A gigantic free-trade agreement was signed last Friday (October 18) by the European Union and Canada. The deal worth billions of dollars will make Canada the only G8 economy with free-trade access to both the EU and the United States. As Canada’s Prime Minister Stephen Harper emphasized, the new EU-Canada free-trade agreement (FTA) is the biggest trade deal that the country had ever signed. For Europe, the agreement marks a remarkable achievement following the success of smaller FTAs with Singapore and South Korea.
The new FTA is estimated to raise bilateral trade in goods and services by one fifth to 25.7 billion EUR a year. European Commission President Jose Manuel Barroso said that he believed the trade deal would come into force in 2015 after the governments of all 28 EU member states as well as Canada’s 10 provinces approve of the agreement.
The mutual FTA talks began already in May 2009 but were deadlocked for some time due to the unresolved issue with Canadian dairy and European beef. On Friday, the government of Quebec gave its blessing to trade in its cheese and thus removed the last obstacle faced by the negotiators. In order to soothe Quebec’s concerns, the federal government had committed itself to compensate dairy producers for any losses due to the new import quotas.
Across the Atlantic, France have raised the issue of the influx of Canadian beef even though the French cheese is now going to flow into Canada in larger amounts. Nonetheless, Nicole Bricq, French trade minister, is concerned about the possibility of setting a precedent in agriculture when negotiating an FTA with the United States. She also said that she was waiting for a confirmation from the European Commission that this would not happen. The ongoing trade talks with the U.S. are not the only negotiations of the EU on trade and FDI – in fact, the 28-country block is currently running FTA negotiations with more than 80 countries around the globe.
