By Philip Blenkinsop and David Ljunggren
BRUSSELS/OTTAWA (Reuters) - The head of the European Parliament said late on Friday he would hold emergency talks in a bid to save a free trade deal between the European Union and Canada that looks to be foundering amid protracted disagreements.
Hours earlier, Canadian Trade Minister Chrystia Freeland walked out of talks in Belgium, declaring that the EU was incapable of sealing the deal.
All 28 EU governments support the Comprehensive Economic and Trade Agreement (CETA), but Belgium cannot give assent without backing from its five sub-federal administrations, and French-speaking Wallonia has steadfastly opposed it.
Martin Schulz, president of the European Parliament, said he would meet Freeland at 7:30 a.m. local time (0530 GMT) on Saturday and Walloon premier Paul Magnette at 9 a.m. to revive the talks.
"We can't stop at last mile," he said on Twitter. Although Schulz is not directly involved in the talks on CETA, he has struck up a good working relationship with Freeland.
A spokesman for Freeland said he could not confirm the meeting would take place but said Freeland was still in Brussels.
The agreement, the EU's first with a Group of Seven country, would, according to supporters, increase trade between the partners by 20 percent.
An emotional Freeland earlier quit talks with chief Canadian and EU trade negotiators and Magnette.
"It is now evident to me, evident to Canada, that the European Union is incapable of reaching an agreement – even with a country with European values such as Canada," she said.
"Canada is disappointed and I personally am disappointed, but I think it's impossible," she said.
A source in the European Commission, the EU's executive body, said it had not yet given up hope. EU Trade Commissioner Cecilia Malmstrom said she was sad talks had halted, but still hoped to find a solution.
Wallonia is home to about 3.5 million people, less than 1 percent of the 507 million Europeans CETA would affect, but the EU's flagship trade project rests on the will of its government.
Wallonia continued to have concerns about the threat of surging pork and beef imports from Canada and an independent court system to settle disputes between states and foreign investors, which critics say may be used by multinationals to dictate public policy.
Many EU leaders also suspect the local government in Namur of using its devolved powers to play domestic politics.
CETA was in theory due to be signed at a summit next Thursday in the presence of Canadian Prime Minister Justin Trudeau.
"We feel we've done everything we can do. The ball is in their court," Freeland's deputy, David Lametti, told reporters in Ottawa. Asked whether Canada had room to be more flexible, he replied: "It's fair to say we would continue to negotiate in good faith."
A source familiar with the matter said Trudeau had set a deadline of Monday to decide whether to fly to Brussels. A spokesman did not respond to a request for comment.
IMPACT FOR BREXIT?
Failure to strike a deal with Canada would call into question the EU's ability to forge other agreements and undermine a bloc already battered by Britain's vote to leave it and disputes over Europe's migration crisis.
European Council President Donald Tusk said Europe's credibility was at stake.
The issue is greater than just a trade deal with Canada, the EU's 12th-largest trading partner.
If CETA fails, the EU's hopes of completing similar deals with the United States or Japan would be in tatters.
Britain, which plans to form a new trading relationship with the EU after it leaves the bloc, may be watching with concern.
"If there are all these disagreements to have a simple trade agreement with Canada, just imagine an agreement with the United Kingdom," said Maltese Prime Minister Joseph Muscat.
Geert Bourgeois, premier of Belgium's Dutch-speaking region of Flanders, called the deadlock over CETA a disgrace.
"If there is one task Europe has, it is to conclude trade deals. We are way too small to do this on our own," he said.
Wallonia's lawmakers share concerns voiced by many on the European left that CETA, and a stalled plan for a similar deal with the United States, risk watering down consumer, labor and environmental protections and granting power to multinationals.
(Additional reporting by Alissa De Carbonnel and Alastair Macdonald and Robert-Jan Bartunek in Brussels, David Ljunggren in Ottawa; Editing by John Stonestreet and Leslie Adler)