Belgium cannot sign a key EU trade deal with Canada, Prime Minister Charles Michel says, because of regional objections led by staunchly socialist Wallonia.
AFP
His statement appeared to dash hopes the Ceta deal could be signed by EU leaders and Canada on Thursday.
Mr Michel said that talks with French-speaking regions had broken down.
This is the EU's most ambitious free trade deal to date but Belgium needs the regions' approval to sign it.
Mr Michel said he had told European Council President Donald Tusk that Belgium could not sign the Comprehensive Economic and Trade Agreement (Ceta).
The other 27 EU governments want to sign Ceta, which has been in the pipeline for seven years.
The European Commission had set Belgium a Monday deadline to make its decision on the deal.
AP
Wallonia, a region of 3.6 million people, wants stronger safeguards on labour, environmental and consumer standards.
On Monday, it emerged that two other Socialist-led, French-speaking parliaments also opposed Ceta.
"The federal government, the German community and Flanders said 'yes.' Wallonia, the Brussels city government and the French community said 'no'," Mr Michel said.
The Belgian Socialists' fears echo those of anti-globalisation activists, who say Ceta and deals like it give too much power to multinationals - power even to intimidate governments.
There have also been big demonstrations in several EU countries against Ceta and the TTIP trade talks between the EU and the US.
On Sunday, the European Commission presented a new clarification to Wallonia on the mechanism for settling disputes with investors.
The rules for trade arbitration are one of the thorniest issues in the deal.
But Belgium's RTBF news reported (in French) that the latest EU document did not satisfy the Walloon politicians.
What is Ceta?
Canada and the EU would eliminate 98% of tariffs under Ceta, which was negotiated over five years between 2009 and 2014.
Supporters say this would increase trade between them by 20%, and would especially help small businesses.
Critics say the deal threatens product standards and protects big business, allowing corporations to sue governments.
Donald Tusk is now expected to tell Canadian Prime Minister Justin Trudeau that the Ceta signing - long planned to take place on Thursday in Brussels - cannot go ahead.
Canadian Trade Minister Chrystia Freeland was bitterly disappointed on Friday when talks with Wallonia broke down and she flew home, during an EU summit in Brussels.
The Ceta trade deal in numbers
98%
The number of tariffs between the EU and Canada that would be eliminated
€500 million
The estimated amount that EU exporters would save in duties annually
- 3.6m The population of Wallonia
- 36.3m The population of Canada
- 508m The population of the EU
Reuters
On Monday, the Walloon Prime Minister, Paul Magnette, warned: "We will never decide anything under an ultimatum or under pressure."
His counterpart in Belgium's Dutch-speaking Flanders region, Geert Bourgeois, said the blockage was "a real shame".
"We're the laughing stock of the whole world. It's bad for Wallonia, for Flanders, for Belgium, for Europe, for the whole world," said the centre-right leader, quoted by Reuters news agency.
Some UK politicians see Ceta as a potential model for a Brexit trade deal with the EU.
Ceta does not involve EU-style free movement of labour. But for British services - 80% of the UK economy - the Ceta terms are less favourable than those they have now.
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