EU-Canada Trade Talks Ahead Of Schedule

Talks on a free trade pact between Canada and the European Union should be wrapped up successfully before the end-2011 target date, Canadian Trade Minister Peter Van Loan said Oct. 18.

Earlier in the day officials from both sides started the fifth round of talks on an agreement that could boost trade flows by billions of dollars a year.

Van Loan, cautioning that the toughest negotiations are still ahead, said he would meet European trade chief Karel De Gucht in early December to review progress so far.

“Unless something earth shattering happens, if we make the anticipated progress in this round, I expect we will probably conclude there is good reason to continue to go forward … Right now we’re well ahead of expectations, so I’m pretty optimistic,” he said.

“Our target has been the end of 2011 and we remain on schedule – in fact, ahead of schedule – to meet that target,” he told Reuters in an interview in his office.

The comments were among the most upbeat Van Loan has made about the talks. The two sides say that within seven years, a deal would generate extra annual income of about 11 billion euros ($15.3 billion) for the EU and eight billion euros for Canada.

Ottawa is keen to diversify its foreign trade given continuing weakness in the United States, which buys around 75 per cent of Canada’s exports.

“We’ve dealt with a lot of issues, but the more difficult ones are always left towards the end,” Van Loan said.

Still yet to be tackled are sensitive areas such as agricultural subsidies and procurement policies.

Canada protects farm industries through supply management, a system of quotas and tariffs to restrict production and support prices that critics say undermines free trade.

In response, Van Loan said the EU has a common agricultural policy with “massive subsidies and all kinds of sensitivities in the agricultural sector in Europe.”

Canada’s policies “are actually quite modest when compared with the protectionist measures other countries have in place for their sensitive agricultural sectors,” he added.

Another challenge is public procurement contracts in the Canadian provinces, which have traditionally been reluctant to open this market up to outsiders.

Van Loan said the provinces learned a lesson last year thanks to “Buy American” provisions in U. S. legislation that shut Canadian firms out of bidding for public works contracts.

Canada and the United States reached a tentative deal in February under which both nations agreed to open up parts of their internal markets to the other’s companies.

“There’s a much better understanding that when you deal with questions like government procurement it’s not just about government procurement here in Canada, it’s actually about jobs and contracts Canadians can get in the other countries,” Van Loan said.

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