OTTAWA: Canada and the European Union are on track towards signing a free trade agreement by the end of 2011, trade representatives said Wednesday. After “taking stock of progress” made to date, Canadian Trade Minister Peter Van Loan and EU Trade Commissioner Karel De Gucht said that they were “satisfied with the substantial progress that has been made in the negotiations.”
Official talks for a Comprehensive Economic and Trade Agreement between Canada and the EU were launched in June 2009. A sixth round of negotiations is scheduled to start next month in Brussels. Van Loan and De Gucht said liberalisation of trade and services, including the removal of tariff and non-tariff barriers, would provide a 20-billion euros boost to their economies.
Canada and the EU are developed economies with already substantial trade, but De Gucht said that the EU sees opportunities to grow bilateral trade in the services sector and in agricultural products.
“The main potential for a deepening economic relationship lies” in access to provincial procurement, he added. Canada sees broad gains in a variety of sectors, said Van Loan. “There are sensitive areas that remain to be resolved,” he added, optimistic these will be overcome. Canadian farmers, auto workers and unions have expressed concern over drafts of the pact, saying it is “far more sweeping than any trade agreement we’ve ever seen” and “a grave error.”
A study by economist Jim Stanford claimed that a Canada-EU free trade pact would lead to a massive Canadian trade deficit and incremental losses of between 28,000 and 150,000 Canadian jobs. Canadian farmers, meanwhile, warned of the loss of a practice of saving, reusing, exchanging and selling seeds under new intellectual property rights, and worry that Canada’s supply management, farm support programs and the Canadian Wheat Board will be put at risk. Ottawa has dismissed their concerns. The EU in the negotiations has sought to protect its “geographical indications” – trademarked names given to products that correspond to a town, region or country, such as Champagne, which De Gucht views as “intellectual property rights.”
Canada, meanwhile, is fighting an EU seal products ban at the WTO. But neither sticking point is likely to scuttle a deal, officials said. For Canada, the trade negotiations with the European Union are its “most significant trade initiative since the signing of the North American Free Trade Agreement,” said Van Loan. The 1994 North American Free Trade Agreement (NAFTA) created the largest trading bloc in the world by eliminating import tariffs on goods circulating among partners Canada, the United States and Mexico. The European Union, with its 27 member states and a population of 500 million, is Canada’s second-largest trading partner, after only the United States. Van Loan noted that Canada would become the first nation to secure free trade with both the European Union and the United States.
“This deal is said to be unique, a milestone if you like among EU trade deals,” De Gucht commented. “We want to do away with substantially all tariffs within a very short period of time and we are convinced that this will boost trade in both directions substantially,” he said. Following a meeting with Van Loan, De Gucht is to travel to Washington, where he is expected to announce a strengthening of EU-US regulatory cooperation on Friday.
Pundits have speculated that a trilateral deal to combine the world’s two largest trading blocs, the EU and NAFTA, may be in the works. “It’s definitely something they consider a longer term possibility,” Van Loan told AFP.
“There is no doubt in my mind,” he said, “that through the course of negotiations the Europeans have in every step they took with us had in the back of their minds a consideration of how this would impact on a future potential agreement with the United States.”
But De Gucht doused hopes for a trilateral mega-trade pact anytime soon. A Canada-EU-US free trade agreement “is not on our radar screen at the moment,” EU Trade Commissioner Karel De Gucht said after talks with his Canadian counterpart Peter Van Loan. “We have no plans for a free trade pact with the United States,” he explained.
Canada, EU likely to sign free trade pact
