Canada and the European Union has today reached an “agreement in principle” on a free-trade treaty that brings near an end to more than four years of negotiations.
Canadian prime minister Stephen Harper and European Commission president Jose Barroso announced the agreement today following a meeting in Brussels.
The pact, which would need the approval of EU national governments and the European Parliament, will eliminate about 98 per cent of all Canadian and EU tariff lines on the first day of its implementation.
The sticking points have included Canadian access to the EU’s beef and pork markets and European access to Canada’s dairy market as well as to Canadian public-procurement contracts at the sub-federal level. A free-trade agreement has been Mr Harper’s signature trade initiative as he seeks to diversify Canada’s trade away from the US.
Canada has relatively more to gain from a deal, according to a joint study released in 2008 . An agreement would increase annual Canadian gross domestic product by €8.2 billion, equivalent at the time to about 0.77 per cent of the country’s output, the joint study showed. The EU economy would increase its annual output by €11.6 billion, or 0.08 per cent, according to the study.
While the EU bought 8.9 per cent of Canadian exports in 2012, Canada represented 1.9 per cent of total EU exports, according to Statistics Canada and Eurostat data. The US received three-quarters of Canada’s exports in August.
The agreement moves beyond trade by including provisions on investment, government procurement and intellectual property, a key requirement for EU negotiators.
Canada is opening up its procurement market to European companies and extending patent protection to its pharmaceutical companies. The pact includes an investment chapter that will provide investors with “greater certainty, stability, transparency and protection for their investment,” according to a Canadian government statement.
Canada still has the right to review EU investments to determine whether they are of “net benefit” to the country and meet national security requirements. The size threshold that triggers a government review of foreign acquisitions will be raised to C$1.5 billion for EU companies.
Reuters
