Canada-Europe trade deal brinkmanship hinges on Walloons, but also visas

European Union trade policy seems to be teetering, thanks to a high-risk standoff with Belgium's Wallonian regional government, set to climax Friday morning as leaders gather for European Council strategy talks.

Wallonia piled on more pressure late Thursday by dismissing the EU's latest offer, which included concessions on everything from social security to data protection.

"At this stage, the document is still insufficient," Wallonia President Paul Magnette told reporters in the regional capital Namur.

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But a second standoff also blocks unanimous support for Canada's trade deal, and this one's comparatively easy for Justin Trudeau to fix.

Romania and Bulgaria have yet to remove their reservations to signing the Comprehensive Economic and Trade Agreement, also known as CETA, because of delays in resolving a longstanding visa dispute.

​"We have a big issue here. This is my nightmare scenario," said Sorin Moisa, a Romanian member of the European Parliament. 

Neither country intended to stand in the way of the trade deal. The visa issue is separate.

But politically it became linked after Canada appeared to delay resolving the issue. The two European countries took their stand. Now everyone's a bit stuck.

"The Romanians simply do not trust the Canadians to make the announcement on visas after they have withdrawn their reservation," Moisa said. "Because the Canadians have changed their minds so many times on nuances ... we simply want to see the decision publicized or formalized before we withdraw the reservation."

CETA ally sidelined

Moisa used to lobby in favour of CETA as the interlocutor for Canada's trade deal among the key S&D block of socialists and democrats — until he felt forced to resign over Canada's inaction on the visa file.

Most of what he hears around Brussels now, he says, suggests momentum against the deal. Supporters have kept silent.

Eighty-eight MEPs signed a letter in support of Wallonia's stand. 

Moisa described supporting Wallonia's right to veto as "very dangerous" and a way to kill democracy in the European Union: the Walloons are undermining the European Parliament as the body tasked with debating and ratifying trade deals.

In the meantime, the Romanian politician has been in the middle of talks towards an agreement and timelines for lifting the visa requirements. 

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European media report, and Moisa confirms, that as of May 1, 2017, visa requirements would be lifted for Romanian and Bulgarian nationals who were issued Canadian visas over the last 10 years.

All other Romanian and Bulgarian nationals could travel visa-free before the end of 2017.

Prime Minister Justin Trudeau has had several phone conversations with his Romanian and Bulgarian counterparts in recent weeks, trying to reassure the Europeans that they shouldn't hold back on CETA because the visa solution was close. But they expected their announcement long before now.

"The wise thing to do would be, in my opinion... for Canada to announce its decision today," he said.

"If Belgians decide OK, we'll go ahead tomorrow morning, the problem is Trudeau will be sleeping," Moisa said. "So what do we do, we hold the summit here until late afternoon when Trudeau wakes up to publish the decision?"

This is unfair, for an issue that's been there for a decade," he said. "We should have solved this issue irrespective of CETA anyway.- Sorin Moisa, Romanian member of the European Parliament

"This is unfair, for an issue that's been there for a decade," he said. "We should have solved this issue irrespective of CETA anyway."

It's unclear what Canada is waiting for, short of executing a strategy to hold back until it's clear CETA will proceed.

But things may quickly devolve into a chicken-and-egg-type dilemma: what comes first, the visas or the signing? 

Immigration Minister John McCallum's office still won't confirm an agreement was reached.

Will Wallonia reconsider?

Prime Minister Charles Michel, who represents Belgium at the European Council talks Thursday and Friday, wants to sign CETA, but is not supposed to without the consent of his regional counterparts.

He risks a constitutional court challenge if he gives in to pressure and signs anyway — but some legal opinions suggest the negative votes in the Wallonian parliaments are non-binding.

Michel said Thursday he needs Wallonia's backing.

"I have a lot of respect for the role of our parliaments and democracy. But democracy means that at one moment you need a decision."

CETA has already taken seven years to negotiate. In the face of opposition, contentious investor arbitration clauses were reworked last winter.

Talks continue toward an additional "joint interpretative declaration" to clarify how text should apply if disputes arise over member states' rights to regulate in areas like environmental or labour policy.

Diplomats told Reuters that the latest version of the declaration attempted to address Wallonia's concerns about agricultural trade and dispute arbitration.

Additional declarations have been drafted and circulated by the EU this week to ease other late sticking points, such as Greek concerns over adequate protections for geographic indicators like "feta" cheese.

Parliament meets Friday

International Trade Minister Chrystia Freeland remained in Brussels Thursday, after spending Wednesday travelling to Namur to speak directly to Magnette, the minister-president of French-speaking Wallonia.

Earlier plans to travel on to Oslo, Norway, for this weekend's ministerial meeting of the World Trade Organization have been placed on hold. She met with Belgium's foreign minister Thursday and will meet the Walloons again Friday.

The last-minute changes to her travel schedule appear to contradict her comments earlier this week that the ball is in Europe's court — but her office repeated Thursday evening that this is now a question for Europeans to decide.

CETA opponents in Europe — for whom Magnette has become a charismatic standard-bearer — portray Canada as a bully, exerting pressure on sovereign local governments to give in. 

Freeland's office describes her meetings as an effort to demonstrate Canada is listening to concerns and doing everything it can. 

Magnette will address Wallonia's parliament on Friday morning.

It's unclear now what the real deadline is for deciding to proceed with a signing ceremony at a planned Canada-EU Summit on Oct. 27.

When Tuesday's trade ministers talks failed to approve signature, Friday was set as a new deadline. Magnette has rejected that and wants negotiations to continue.

Now the last-ditch deal-saving may stretch into the weekend.

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