European Union president Donald Tusk warned the bloc would be incapable of negotiating new trade deals if Belgium fails to approve the accord with Canada by Friday.

The deal, known as CETA, "could be our last free trade agreement, if we are not able to convince people that we negotiate to protect their interests," Tusk said as he arrived Thursday for a two-day EU summit to discuss trade issues.

Tusk spoke as the head of the French-speaking Belgian region of Wallonia still refused to sign off on the EU-Canada trade accord and asked that a signature next week with Canadian premier Justin Trudeau be delayed indefinitely.

"I hope that Belgium will once again prove that it is a true champion in compromise making, that on Friday we will have an agreement that paves the way for CETA," Tusk said.

Negotiations were ongoing however with Magnette mulling the latest proposal by the European Commission, the EU's executive, in his offices in Namur, 70 km (40 miles) southeast of Brussels.

An EU official said ambassadors from the bloc's 28 member states would meet later on Thursday to discuss the latest compromise offers.

"We are awaiting a response by the Walloon government. The sooner would be the better," said the pro-CETA Belgian prime minister, Charles Michel.

The parliament of the region of Wallonia last week voted to block CETA, meaning that Belgium cannot sign up to the pact and leaving the deal in limbo after seven years of negotiations.

Paul Magnette, the outspoken head of government of Wallonia, has said differences remained too wide on a contested investor protection system that has become a hot-button issue for the anti-free trade movement.

EU leaders fear that if CETA were to fail, it would send a signal to the world that it is difficult if not impossible to reach trade deals with Europe.

- 'So important' -

The struggle to close the deal is also a worry for Britain, with many seeing CETA as a potential model for EU ties with the UK after Brexit.

The Canada deal is opposed by a wide array of groups, who say it is a test model to push through the even more controversial EU-US trade deal called TTIP, still in negotiation.

Activists believe both deals threaten environmental and consumer protection and offer unfair benefits to multinationals.

Tusk stressed that the problem was far bigger than just the Canada agreement, with the leaders also set to discuss on Friday rising anger against the negative effects of global free trade that has fed the rise of populists, such as Donald Trump in the US.

"That is why we need effective tools to protect ourselves against unfair trade practices and why the discussions on trade defence instruments are so important today," he added.

The leaders were due to consider a proposal by the European Commission that would ensure EU companies, most notably steel-makers, win stricter levels of protection against Chinese price dumping and illegal subsidies.

These extra defences are key as China in December is widely expected to receive the official WTO designation of Market Economy Status (MES), meaning that partners will have to treat communist-ruled China as a free market equal when it comes to settling trade disputes.

Within the EU, the proposals are firmly rejected by free-trade purists such as Britain, Sweden and the Netherlands that fear an unstoppable move towards protectionism.

But steel-makers are especially keen for the changes. In Europe, they have been battered by a collapse in prices, triggered by a China-led oversupply and a wave of cheap imports into the bloc.