their investments, the diplomat said. But this is a standard feature of most trade agreements Canada has signed.
The passing of the deadline for signing the trade deal would present a serious risk for CETA. With no urgent reason to settle quickly, the pressure would be off for Wallonia to reach an accommodation with the Belgian federal government on an expedited basis.
The risk when trade deals stall in the final stretch is they begin to fall apart as other parties reconsider the concessions made and emerge with grievances of their own.
Belgian Foreign Minister Didier Reynders said on Tuesday that Belgian negotiators "really are at the final texts" but added that "as you know, there is the last comma, the last word, which are probably the most important."
Paul Magnette, the regional government leader in Wallonia who has led the opposition to CETA, said on Tuesday night he felt like the Belgian central government is now taking his concerns seriously.
"We feel that they are starting to listen to us and we continue to negotiate," Mr. Magnette said on Tuesday night. "I didn't say we progressed, and I didn't say we are paralyzed either."
With reports from Reuters and Associated Press