EU Canada Deal Negotiations Falter

Canada and the European Union are struggling to finalize a multi-billion dollar trade pact six months after political leaders said it was sealed, an embarrassment for Brussels as it seeks a far bigger deal with the United States.

Over a celebratory lunch last October, Canadian Prime Minister Stephen Harper and European Commission President Jose Manuel Barroso termed the accord “a landmark achievement for the transatlantic market” that could come into force next year.

But the free trade deal, which could increase bilateral trade by a fifth to 26 billion euros ($35 billion) a year, has run into trouble over issues ranging from financial services to how beef and cheese quotas are shared out.

The drawn-out final stage of talks, with each side accusing the other of going back on promises, illustrates the complexity of sealing sophisticated trade deals and bodes ill for the EU’s more ambitious talks with the United States.

“Negotiations cannot drag on forever,” said Marie-Anne Coninsx, the EU’s ambassador to Ottawa. “It is in the interests of both parties that we get things done.”

The deal would make Canada the world’s only major economy with preferential access to the world’s two largest markets, the EU and the United States, home to a total of 800 million people.

For Europe, the accord is meant to be a template for its trade negotiations with the United States, which would encompass a third of world trade and almost half the global economy.

Both the EU-Canada deal and the accord with the United States seek to go far beyond tariff cuts and to reduce transatlantic barriers to business. Such trade deals are seen as a way for developed countries to generate economic growth and overcome the worst financial crisis in a generation.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza