Canada has long had an interest in enhancing its economic links with an increasingly affluent and united Europe, partly to provide greater diversity in its trade and partly for the broader geopolitical reason of becoming more active in the Atlantic community. During the past 50 years, Canada has sought those enhanced economic links through liberalized trade and investment, mainly in the multilateral General Agreement on Tariffs and Trade. In light of technological change, however, Canada decided that, with the Canada-U.S. free-trade agreement of 1988, it would also seek viable bilateral and regional deals while supporting the creation of the new World Trade Organization to succeed the GATT.
More recently still, the Doha round of trade talks has been suspended indefinitely after seven years of desultory debate. In light of the unfortunate fact that the multilateral route currently shows little promise, Canada has embarked on something of the same policy as the United States, the European Union and a host of other countries, developed and developing alike, in seeking “WTO-plus” bilateral agreements that can be seen as building blocks on the way to renewed multilateralism. Accordingly, having first joined the United States and Mexico in the North American free-trade agreement, Canada has more recently concluded bilateral deals with several Latin American countries and demonstrated the practicality of a transatlantic accord by agreements with Norway and Switzerland (in the context of the European free-trade area).
But a free-trade or other trade-enhancing agreement with the EU, now the world’s largest market, remains the major goal. In addition to being Canada’s second-largest trading partner, the EU is also Canada’s second most important source and destination for foreign investment. Yet Canada is one of only eight WTO members without preferential access to the European market (which Mexico, among others, enjoys). With the reduction or removal of remaining barriers to trade and/or investment, bilateral exchanges will grow substantially.
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Canada is moving toward a far-reaching free trade agreement with the European Union that advocates say will end a long-standing dependency on the U.S. market.
While the specifics of the agreement haven’t been discussed, Canadian and European officials could begin negotiating as soon as October 17, just three days after Canada’s federal election.
Canada’s Trade Minister, Michael Fortier and his staff have been in talks with EU Trade Commissioner Peter Mandelson and European government officials for the past two months. Recently a senior EU official involved said the talks aimed at starting “deep economic integration negotiations,” reported the Globe and Mail.
If the deal goes ahead, Canada would be the first developed country outside the EU to have the kind of access to those markets normally reserved for EU members.
“Its one of the best things we could do, the best thing we could do for our country,” said Jason Langrish, executive director of the Canada Europe Roundtable, a group working to promote Canada-Europe trade.
While critics of NAFTA, the free trade agreement Canada already has with the U.S., may denounce the agreement as only furthering the interests of large corporations, Langrish said that opposition will likely be less than there was to NAFTA.
“This is a very good way for us to offset our relationship with the U.S.”
Langrish said deeper integration with the EU would give Canadian exporters running into trouble with American protectionism another option. He said Canada often comes to the trade table with the U.S. with a weak hand because American officials know Canada has nowhere else to go.
He adds that we would be dealing with an economic block that has the same social and cultural values as Canada, such as state-funded healthcare.
Langrish also said it would give Canada a technological leg-up because we would get Europe’s green technology.
That could include tidal energy and wind technology, as well as public transport.
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LONDON — Canadian and European officials say they plan to begin negotiating a massive agreement to integrate Canada’s economy with the 27 nations of the European Union, with preliminary talks to be launched at an Oct. 17 summit in Montreal three days after the federal election.
Trade Minister Michael Fortier and his staff have been engaged for the past two months with EU Trade Commissioner Peter Mandelson and the representatives of European governments in an effort to begin what a senior EU official involved in the talks described in an interview yesterday as “deep economic integration negotiations.”
If successful, Canada would be the first developed nation to have open trade relations with the EU, which has completely open borders between its members but imposes steep trade and investment barriers on outsiders.
The proposed pact would far exceed the scope of older agreements such as NAFTA by encompassing not only unrestricted trade in goods, services and investment and the removal of tariffs, but also the free movement of skilled people and an open market in government services and procurement – which would require that Canadian governments allow European companies to bid as equals on government contracts for both goods and services and end the favouring of local or national providers of public-sector services.
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