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If Belgium cannot break a deadlock over the European Union's landmark free deal with Canada by Monday night, EU leaders will consider canceling a signing ceremony scheduled for later in the week, sources said Sunday.
Two officials with knowledge of the negotiations said that EU leaders plan to have telephone talks with Canadian Prime Minister Justin Trudeau about canceling the Thursday summit if Belgium's support for the deal isn't secured by the deadline.
The officials asked to remain anonymous because of the sensitivity of the talks.
The deal needs unanimity among the 28 EU nations, and Belgium needs unanimity among its regions. The francophone region of Wallonia, population 3.5 million, has been the lone holdout and refused to approve the trade pact.
During the past week, Belgium missed two earlier deadlines and Canada briefly walked out of the trade talks before returning the next day.
Yet, if Trudeau is expected to sign at an official summit on Thursday, precious little time is left. Without the guarantee the EU is ready to finalize the deal, there would be no reason to have the summit, an EU official said.
The Belgian region of Wallonia has stood in the way of the CETA accord, short for Comprehensive Economic and Trade Agreement. The deal between over 500 million EU citizens and 35 million Canadians would eliminate almost all tariffs.
Politicians in Wallonia, which is smaller than the U.S. state of New Jersey, argue that the proposed deal would undermine labor, environment and consumer standards and allow multinationals to crush local companies. They have vowed to thwart a pact that the world's biggest trading bloc and Canada are eager to secure.
New attempts were made to sway Wallonia leader Paul Magnette to sign on over the weekend.
Magnette said Wallonia still saw "some small difficulties." A better deal would bolster EU standards and set a strong precedent for future trade talks between Europe and its trading partners, he said.
Canada's International Trade Minister Chrystia Freeland walked away from the talks Friday on the verge of tears, saying the EU appeared incapable of signing the deal. Yet, she came back for talks on Saturday.
EU leaders have warned that failure to clinch the deal with Canada could ruin the bloc's credibility as a trade partner and make it more difficult to strike such agreements with the United States, Japan and other allies.
A similar free trade agreement being negotiated between the EU and the United States is facing far more opposition than the Canada pact. Progress on the American deal appears unlikely until a new U.S. president takes office in January.