The Walloon government was awaiting new proposals from the European Commission, according to a source close to Walloon premier Paul Magnette. They would need to be presented to the regional parliament, although no date had been set for this.

The EU is still hoping to find a solution before an EU-Canada summit set for Thursday, when the deal would be signed.

Canadian Prime Minister Justin Trudeau has set a deadline of Monday to decide whether to fly to Brussels, according to a source familiar with the matter. Magnette has previously said the summit should be delayed to allow more time to deliberate.

Canadian trade minister Chrystia Freeland said Canada was still ready to sign the pact and that negotiations on its fine points were over.

“We have done our job. We have finished negotiating a very good agreement. Now the ball is in Europe’s court,” she said after meeting Martin Schulz, president of the European Parliament, and before a flight home.

“I hope that I can return in the next days with my prime minister to sign the treaty as planned.”

All 28 EU governments support the Comprehensive Economic and Trade Agreement (CETA), but Belgium cannot give assent without backing from its five sub-federal administrations. French-speaking Wallonia has steadfastly opposed it.

Schulz, who is not directly involved in CETA talks but has good working ties with Freeland and who is centre-left like the Walloon government, also held an emergency meeting with Magnette in a bid to keep the deal alive.

“The door for every step forward is open but it’s quite clear that the problems on the table are European problems,” Schulz said.

“In my eyes, there are no problems that cannot be resolved.”

Freeland quit talks on Friday with chief Canadian and EU trade negotiators and Magnette, declaring reaching a deal with the EU was “impossible.”

Magnette said on Saturday, however, his discussions with Canada were concluded and the remaining issues to be worked out were for the EU executive to address.

“We have still some little difficulties among Europeans,” he said, without giving details. “We won’t hide that so we still have to work and discuss for a certain amount of time.”

The agreement would be the EU’s first with a Group of Seven country. Supporters say it would increase trade between the partners by 20 per cent and boost the EU economy by 12 billion euros (C$17.4 billion) a year and Canada’s by $12 billion.

Wallonia is home to about 3.5 million people, less than one per cent of the 507 million Europeans CETA would affect, but the EU’s flagship trade project rests on the will of its government.

Walloons have concerns about the threat of surging pork and beef imports from Canada and an independent court system to settle disputes between states and foreign investors, which critics fear hands power to multinationals.

Once the core of the Belgian economy, Wallonia has seen coal mines shut and steel jobs disappear and distrusts globalization. Just last month, Caterpillar announced plans to close a plant there, cutting some 2,000 jobs.

Many EU leaders suspect the local government in Namur is using its devolved powers to play domestic politics.

The issue is greater than just a trade deal with Canada, the EU’s 12th-largest trading partner.

If CETA fails, the EU’s hopes of completing similar deals with the U.S. or Japan would be in tatters, undermining a bloc already battered by Britain’s vote to leave it and disputes over Europe’s migration crisis.

— Philip Blenkinsop is Reuters’ chief correspondent for Belgium and Luxembourg. Alissa de Carbonnel is Reuters’ energy and environment correspondent in Brussels. Additional reporting for Reuters by David Ljunggren in Ottawa.

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With most EU attention focused on Britain’s shock decision to quit the bloc, everyday work continued in Brussels on Friday where an “appeal’s committee” of representatives from the 28 member states failed to agree on whether to extend the licence for the herbicide glyphosate after it expires next week.

Contradictory findings on the carcinogenic risks of the chemical have pitted farming and chemical lobbies against consumer and environmental groups.

The European Crop Protection Association said banning the chemical could harm farmers, increase food prices and damage the environment. But lingering safety concerns made some EU countries reluctant to approve its continued use.

The Commission — after failing to win support for a 15-year renewal of the licence — had offered a 12- to 18-month extension to allow time for a further study by the European Chemicals Agency (ECHA).

But France and Malta voted against that and seven countries, including Germany, Italy and Austria, abstained, according to EU sources, meaning there was not the required majority.

“The Commission regrets that no decision could be taken by the member states, in spite of its efforts over recent weeks to accommodate requests and concerns,” a spokeswoman for the EU executive said.

The issue is now on the Commission’s agenda for Monday. If the licence is not extended, manufacturers will have six months to phase out products containing the widely used herbicide.

Monsanto has defended the safety of glyphosate and has not ruled out a legal appeal if its licence is not extended.

Jonas Oxgaard, senior analyst at investment bank Bernstein, has estimated Monsanto could lose earnings of up to US$100 million if the EU were to halt glyphosate sales.

Environmental groups said the Commission should take its cue from the lack of political consensus over the chemical.

“We are glad EU governments have represented their citizens,” said Bart Staes, a Green group member of the European Parliament. “Forcing through the authorisation would raise major democratic concerns about the EU’s decision-making process.”

— Alissa de Carbonnel is an energy and environment correspondent for Reuters in Brussels.

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Contradictory findings on carcinogenic risks have thrust the chemical into the centre of a dispute among EU and U.S. politicians, regulators and researchers. Citizen and environmental groups have urged governments to exercise caution.

The EU executive had offered a 12- to 18-month extension to allow time for further scientific study by the European Chemicals Agency (ECHA), in hopes of allaying health concerns. Its earlier proposal to renew the glyphosate licence for up to 15 years had failed to win support in two meetings this year.

The compromise proposal failed to win the qualified majority needed for adoption, an EU official said, adding the European Commission will discuss the issue at a meeting on Tuesday.

Seven member states abstained and 20 backed the proposal, a German environment ministry spokeswoman said. Only Malta voted against, diplomats said.

Without a majority decision that meets the required percentage of total EU population, the EU executive may submit its proposal to an appeal committee of political representatives of the 28 member states within a month. If there is again no decision, the European Commission may adopt its own proposal.

Monsanto on Monday defended the safety of its widely used herbicide, and said glyphosate’s license should be renewed for the full 15 years.

“Further delays in this process represent a significant deviation from the EU regulatory framework and set a concerning precedent for other active substances,” Philip Miller, Monsanto’s vice-president of global regulatory and government affairs, said in a statement.

Monsanto has not ruled out a legal appeal if approval lapses after June 30, requiring a six-month phase-out of glyphosate-containing products. The industry lobby has criticized the regulatory uncertainty.

The controversy hangs over German chemicals group Bayer’s US$62 billion offer in May to buy Monsanto. Germany was among states which abstained on Monday and has opposed U.S.-based Monsanto’s genetically modified seeds.

Glyphosate use is key for Monsanto in the U.S. and Brazil, where the U.S. company depends on sales of genetically modified corn and soybean seeds that can resist the widely used weed killer.

In Europe, sale and use of such seeds faces strong opposition and plays virtually no role in commercial farming. But an EU refusal of a new glyphosate licence could signal stricter regulation of the broader agricultural chemicals industry.

It would also hit Monsanto’s bottom line: If the EU were to halt glyphosate sales, the company could see earnings reduced by up to $100 million as its premium branded Roundup product is diverted to the generic market, said Bernstein senior analyst Jonas Oxgaard.

Smelling gas

Quashing the licenses in Europe might further embolden glyphosate foes elsewhere.

“With this decision all they do is cast doubt… and create fear and confusion amongst Europe’s consumers,” Graeme Taylor of the European Crop Protection Association said.

Environmental and citizen campaign groups have called for an EU-wide ban in the absence of scientific certainty.

“Extending the glyphosate licence would be like smelling gas and refusing to evacuate to check for a leak,” Greenpeace EU food policy director Franziska Achterberg said in a statement.

The prospect of a European ban could complicate EU-U.S. trade talks.

The U.N.’s Food and Agriculture Organization (FAO) and World Health Organization (WHO) said in May glyphosate was unlikely to pose a risk to people exposed to it through food.

The finding matches that of the European Food Safety Authority (EFSA), an independent agency funded by the European Union, but runs counter to a March 2015 study by the WHO’s Lyon-based International Agency for Research on Cancer (IARC).

That agency said the chemical was probably able to cause cancer and classified it as a ‘Group 2A’ carcinogen. It assessed whether the substance can cause cancer in any way — regardless of real-life conditions on typical levels of human exposure or consumption.

— Reporting for Reuters by Sabine Siebold in Berlin and Alissa de Carbonnel in Brussels and Ludwig Burger in Frankfurt. Additional reporting by P.J. Huffstutter and Karl Plume in Chicago.

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Experts from the EU’s 28 nations had been due to vote on a proposal to extend by nine years licensing of the herbicide, widely used by farmers and gardeners.

EU sources said the delay was due to opposition in France and Germany, which have big farming and chemicals industries.

Without their support, the European Commission lacks the majority it needs for a binding vote: “Since it was obvious that no qualified majority would have been reached, a vote was not held,” a Commission spokeswoman said.

The EU executive had hoped for a decision to stop the clock ticking on a six-month phase-out period for glyphosate products when the existing authorization lapses at the end of June.

In response to opposition, it had already postponed a vote in March and shortened the licence to nine years from 15. The new proposal would ban some products because of the substances they combine with glyphosate, which could add to risks.

The banned list of so-called co-formulants includes POE-tallowamine, which is no longer sold in glyphosate-containing pesticides in Germany.

Germany had planned to abstain from voting because ministries run by different parties in the ruling coalition remain at odds, a government spokesman told Reuters.

Last month, the European Parliament recommended that glyphosate should only be approved for another seven years, and should not be used by the general public.

As the debates were continuing in Brussels, German chemicals group Bayer made an unsolicited takeover bid for U.S. seeds company Monsanto, for which the regulatory controversy over glyphosate has been one of a number of recent problems.

“This delay undermines the credibility of the European regulatory process and threatens to put European farmers… and chemical industries at a competitive disadvantage,” Monsanto’s vice-president of global regulatory and governmental affairs, Philip Miller, said.

If no decision is reached to extend the licence, a spokesman said the company could not rule out seeking legal remedy.

Arguments

Contradictory findings on its carcinogenic risks by various scientific bodies have thrust glyphosate into the centre of a dispute among EU and U.S. politicians, regulators and researchers.

Public campaigning by citizen groups has made some EU governments wary of re-approving the substance.

Experts from the U.N.’s Food and Agriculture Organization (FAO) and World Health Organization (WHO) this week said glyphosate is unlikely to pose a risk to humans exposed to it through food. It is mostly used on crops.

The finding matches that of the European Food Safety Authority (EFSA), an independent agency funded by the European Union, but runs counter to a March 2015 study by the WHO’s Lyon-based International Agency for Research on Cancer (IARC).

That agency said glyphosate is “probably” able to cause cancer in humans and classified it as a “Group 2A” carcinogen. It says it assesses whether the substance can cause cancer in any way — regardless of real-life conditions on typical levels of human exposure or consumption.

Environmental groups have questioned the independence and transparency of scientists testing for health risks and called for the EU to err on the side of caution.

“It’s time for the Commission to change course,” said Greenpeace’s EU food policy director Franziska Achterberg.

— Alissa de Carbonnel is an energy and environment correspondent for Reuters in Brussels. Additional reporting for Reuters by Michelle Martin in Berlin and Kate Kelland in London.

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The tit-for-tat trade restrictions — a response to U.S. and EU sanctions imposed over Russia’s actions in Ukraine — have hurt farmers in the West for whom Russia is by far the biggest buyer of EU produce.

But they will also hit consumers at home, isolating them from world trade to a degree unseen for more than two decades.

Creamy French cheeses, Australian ribeye steak and seafood risottos are heading off the menu at restaurants after the ban on imports of all fish, meat and dairy produce.

“Prices will go up and certain food stuff will disappear,” said Alexei Paperny, whose mid-priced Moscow cafe the Children of Paradise — named after a classic French film — was still packed on Friday evening.

“We’ll do our best to survive… I can’t imagine how some restaurants and cafes can exist under the circumstances.”

He described the year-long ban on products from the U.S., the EU, Canada, Australia and Norway as “Russian sanctions against Russians” — a frustration shared by many customers at his cafe.

“It would have been fairer if state officials gave up their Mercedes and began driving Russian-made Zhigulis (Ladas),” said a diner who gave his name as Yan, while sipping red wine.

Sushi deficit

Wealthy with petrodollars while the country’s energy reserves drove a strong economy, Russians have enjoyed a rich choice of eateries since the 1991 Soviet collapse — and ate out with the gusto of a generation that still remembered times when shop windows were bare and the streets were empty after sundown.

Sushi is particularly popular, ubiquitous across the country and even gracing the menu of Italian and French restaurants. But it’s a fetish some might now have to do without.

Rosinter, one of Russia’s largest restaurant chains which runs sushi cafes nationwide, said more than 50 per cent of the food it serves up is imported. It expects sanctions to exacerbate a business downturn already happening as political instability pushes the economy into recession.

“It is quite a difficult situation,” Rosinter spokeswoman Elena Mazur said. “(We) face a lot of work, in terms of menu-engineering and pricing.”

For one manager of a chain of sushi stands the potential impact was more direct.

“We are all worried. We don’t want to lose our jobs,” he said, asking not to be cited for fear of official retaliation over his criticism. “There is no Russian salmon.”

“We’ll live without oysters”

The effect of sanctions in the West is already tangible. European dairy firms have halted production of cheese and butter destined for Russia and Norwegian salmon prices are expected to fall 10 per cent this week. [Related story]

But experts say Russia’s consumers may also take a financial hit: Fitch Ratings agency predicted “Imports from EU and the U.S. will gradually be substituted by higher (priced) imports from other countries.”

Most likely to feel the loss of foreign delights are Russia’s middle-class, who were at the heart of protests against President Vladimir Putin’s return to the presidency.

“The measure is likely to further alienate the urban middle class,” said Alisa Lockwood, head of Europe and CIS analysis at His Country Risk. But she added: “Decision-makers at the Kremlin have probably calculated that patriotic sentiment will outweigh the pain.”

Polls already show most Russians back reprisals for Western sanctions over what it calls Russia’s support and arming of pro-Russian rebellion in eastern Ukraine — something Moscow denies.

Some 76 per cent of Russians polled by the independent Levada Centre just before the imposition of the trade sanctions said they agreed with the government’s plans.

One restaurant in Yekaterinburg has already come up with a special — albeit short — “Sanctioned Menu” of Russian-produced foods and other food experts are echoing the patriotic fervour.

“I am proud that we’ve stopped being the boy who gets bullied. It’s about time,” restaurateur Andrei Dellos told the Russian TV channel Dozhd. “There won’t be oysters, but we’ll make do. We’ll live without oysters.”

Boost for local producers

While Russian farmers hope to turn Western exporters’ loss into their victory, others in the food industry are sceptical that local producers can fill the gap.

Some note how long it has taken Russia’s farm industry to recover from chaotic years of poverty after the collapse of the Soviet system — when livestock was slaughtered en masse for lack of feed — and point out that it still lacks resources.

“To produce so much milk, you first need to raise the cow. No matter how much you pray, a cow won’t take less than three years to grow into a heifer,” quipped Pavel Grudinin, the director of the Lenin State Farm and a Moscow region deputy.

“Russia’s main problem is not that we are inundated with cheap imported food, but that we ourselves produce little.”

Nonetheless others are optimistic. Farm manager Viktor Zubenko is glad of the chance to sell more of his produce to consumers in need.

“I can’t say we expected these sanctions but we hoped for them,” said Zubenko from Russia’s Rostov province, where his potato fields stretch for miles around.

— Olga Petrova reports for Reuters from Moscow. Additional reporting for Reuters by Maria Kiselyova and Alissa de Carbonnel in Moscow and Natalia Shurmina in Yekaterinburg; writing by Alissa de Carbonnel.

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