Belgium cannot sign a key EU trade deal with Canada, Prime Minister Charles Michel says, because of objections from one of its regions, Wallonia.
His statement appeared to dash hopes the Ceta deal could be signed by EU leaders and Canada on Thursday.
“We are not in a position to sign Ceta,” Mr Michel said after talks with regional leaders broke down.
It 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 Ceta.
The European Commission had set Belgium a Monday deadline to make its decision on the deal agreed with Canada in 2014, after five years of negotiations.
Wallonia, a staunchly socialist region of 3.6m people, wants stronger safeguards on labour, environmental and consumer standards
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.
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.
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.