Monday 24 October 2016 1:38 pm

No deal: Belgium shuts down EU-Canada trade agreement over Wallonia concerns

A landmark EU-Canada trade pact was thrown into chaos last night after Belgium failed to strike a deal with its rogue Wallonia region, prompting one of the country’s leading politicians to brand it a “laughing stock”.

The impasse left the EU scrambling to save the ambitious trade agreement which had been seven years in the making.

Last night, European Council head Donald Tusk was forced into a frantic attempt to keep a high-profile signing ceremony with Canadian PM Justin Trudeau on the cards. After a phone call with Trudeau, Tusk tweeted: “We think Thursday’s summit still possible. We encourage all parties to find a solution. There’s yet time.”

In frustration at the floundering deal, Geert Bourgeois, minister-president of Flanders, one of the other Belgianregions which has rubber-stamped the deal, said: “We’re the laughing stock of the whole world. It’s bad for Wallonia, for Flanders, for Belgium, for Europe, for the whole world.”

Read more: Canada-plus is the way forward for Brexit Britain

The chaos follows a week of brinkmanship between the EU institutions, the Belgian Prime Minister Charles Michel and the Walloon parliament as the trio tussled over the terms of the Comprehensive Economic and Trade Agreement (Ceta).

After a weekend of negotiations, PM Michel was forced to admit yesterday that he could not secure a deal to address the concerns of Wallonia by a Monday deadline that the EU had imposed. Wallonia, which has a socialist leader, objects to Ceta provisions on labour laws and legal protections for farmers.

Read more: Belgium told to fix Wallonia rift over EU-Canada trade deal

Stephen Booth, co-director of the think tank Open Europe, branded the saga “a continual embarrassment to the EU”.

“There’ll be frustration from Canada and, clearly, other EU member states are increasingly unhappy this is being held up by a regional parliament,” he told City A.M.

All the other 27 members have given their approval for the deal, meaning the package now rests on securing the agreement of Wallonia.

The latest hold-up has cast a shadow over the prospects of the UK securing a swift exit deal in the two-year window afforded under the Article 50 process.

“It’s not clear the UK will necessarily go down this road [where regional parliaments have a say on the deal],” Booth said. “Nevertheless, this is clearly a risk.”

MPs on the UK’s European Scrutiny Committee will get their chance to grill trade minister Liam Fox over the failure of Ceta in an emergency hearing tomorrow.

The cross-bench committee, which includes leading pro-Brexit campaigners such as Labour’s Kate Hoey and Tory Jacob Rees-Mogg, will grill Fox on the implications of the Ceta collapse for potential UK-EU trade deals.