Canada also wary of EU trade pact

OTTAWA – Canada, keen to reduce its dependence on a weak US economy, is pressing ahead with talks on a free trade deal with the European Union (EU), despite calls from critics who say such an agreement could cause long-lasting damage.

The two sides opened a ninth round of negotiations in Ottawa on Monday on a treaty that both sides hope will be ready next year.For Canada, the pact would be the biggest since it signed the landmark North American Free Trade Agreement with the United States and Mexico in 1994. Ottawa says a treaty with Europe would increase two-way trade by 20 per cent.’That is a huge opportunity for Canada to take advantage of,’ International Trade Minister Ed Fast said last Thursday.Diplomats say several major issues still have to be settled, such as how much to open up agricultural markets, how to protect foreign direct investment and increase access to government procurement, and whether to extend patents on pharmaceuticals.’All of these issues are still very much open to discussion. There is still a lot of work to be done,’ said one EU diplomat in Brussels.Canada-EU bilateral trade in goods totalled C$77 billion (US$76 billion) last year, far shy of the Canada-US total of C$556 billion. Robert Wolfe, a political studies professor and trade expert at Queen’s University, said Canada needed to look beyond the United States.’The US is of course our biggest market and that’s not going to change any time soon … but there’s not a lot of growth going to come in the US market and the competition in that market is ferocious,’ Wolfe told Reuters.Fast and his officials say there are particularly promising opportunities for Canadian firms in the giant EU procurement market, which they say is worth C$2,4 trillion a year.However, critics fear that opening up trade with the EU could spell foreign domination of the Canadian provincial procurement market, which has some restrictions.The left-leaning Council of Canadians parked a large model Trojan horse near the Parliament Buildings on Monday to symbolise what they said were the dangers of a deal being negotiated in secret.’There’s a lot more in it in than the government is saying – it’s not just about trade, it’s about internal economic reforms, and it’s about reforms a lot of people wouldn’t make I think if they had the choice,’ said Stuart Trew, the council’s trade campaigner.Other files raising Canadian concerns are pharmaceuticals and agricultural products.The Canadian generic pharmaceutical industry says the EU’s demand that Canada extend its patent production on drugs would add about C$2,8 billion annually to prescription drug costs.Canada protects its agricultural producers through a system of supply management, which sets producer quotas and prices on farm commodities such as milk and poultry, and slaps stiff tariffs on imports. Ottawa insists it will not bow to pressure to dismantle or dilute its supply management regimes.’Canada will not sign an agreement unless it is in the best long-term interest of Canada,’ Fast said last week.The EU also wants greater assurances that Canada’s provincial liquor boards will ease the tax burden on European wines and spirits.Sceptics wonder what the point of signing a deal is if both sides end up maintaining current restrictions.’They’ll fudge …. they’ll conclude a very broad agreement but not a very deep agreement because a deep agreement would require them to take on the hard issues and there is no political appetite or political support for doing that,’ said Carleton University professor and trade expert Michael Hart.Canada’s lead negotiator, Steve Verheul, conceding there were ‘sensitivities’ on both sides, told legislators recently that ‘I think it’s clear that neither side will get everything it wants’. – Nampa-Reuters