Belgian region wants more time to fix EU-Canada trade deal

By Philip Blenkinsop and David Ljunggren

BRUSSELS/OTTAWA (Reuters) - The premier of the Belgian region that is the main impediment to a planned EU-Canada free trade agreement on Wednesday advised postponing a summit next week to sign the deal and taking a few more months to fix outstanding issues.

Walloon's Paul Magnette spoke as pressure mounted on him to drop opposition to the Comprehensive Economic and Trade Agreement (CETA), which would be the bloc's first trade accord with a Group of Seven country.

Canadian Trade Minister Chrystia Freeland flew to Belgium on Wednesday for last-minute talks with Magnette and other European leaders. A spokesperson for Magnette confirmed he held separate meetings with Freeland and EU trade commissioner Cecelia Malmstrom on Wednesday.

Canadian Prime Minister Justin Trudeau and EU leaders are due to formally sign the agreement on Oct. 27.

Almost all 28 EU governments now back the deal. EU leaders meet this Thursday and Friday, but Magnette said he would not be pressured into accepting the deal this week.

Belgium's center-right coalition government is in favor of the pact, but the country's governmental structure means it cannot sign without backing from all five sub-federal administrations representing its regions and linguistic communities.

"I think it would be reasonable to postpone the summit to an unspecified date," Magnette told Belgian radio station La Premiere.

Magnette said discussions with Canadian officials had yielded some useful guarantees but not removed all concerns.

"There are lots of problems. ... This treaty affects the lives of 500 million Europeans and 35 million Canadians for years and years," he said. "There's no urgency. We can take a few weeks, a few months to analyze the problems and overcome them."

Failure to strike a deal with such a like-minded country would call into question the EU's ability to forge other agreements. CETA's supporters say it will increase bilateral trade by 20 percent.

"We are working hard with our European partners so CETA can be signed this fall and implemented next year," said Freeland's spokesman Alex Lawrence.

"If ‎Europe is incapable of signing a progressive trade deal with a country like Canada, this will send a very clear and unfortunate signal," he added.

Wallonia's key concern is over a planned investment court that would allow foreign companies to challenge countries over decisions affecting their investments.

Critics say the system gives multinationals the chance to dictate public policy.

Magnette said he had received assurances that governments would not have to compensate companies if they brought in new regulations, such as tightening environmental standards.

But he remained concerned about the system of arbitration courts, and questioned a special safeguard allowing Canada to restrict agricultural imports if necessary, a right Europe would not have.

Bulgaria is also dragging its heels. The government in Sofia said on Wednesday it would not support the deal until it received guarantees all its citizens could travel to Canada without visas.

In Ottawa, an official working for Immigration Minister John McCallum said Canada was working with Bulgaria on visa-free entry but added no decision had been made.

(Additional reporting by Alastair Macdonald in Brussels; Editing by John Stonestreet and Leslie Adler)