![Trade Minister Steven Ciobo and Foreign Minister Julie Bishop in the European Parliament earlier this year. Photo: Nick Miller Trade Minister Steven Ciobo and Foreign Minister Julie Bishop in the European Parliament earlier this year. Photo: Nick Miller](/images/transform/v1/crop/frm/silverstone-feed-data/bb9efd51-32b7-4487-abca-75a16627e719.jpg/r0_0_729_410_w1200_h678_fmax.jpg)
London: Trade Minister Steven Ciobo says Australia will forge ahead on a proposed free trade agreement (FTA) with Europe, despite the embarrassing collapse of the EU's trade deal with Canada.
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However he said Australia may have to settle for a smaller deal that can be signed by the EU Commission alone, rather than a broader FTA that must be ratified by parliaments across the Union.
Mr Ciobo, who is in Europe meeting the region's other trade ministers, said he was still "optimistic" about an Australia-EU deal, despite European Council president Donald Tusk saying that if the Canada agreement fell through it "could be our last free trade agreement".
The Canada FTA, known by the acronym CETA, has been all but vetoed by the regional government of Wallonia in south Belgium.
It was supposed to be signed this Thursday, but the French-speaking Walloons don't like the deal's terms. Their local socialist government objected that it gave too much power to multinationals to override government regulations.
Since their parliament rejected the deal last week, it has come under strong pressure from the rest of the EU to back down, with negotiations over the weekend ending in a 24-hour ultimatum on Sunday.
But on Monday, Wallonian Minister-President Paul Magnette said: "We will never decide anything under an ultimatum or under pressure."
He told Belga news agency an "ultimatum is not compatible with the exercise of democratic rights".
And he tweeted: "Too bad the pressure from the EU on those who block the fight against tax fraud is not this intense."
Belgium's Prime Minister Charles Michel was forced to admit on Monday afternoon that his country would not be ready to sign CETA by Thursday, saying he had been "1000 per cent" available to try and hammer out a solution, but "it wasn't possible to organise".
The Walloons have a long history of disagreeing with their northern compatriots.
Transport Minister Ben Weyts tweeted along those lines.
The bright side. Now the world knows that the problem of the country of Belgium is that it is two countries #CETA— Ben Weyts (@BenWeyts) October 24, 2016
Mr Ciobo said Australia "needs to be sober about the challenges we face" in negotiating a free trade deal with the European Union.
After a scoping period, the negotiations proper are expected to begin early in 2017.
He said he had watched closely the developments between Canada and the EU "and they will help to inform Australia's position with respect to the scoping study and negotiations".
The Canadian deal's problem was that it had to win the approval of member states, he said.
"Maybe we will look at a deal that is solely within the EU Commission's competence and maybe we will look at the pros and cons of making it more comprehensive than that," Mr Ciobo said.
"These are all part of discussions and decisions that will have to be made over the coming months. I'm certainly not fatalistic about it, I'm certainly not pessimistic about it."
Mr Ciobo joked that Australia had a 'secret weapon' for the negotiations – Senator Mathias Cormann, who was born in Eupen in Wallonia.
However Eupen is part of Belgium's small German-speaking community – confusingly, a third and separate faction in the country's fractious internal politics. How helpful this may be in negotiating with the Walloons is debatable.
Mr Ciobo was in the Netherlands on Monday, ahead of next week's visit to Australia by the Dutch royals and a phalanx of businesspeople.
He said the Dutch "embrace free trade" which they recognise as a driver of growth and employment – the country was a "strong friend" of Australia in the preliminary negotiations with Australia over an EU free trade agreement.
On Tuesday the minister is in London to launch a promotion for Brits seeking jobs in Australia, and to continue discussions over a potential future trade agreement with a 'Brexited' Britain.
I spoke with @eucopresident Tusk today - we agree that the EU & its members should continue to work towards the Summit on Thursday. #CETA— Justin Trudeau (@JustinTrudeau) October 24, 2016
However Mr Tusk and Canadian Prime Minister Justin Trudeau have agreed to keep "working towards" the planned signing date on Thursday in case a last-minute solution can be found.