Canadian Prime Minister Stephen Harper and European Commission President Jose Barroso shake hands as they exchange documents during a ceremony Friday at the European Commission in Brussels, Belgium.
BRUSSELS — Canada and the European Union have struck a tentative free trade deal meant to boost growth and jobs and which European officials hope will provide a blueprint for a much larger — but more challenging — trade pact with the U.S.
The deal agreed to on Friday in Brussels will cut tariffs and red tape and was attained after settling bitter disputes over cheese exports and visa requirements. Companies on each side will have improved access to the two lucrative markets — the 28-member EU’s 500 million people and Canada’s 35 million.
“This is a big deal. It is the biggest deal our country has ever made,” Canadian Prime Minister Stephen Harper said in Brussels.
The value of bilateral trade in goods and services between the EU and Canada was 85 billion euros in 2012 ($116 billion at today’s value), according to the European Commission, the EU’s executive arm. It estimates the agreement will boost trade by almost a quarter.
The deal still requires approval by the European Parliament, EU member states and from Canada on federal and provincial levels. These are expected to be cleared in 2015.
A total of 99 percent of tariffs will be removed immediately once the agreement takes effect, with only a few agricultural products being excluded and managed by quota rules.
In numerical terms, the deal appears to be a bigger win for Canada. The EU, a $17-trillion economy, is Canada’s second-largest trading partner behind the U.S. By contrast, Canada is only the EU’s 12th-largest trading market. The deal would also help reduce the dependence of Canada’s $1.8-trillion economy on imports from the U.S.
However, while Canada’s export potential grows, its products will also face stiffer competition at home.
Indeed, Canada seemed to have made major concessions for the deal in .
Sectors like Canada’s dairy products, particularly cheese producers, are likely to see their market share fall. They will receive help from the Canadian government as imports from Europe ramp up, Harper said. He insisted, nevertheless, that the deal is “in the interest of the vast majority of Canadians.”
European Commission President Jose Manuel Barroso hailed the agreement as a “win-win for both sides” after four years of negotiations.
The EU’s cheese exports proved to be one of the last stumbling blocks in the negotiations, EU officials said. In the final compromise, Canada accepted an increased quota that will allow EU cheese exports to surge by 130 percent.
Another hurdle was the Czech government’s insistence that Canada should waive its visa requirement for Czech citizens. Harper said that Canada will scrap the rule in the coming weeks.
The EU hopes the agreement with Canada will provide a boost to free trade talks with the U.S., which would be the world’s largest such pact. The EU and U.S. combined represent just under half of the global economy.
Officials on both sides of the Atlantic hope to agree on the broad outline of that deal by the end of next year, but that schedule is considered highly ambitious as significant hurdles remain.
“We expect this agreement to set some standards, also for other negotiations, including with our American friends,” Barroso said, hinting that some of the compromises struck with Canada could serve as blueprints for the negotiations with the U.S.MORE IN World/National BusinessWASHINGTON — U.S. Full StoryNEW YORK — The CEO of the company that runs adultery website Ashley Madison is stepping down in... Full StoryWASHINGTON — What once seemed a sure bet — that the Federal Reserve would raise interest rates in... Full Story
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