EU Scrambles to Save Canada Trade Pact

BRUSSELS (AP) -- The European Union's attempt to finalize a massive free trade deal with Canada remained in limbo Friday, with the tiny Belgian region that's holding up the pact saying its objections had not yet been sufficiently addressed.

Paul Magnette, the president of Wallonia, spent hours discussing with Canadian International Trade Minister Chrystia Freeland to find a compromise. The deal needs unanimity within the EU, and Belgium in turn needs unanimity among its regions.

The disagreement has pitted Wallonia, a region of 3.5 million people that's smaller than New Jersey, against the entire EU and Canada, with populations of 500 million and 35 million.

"Difficulties remain," Magnette said, adding that a key issue was how nations and multinational corporations would settle disputes under the deal.

Magnette said the talks would continue, but suggested any deal might not be ready in time for Canadian Prime Minister Justin Trudeau's visit to Brussels next Thursday.

"I plead that, in an amicable way, we jointly postpone the EU-Canada summit and that we give ourselves time," he said.

EU leaders warned that failure to clinch the deal with Canada 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. 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 Freeland to join talks Friday with the EU and Belgium to persuade Magnette to sign off on a deal that Wallonia's legislature has repeatedly rejected.

Juncker said officials from the EU Commission were in talks in Wallonia's regional capital, Namur, with regional leaders and the Canadian minister.

Belgian Prime Minister Charles Michel said he had worked through the night in an effort to broker a deal, including speaking to Trudeau.

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, which is 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 — to 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.