By Viktoria Dendrinou 

BRUSSELS--A region of southern Belgium continued to block a trade deal between the European Union and Canada on Friday, raising questions about the bloc's ability to negotiate and win approval for more complex and difficult deals, such as a divorce agreement with Britain.

Despite Wallonia's continued refusal to approve the deal, a shift in language used by the region's lawmakers signaled some of the main hurdles may have been overcome on Friday. And European diplomats said they believe the deal will eventually win approval.

Still, Europe's difficulties in getting Wallonia on board with a trade pact which has been repeatedly praised across the bloc as a model with strong environmental and labor protections, underscores the uphill struggle the EU will face when negotiating a deal with the U.K. once it leaves the union.

The Comprehensive Economic and Trade Agreement, or CETA, is the first wide-ranging trade deal the EU has negotiated with one of the world's largest industrialized economies. The agreement has been viewed by some officials as a template for what an accord with the U.K. could look like if Britain leaves the single market--the free exchange of goods and services across the EU.

Failure to sign CETA, which took seven years to complete, highlights the likely difficulty of what are expected to be more controversial and politically charged negotiations with the U.K., which are supposed to last just two years.

"If there are all these problems to have a simple trade agreement with Canada, just imagine an agreement with the U.K.," Maltese Prime Minister Joseph Muscat said, on his way out of a summit of EU leaders here.

While the Belgian federal government supports the trade pact--as do its 27 EU counterparts--it still needs the backing of its five regional authorities before it can give its official approval.

Walloon lawmakers have voiced concerns over the impact of CETA on public services, labor and environmental standards--issues largely addressed in 11th hour negotiations with the commission and Canada.

Chief among remaining concerns is a court system to settle investment disputes, which critics say would give greater powers to large multinationals to sue EU governments.

At stake isn't only the deal with Canada but also the bloc's reputation as a credible trading partner and its ability to negotiate similar deals in the future, especially as talks with the U.S. on a trade and investment pact are faltering.

CETA aims to revoke roughly 9,000 tariffs, covering many industrial goods and agricultural and food items. It also promises to open up competition in the services sector, including banking and insurance.

The deal can be provisionally applied once EU governments and the European Parliament ratify it. But for it to be fully put in place, it will have to be ratified by all 38 national and regional parliaments, requiring a further vote in the Belgian assemblies.

Provisional implementation would include all aspects of the deal relating to trade, whereas the court to settle investment disputes would only come into force with full implementation.

Valentina Pop contributed to this article.

Write to Viktoria Dendrinou at viktoria.dendrinou@wsj.com

(END) Dow Jones Newswires

October 21, 2016 10:19 ET (14:19 GMT)