BRUSSELS—The European Union is giving Belgium until Monday evening to decide whether it will agree to sign a trade deal with Canada after a Belgian region has persistently refused to support the accord, Belgian and EU officials said.

A spokesman for Belgian Prime Minister Charles Michel said European Council President Donald Tusk set an "ultimatum" for Monday evening, demanding that Belgium provide Europe with a "clear position" on whether it is in a position to sign the so-called Comprehensive Economic and Trade Agreement, or CETA. The trade deal between the EU and Canada needs the full backing of all 28 member states.

While the Belgian federal government supports the trade pact, it still needs the green light from its five regional authorities before it can give its official approval. The deal has been on thin ice in recent weeks after protests by Wallonia, Belgium's French-speaking region, have kept the country's leadership from supporting the deal.

Mr. Tusk is scheduled to speak again with Mr. Michel on Monday evening, as well as Canadian Prime Minister Justin Trudeau, to whom he will relay his decision on whether to hold the EU-Canada summit Thursday. Both sides were initially expected to formally sign off on the agreement at the summit.

"If [there is] no confirmation from Belgium, our expectation is [that there is] no reason to have the summit [and] no new date to be set," an EU official said.

Some other EU officials, however, remained skeptical about the likelihood of reaching an agreement with Wallonia by Monday evening.

An EU official said it could take at least several weeks, stressing that the problem at hand is first and foremost a domestic issue in Belgium.

After a week of intense back-and-forth with the region's leadership and the European Commission, the body leading the trade discussions for the EU, Wallonia still refused to agree to a compromise, even after further safeguards were added to the text to ensure that concerns about not lowering the standard for public services, the environment and other sensitive areas were addressed.

On Saturday, after a meeting with European Parliament President Martin Schulz, Walloon Minister-President Paul Magnette said, "We still have some little difficulties on the European side—we cannot hide that."

But in a document sent to the Walloon leader Sunday morning and reviewed by The Wall Street Journal, the European Commission responds to questions by the Walloon parliament and provides additional explanations about a longstanding sticking point regarding a controversial court system to settle investment disputes. Critics have said that court system would give greater powers to large multinationals to sue EU governments.

"A national jurisdiction can only apply the norms of domestic law. An international jurisdiction is the only one, which can apply CETA norms. These norms…are an important element in the decision to invest abroad," the document reads.

A separate draft declaration, prepared by the commission for the Belgian government, says that CETA "constitutes a radical reform in investment litigation resolution," because it will lead to the establishment of an arbitration tribunal and appeals court with judges from the EU and from Canada.

"Belgium will ensure that this reform is pursued and becomes a model for future agreements," the commission's draft declaration reads.

Mr. Michel's spokesman said the federal and Walloon governments have been in contact throughout the weekend and Belgium is doing everything it can to provide the EU with a clear response.

But "if Wallonia doesn't move forward, there's not much we can do," he said.

The EU also held 11th-hour talks with Canada over the weekend after Canadian Trade Minister Chrystia Freeland said Friday that reaching a deal was impossible, following hours of talks with Wallonia's leader and EU officials.

On Saturday morning, she struck a more conciliatory tone following talks between with Mr. Schulz. "Canada is ready to sign this agreement," she said.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com, Valentina Pop at valentina.pop@wsj.com and Viktoria Dendrinou at viktoria.dendrinou@wsj.com

(END) Dow Jones Newswires

October 23, 2016 23:25 ET (03:25 GMT)

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