EU and Canada Agree Trade Deal
A multibillion-dollar free trade agreement has been made between the European Union and Canada in a bid to boost growth and employment by merging two of the world’s biggest economies. Britain can expect a £1.3 billion boost from the deal and UK Trade and Investment (UKTI) have estimated that UK exports could increase by almost a third.
European Commission President Josè Manuel Barroso and Canadian Prime Minister Stephen Harper met in Brussels to resolve any outstanding issues that had arisen when talks launched between the two sides in May 2009.
The agreement will mean that taxes on most goods and services will be eliminated, and EU dairy exports will have less limitations, as well as making it easier for car manufacturers in Europe to export vehicles to Canada.
Canadian pork and beef farmers could gain the most out of the trade agreement as they stand to get a bigger share of the meat market once that have adapted to EU production and processing rules. Canada will also benefit from more European cheese entering the market, and for the first time, European companies will be able to compete alongside locals for contracts in Canada’s profitable markets.
Canada is the first G8 country that the EU has signed a free trade deal with, and although EU member states and parliaments still need to approve the deal individually, no one is expecting any objections. According to Mr Barroso, both sides had made concerted efforts to come to an agreement that satisfied both the EU and Canada, and it is hoped that the deal can come into effect by 2015.
Mr Barroso said that the “overall benefits of the agreement are expected to raise the level of the European Union’s annual GDP by approximately €12 billion a year”, which tallies with British Prime Minister David Cameron’s belief that the deal is the EU’s biggest trade agreement in its history. Mr Cameron added that it will be “an asset for British businesses” and has the potential to lead to an even bigger deal between the EU and the US.
Canada already has an agreement with the US and Mexico, North American Free Trade Agreement (NAFTA). Aside from the US, the European Union is now the largest trading partner of Canada, giving them access to the 500 million people in the market and possibly making the deal even bigger than NAFTA. Canada’s PM said the agreement is “the biggest deal our country has ever made,” and also means that Canada will be the only G8 country to have such easy access to the two largest markets in the world.
Smaller deals have previously been made between the EU and South Korea, and Singapore, and there are hopes that the size of the latest agreement will lead to the signing off of negotiations with more than 80 other countries – talks with China about an investment deal have already been launched.
“We must now seize on today’s success and focus our efforts on concluding all the other trade deals on the table,” said Mr Cameron. “Concluding those would be worth over £20 billion to the UK and help British business thrive in the global race.”