President of the European Commission, Jose Manuel Barroso, has met Canada’s Prime Minister, Stephen Harper, as both sides are about to finalize a free trade agreement after more than four years of negotiations. According to the Commission’s spokesperson, the talks have well advanced and Mr. Barroso tweeted that he was confident to finish off soon. The Comprehensive Economic and Trade Agreement (CETA) is supposed to bring EU-Canada trade and investment relationship to a higher level.
According to Eurostat, bilateral trade between EU and Canada was worth about 60 billion EUR in 2012, with Canada being EU’s twelfth most important trading partner. Last year, trade with Canada accounted for 1.8% of the Union’s total external trade. In contrast, EU is Canada’s second biggest export market with about 9.5% share in Canada’s total international trade, just after the United States. Most significant aspect of the mutual trade relationship is mainly investment and services. The latter accounted for almost a third of the total trade between the two. As to the investment, in 2011, European investors held investment of about 220 billion EUR while Canadian FDI in the EU was almost 140 billion EUR.
Although negotiations on the agreement started already in May 2009 and were hoped to be finalized by late 2012, the talks were deadlocked on a number of problematic issues – mostly concerning agriculture. While Canada was mainly interested in EU’s access to its beef, the 28-member bloc focused on lowering tariffs on European exports of cheese. Official sources say that this time the deal will indeed permit the EU an increased access for cheese sales. Moreover, the new CETA should eliminate 98 percent of Canadian tariffs on European goods and provide Canadian companies with access to 500 million European consumers.
EU-Canadian FTA is believed to be used as a possible template for the current US-EU free-trade accord talks in form of the Transatlantic Trade and Investment Partnership. Both EU-Canada as well as EU-USA will possibly become the biggest FTAs ever created.
