The European Union's hopes of signing a landmark free trade deal with Canada this week appeared to evaporate on Monday as the Belgian federal government failed to win the consent of French-speaking regional authorities.

 

European Council President Donald Tusk had given Belgian Prime Minister Charles Michel until Monday, three days before the planned signing, to resolve the impasse. But a meeting Michel hosted with leaders of the five sub-federal authorities whose permission he needs to go ahead ended in stalemate.

 

Tusk is now expected to contact Canadian Prime Minister Justin Trudeau and call off an EU-Canada summit that was scheduled for Thursday in Brussels, although all sides insist that the CETA pact, seven years in the making, remains in everyone's interest.

 

"We cannot give a yes," Paul Magnette, the premier of the Wallonia region, told reporters as he emerged. He said the main problems remained not with Ottawa, which has already agreed to modifications in the deal, but with the EU authorities.

 

Other Socialist-led regions, including bilingual capital Brussels, are ranged behind the Walloons, while Dutch- and German-speakers back Michel's liberal-led federal coalition:

 

"We have a Yes from the federal, Flemish and German-speaking communities and it's a No from the others," said Flanders premier Geert Bourgeois after the meeting at Michel's residence lasting less than an hour.

 

"It's a real shame," the center-right leader 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."

 

Michel said it was too early to say CETA was dead and that the Walloons and he were still open to dialogue but that he must inform Tusk that Belgium was not in a position to consent now to a deal that all 27 other EU member states are ready to support.

 

"NO ULTIMATUM"

 

EU negotiators have stressed that they are willing to keep talking with the Walloons -- Canada's trade minister left in frustration after talks in the regional capital Namur on Friday and said the problems were now internal ones for the Europeans.

 

The only deadline, EU officials emphasized, was caused by the need to help Trudeau schedule his week and that there had been no attempt to push Magnette by fixing an ultimatum.

 

Andre Antoine, Walloon parliament speaker, told Reuters earlier on Monday: "Ultimatums and threats are not part of democracy. We want a deal, we want a treaty, but we want to negotiate it with a minimum of courtesy and respect," he said.

 

"A reasonable time frame would be the end of the year. With that, we could get there."

 

CETA supporters say it would increase trade between the partners by 20 percent and boost the EU economy by 12 billion euros ($13 billion) a year and Canada's by C$12 billion (US $9 billion).

 

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 say allows multinationals to dictate public policy.

 

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

 

Dutch language Flemish newspaper De Morgen said on Monday that the Magnette's stance was both a matter of principle and opportunism, a chance to boost his reputation and to become leader of the center-left in Belgium.

 

The issue goes beyond 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 United States 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.

 

($1 = 0.9186 euros)

 

($1 = 1.3331 Canadian dollars)