Emergency talks are under way in Brussels in an effort to save an EU free trade deal with Canada (Ceta), blocked by a Belgian region.
European Parliament head Martin Schulz is to hold separate talks with Canadian Trade Minister Chrystia Freeland and the head of Belgium’s Wallonia region.
Ms Freeland abandoned talks on Friday, after seven years of negotiations.
Failure to reach agreement on Ceta would call into question the EU’s ability to forge other trade deals.
All 28 EU member states support the Ceta agreement, which was to be signed next week.
However, exercising its right under the Belgian federal constitution, Wallonia has called for clarity on safeguards to protect labour, environmental and consumer standards.
Ms Freeland said it was clear that the EU could not reach agreement even with Canada, a country that shared European values.
“The ball is in Europe’s court,” she said on Saturday, arriving at the European Parliament. “We hope that it is possible to find a solution.”
Tweeting that the parties could not stop at the “last mile”, Mr Schulz confirmed earlier that he would meet Ms Freeland first, followed by talks with Paul Magnette, the premier of Wallonia.
What is Ceta?
Canada and the EU would eliminate 98% of tariffs under the Comprehensive Economic and Trade Agreement (Ceta), which was negotiated over five years between 2009 and 2014.
Features include new courts for investors, harmonised regulations, sustainable development clauses and access to public sector tenders.
Environmental activists, trade unionists and some leftist politicians are among those who oppose the deal.
Why does success hinge on one small region?
Wallonia is a region of just 3.6 million people. The EU as a whole has a population of 508 million while there are 36.3 million Canadians.
Belgium’s constitution stipulates that each of its regional governments must back the deal before the federal government can sign it.
Wallonia has remained steadfast in opposing Ceta, seeing it as a threat to farmers and welfare standards.
The French-speaking region has a strong socialist tradition. Its 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.
How big a deal is this for Canada?
The deal was completed under the former Conservative government but is a major priority for the Liberals, who are under pressure to boost the country’s economy, the BBC’s Canada editor Jessica Murphy writes.
They dispatched special envoy Pierre Pettigrew, a former cabinet minister with a wealth of experience in international trade, to help save the flagging agreement.
Federal Trade Minister Chrystia Freeland has repeatedly met European leaders in recent months to shepherd it through.
On Friday, she said agreement now seemed “impossible”.
How does the EU look now?
The failure to clinch the EU-Canada Ceta deal is an embarrassment, writes Laurence Peter, the BBC website’s EU analyst.
The European Commission insists Ceta is not over but it also refuses to unpick the massive text.
Chances of any EU free trade deals with the US, China or India now look remote. Anti-globalisation groups, anxious to protect Europe’s welfare and environmental standards, may feel they are winning the argument.
For now, any Ceta boost for small businesses and jobs has been postponed.
Are there lessons for Brexit?
A very obvious one is that it is going to be difficult for the EU to implement trade and investment deals, perhaps with anyone, writes Andrew Walker, the BBC’s economics correspondent.
For the UK post-Brexit, it suggests two contrasting implications:
- Negotiating a trade agreement that gives British exporters barrier free access to the EU’s single market could be a huge challenge. For sure, there will be some important differences. For the EU, Britain is a more important export market than Canada, so some EU states will have a good deal to lose from failing to agree. But securing the agreement of all of them is unlikely to be straightforward
- On the other hand, negotiating an agreement with other countries outside the EU should become easier. To put it bluntly, the British government will not need to care what the Walloon parliament, for example, thinks