BRUSSELS (Reuters) - Belgian politicians failed to break their deadlock over a planned EU-Canada free trade agreement on Wednesday, but agreed to resume talks on Thursday in a sign they may be nearing a consensus that would keep the deal alive.
The news prompted Canadian Prime Minister Justin Trudeau to call off plans to fly to Brussels on Wednesday night. He had been due to sign the Comprehensive Economic and Trade Agreement (CETA) at a summit on Thursday.
CETA, seven years in the making, is backed by all 27 other EU governments but rejected by the French-speaking south of Belgium, meaning Belgium as a whole cannot sign it.
Prime Minister Charles Michel worked with the heads of Belgium's regions and linguistic communities to produce a common text to allay concerns about agricultural imports and a dispute settlement system that critics say could be abused by multi nationals to dictate public policy.
"We made a lot of progress, but we are not there yet. We will continue tomorrow, but we are close to an agreement," Oliver Paasch, the head of Belgium's 76,000-strong German-speaking community, told reporters after a third joint meeting on Wednesday.
Trudeau has been ramping up pressure on the EU in recent weeks, saying the bloc would show it was on the wrong path if it could not sign a deal with a progressive nation like Canada.
"The Canadian delegation will not be travelling to Europe tonight. Canada remains ready to sign this important agreement when Europe is ready," said Alex Lawrence, spokesman for Trade Minister Chrystia Freeland.
Lawrence, speaking by phone, said Canada would not be making any further comment until Thursday.
The resumption of talks in Belgium is set for 1000 CET (0800 GMT). Foreign Minister Didier Reynders said a meeting of ambassadors from other EU countries was set for an hour later.
"We will see if it is possible to go to that meeting with a joint Belgian position," he said.
European Council President Donald Tusk said earlier that the chances of the EU-Canada summit taking place on Thursday were waning.
Belgium's centre-right government backs CETA as it stands, but its stance is only shared by the Dutch-speaking Flanders region, where a majority of Belgians live.
European Commission President Jean-Claude Juncker told the European Parliament he was optimistic there would be a deal.
Paul Magnette, Socialist premier of the Walloon region, which has led opposition to a deal, said he was not looking for Ottawa to relaunch negotiations.
"We still have some problems in Europe and Belgium and we're doing our best to solve them," he told reporters.
Tusk said there would be consequences for Europe's global position if it failed to strike a deal with Canada, "the most European country outside Europe and a close friend and ally."
British trade minister Liam Fox said the CETA difficulties showed the importance of Britain reaching an agreement over its future relationship with the EU before it leaves the bloc.
Canada hopes the trade agreement will reduce its reliance on the United States as an export market.
John Manley, the head of the Business Council of Canada, which represents the country's largest companies, said CETA should not be confused with a trade deal being negotiated between the EU and the United States, the larger and even more contentious Transatlantic Trade and Investment Partnership.
"CETA is not TTIP. It is not a stalking horse for TTIP," he said.
Additional reporting by David Ljunggren in Ottawa and Kylie MacLellan in London; Editing by Robin Pomeroy, James Dalgleish and Lisa Shumaker