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A deputy wears a sticker against the Transatlantic Trade and Investment Partnership and Comprehensive Economic and Trade Agreement during a debate on CETA at the Walloon regional parliament in Namur, Belgium, October 14, 2016.

FRANCOIS LENOIR/REUTERS

A leading business lobby for the Canada-EU free trade agreement is warning a regional government in Belgium with effective veto power over the deal that Walloon risks damaging not only the European Union's international reputation but also its relationship with Canada.

The bluntly worded letter from the Canada European Roundtable for Business to Walloon's Minister-President Paul Magnette was circulated among Canadian media this weekend by the Trudeau government.

In politically-decentralized Belgium the central government requires the support of regional governments to sign international agreements. On Friday the parliament of Walloon, home to 3.5-million Belgians, most of them French speaking, passed a resolution instructing Belgium's national government not to sign the Canada-European Union deal in its current form.

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It would be difficult for Mr. Magnette as leader of the Walloon government to ignore this motion. But if he heeds the resolution, it could up-end the Canada-European Union deal because the EU has said the accord must be approved by all 28-member states.

Walloon is now the target of a full-court press by European and Canadian leaders urging it to stand down.

This is where Jason Langrish, executive director of the Canada Europe Roundtable, has come in.

In an October 15 letter to the Walloon leader, which Mr. Langrish distributed widely Saturday, he warned Mr. Magnette that Belgium could end up taking the blame for killing the Comprehensive and Economic Trade Agreement (CETA) negotiated by Canada and the European Union.

"It appears Belgium is the only member state that is not in a position to vote 'Yes' for CETA. If this situation persists, Belgium will be responsible for the failure of the highest-quality and most progressive trade agreement that both Europe and Canada have ever negotiated," the business lobby leader said.

The Canada Europe Roundtable is composed of both Canadian and European businesses that want to see barriers to trade lowered between the two jurisdictions and include law firms, drugmakers, resource companies and industrial conglomerates.

Mr. Langrish argues in the letter that this would be a repudiation of Canada's efforts to accommodate European voters. "This would be particularly disappointing for Canada considering that the country has acted in very good faith over the course of the negotiations, including accepting a rework of the treaty text in light of concerns that were raised by political and civil society stakeholders in Europe after the agreement had been initially concluded."

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He suggested Canada is more like Europe than any other nation around the globe.

"As a partner in trade and investment, there is not a country in the world that has values that are more closely aligned with those of Europe than Canada. A failure to approve CETA would cast a pall over the EU's relationship with Canada."

The business lobbyist also warned the European Union could end up discredited by this. "The implications of a rejection of CETA for Belgium, and indeed for Wallonia, within the EU will be especially pronounced given that it alone would be responsible for setting this process in motion. A possible failure of CETA would seriously compromise the EU's credibility as a negotiating partner and could lead to the unravelling of the Union's trade agenda and possibly even trade competency."

European Union officials, shaken by Britain's vote in June to quit the EU, are eager to conclude and enact the free-trade deal in order to demonstrate that the political-economic union is still moving forward as a viable bloc.

Mr. Langrish warned Mr. Magnette that rejection of the Canadian trade deal would be a terrible followup to Brexit.

"This would come at the worst possible time, following the Brexit vote and in advance of a number of national elections where anti-EU parties are making inroads. We ask that you take a broad view of the agreement and the benefits that it can deliver to our respective economies and societies. We respectfully urge you to find a positive outcome to the current predicament in advance of the European Council vote [on CETA]."

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Walloon legislators remain convinced that CETA will be bad for their region, and that it was negotiated with big businesses in mind rather than the small- and medium-sized enterprises, or farmers, in the Walloon region.

Walloon is the poor region of Belgium, home to 3.5 million people where unemployment hovers around 16 per cent and the local economy is reeling from a decision last month by Caterpillar to close a plant, putting 2,000 people out of work.

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