EU agrees trade pact with Canada, open way for transatlantic market


The European Union and Canada agreed a multi-billion-dollar trade pact on Friday that will integrate two of the world's largest economies and paves the way for Europe to do an even bigger deal with the United States.

Canadian Prime Minister Stephen Harper and European Commission President Jose Manuel Barroso resolved remaining issues in Brussels, wrapping up talks launched in May 2009 but stalled for months over quotas for Canadian beef and EU cheese.

"This agreement is a landmark achievement for the transatlantic market," Barroso told a news conference, flanked by Harper. "With political will and a good dose of hard work, there is a way to reach a result that benefits people on both sides of the Atlantic," he said.

The deal, the European Union's first with a member of the G8 club of the world's biggest economies, marks a breakthrough for Brussels' free-trade agenda that so far has only achieved smaller deals with South Korea and Singapore.

The accord is expected to increase bilateral trade in goods and services by a fifth to €25.7 billion a year, according to the latest EU estimates.

"This is the biggest deal our country has ever made," Harper said, adding that it was bigger than the North Atlantic Free-Trade Agreement between Canada, the United States and Mexico.

The European Commission is negotiating trade pacts with more than 80 countries on behalf of the bloc's 28 members following the collapse of the Doha global trade talks.

Delays to agreeing the Canada pact show how difficult such deals can be.

European efforts to sign a free trade agreement with the United States that would encompass half the world economy faced a setback this month when a second round of negotiations was cancelled because of the U.S. government shutdown.

The Canada agreement should provide a boost for EU trade chief Karel De Gucht and could serve as a template for U.S. talks because both deals seek to go far beyond tariff reduction and to reduce transatlantic barriers to business. There are also similar sticking points such as agriculture.

Copa-Cogeca welcomed the agreement it respects EU quality standards but is concerned that Canada will gain increased market access for substantial volumes of beef meat and pig meat under the deal.

“We have seen progress in some areas, for instance on recognition of EU production and quality standards like Geographical Indications (GIs) .This is a good step forward. It’s the first major trading partner that has recognised the principle of our system of GIs, despite some shortcomings,” said Copa President Albert Jan Maat.

“The EU has agreed to give increased market access for large volumes of beef meat and pigmeat which is unacceptable even if it is hormone-free. This is something we want EU Ministers and MEPs to look at when they approve the final deal. Beef is a sensitive product for us, and EU beef production is under threat. Imports would increase substantially as a result of this deal. Also within the beef sector, we would have liked to see better division of our chilled, fresh and frozen beef in favour of frozen beef,” added Cogeca President Christian Pees.

“We have worked extremely hard over the past four years to make this agreement a reality. Businesses in both Europe and Canada will be delighted to see new market opportunities open up at a time when global economic performance remains sluggish. We look forward to seeing the technical aspects of the agreement concluded quickly,” said BusinessEurope Director General Markus Beyrer.

European Conservatives and Reformists group in the European Parliament welcome the deal. Robert Sturdy, Vice Chairman of the International Trade Committee, said: "I am pleased these negotiations have finally come to a conclusion. I look forward to receiving the text of the agreement soon, so the European Parliament can analyse the text and express our views promptly."

"When you realise that the value of bilateral trade in goods between the EU and Canada was €61.8 billion in 2012, you see the huge potential which exists for this agreement to boost economies on both sides of the Atlantic. Access to Canadian public procurement is potentially a huge boost the UK and the rest of Europe. As long ago as 2008 a report put overall potential income gains at €11.6 billion for the EU and €8.2 billion for Canada," he added.

Commenting on the deal Green trade policy spokesperson Yannick Jadot (MEP, France) said: "This far-reaching agreement, which has been negotiated and sealed with little transparency, poses a real threat to agriculture, and could undermine EU rules on environment and consumer protection.

"For the first time, an EU trade agreement includes provisions on investment protection and investor-to-state dispute settlement. This could open the door to a race to the bottom in terms of public policy. It will allow corporations to challenge EU regulations, for example on consumer protection, public health or the environment, with a view to overturning more ambitious rules through an opaque and costly arbitration process," he said.

Of particular concern is a potential challenge to EU rules on fuel quality, which currently prevent oil from environmentally-damaging tar sands being sold on the EU market. In general, the opaque nature of this dispute settlement, and its tendency to disregard public interest and policy, poses a real threat to democracy and governance

Ottawa and Brussels started negotiations to open up access to each other's economies in 2009 and a deal was supposed to be concluded by the end of 2011.

That deadline was pushed back to the end of 2012 but the two sides are still trying to resolve differences over how much beef Canada can export and how much freedom EU companies will have to bid for Canadian government contracts.

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