29 Countries Want A Trade Deal — And Wallonia Is Still Blocking It

The Walloons still aren't budging.

Thursday is supposed to be signing day in Brussels for a major free trade agreement between Canada and the European Union, an agreement seven years in the making, which involves 29 countries with a combined population of more than 500 million.

The media was lined up. Special pens were set aside. VIPs were making travel plans, including Canadian Prime Minister Justin Trudeau and many European leaders.

But the Walloons are still saying, "No deal."

Don't worry, many others have also had to ask: Who are the Walloons? And how have they managed in the final moments to upend the trade pact known as the Comprehensive Economic and Trade Agreement, or CETA?

The Walloons come from Wallonia, a tiny, French-speaking enclave in the south of Belgium. There are roughly 3.5 million people in Wallonia, less than 1 percent of the whole European Union, but given the complex nature of the EU's decision-making process, Wallonia's vote counts when it comes to CETA. And it voted against the trade pact.

Negotiations fell apart last Friday, after Wallonia declined to sign the pact. More talks have been taking place this week, but there's still no agreement.

Under the rules, all 28 EU states need to sign on for the deal to move forward. Belgium's federal government is ready to sign, but can't do it without the approval of all the country's regions, including Wallonia.

Ongoing Talks

The Walloon premier, Paul Magnette, says more time is needed to work out important issues. There's concern in Wallonia that the trade pact could undermine public services, weaken health and environmental standards and give too much power to multinational companies. There are also concerns about an increase of Canadian pork and beef imports into this agricultural region.

Wallonia has seen its economy suffer in recent years, and many blame globalization. Its coal and steel industries have collapsed. Caterpillar recently announced plans to close a plant in Wallonia, eliminating 2,000 jobs.

It is now the poorest of Belgium's three regions, with unemployment running about 12 percent, roughly twice as high as elsewhere in the country.

Canada's trade minister, Chrystia Freeland, went back to Ottawa after talks collapsed last week, saying her government was done negotiating the agreement that would eliminate 98 percent of trade tariffs between the EU and Canada. She suggested the problem was an internal one that needed to be resolved by Europeans.

"Now the ball is in Europe's court and it's time for Europe to finish doing its job," she said.

European negotiators have been trying to hammer out a deal with Wallonia's socialist government in time for Thursday's signing ceremony. Some concessions have been made to appease Wallonia, but there's been no breakthrough yet.

The failure to reach an agreement over CETA — which would bring together just two developed economies — comes at a time when other complex trade deals are in the works, including the Trans Pacific Partnership, which involves the Americas and Asia, and the Transatlantic Trade and Investment Partnership, which includes the U.S. and the E.U.

British negotiators are also watching this deal carefully. The U.K. is trying to figure out a way to stay in the European single market as it leaves the European Union.

Despite the lack of a breakthrough on Wednesday, EU President Donald Tusk tried to remain upbeat. He told EU legislators, "The summit tomorrow is still possible."