Canada, EU Want to Launch Freer Trade Negotiations

Canada, EU Want to Launch Freer Trade Negotiations
(Canwest News Service – Peter O'Neil)

Canada and the 27-member European Union hope to launch full-scale negotiations on an ambitious trade liberalization agreement in May, International Trade Minister Stockwell Day said Thursday.

Day said he's confident Canada will meet the EU's principal demand – that provincial governments, under political pressure due to rising unemployment in Canada, will agree to open up their lucrative procurement programs to European bidders. European firms are particularly keen to gain the right to bid on major commuter rail projects.

"We don't think it's going to be difficult to give them that assurance," Day told Canwest News Service after his meeting in Prague with Czech Industry Minister Martin Riman. "Whether we're talking provincially or federally we understand in Canada that we prosper because we are a trading nation. We produce more than we can consume, and if we can't trade then we're in trouble. Provinces, regardless of the political stripe of their government, recognize this."

Canadian and EU officials have been engaged since last autumn in a "scoping" exercise launched by Prime Minister Stephen Harper and French President Nicolas Sarkozy, who held the EU presidency during the second half of 2008. They have been assessing the parameters of a deal which, according to a joint study, could generate a total of $32 billion in wealth for both parties by 2014.

"The economic relationship between the EU and Canada has great development potential because the European market is greater than that of the United States," Sarkozy told Canwest News Service prior to the October announcement. Sarkozy said the deal would have to include provisions to improve bilateral investment, labour mobility, technological co-operation, intellectual property protection, and government procurement.

Day said both parties hope to hold the annual Canada-EU summit this May in Prague, with the launch of negotiations being the key announcement. "And I believe it can happen. I'm confident that it can happen."

The Czechs, among the most ardent free-traders in Europe, warned Day that there is rising protectionist sentiment in Europe as a result of the economic crisis. Riman said "there could be varying levels of eagerness" for a deal with Canada.

Commentary: The more I study about regional trade laws globally the more Canada appears to look like a collection of provincial (and at times grossly inefficient or ineffective) political entities which have never developed a collective profit-making concensus on trade or global growth strategies for fear of making itself overly federalist in nature. As Canada at times has problems or issues with NAFTA it might make sense to have alternate trade partners with which to off-set imbalances be they political, economic or regulatory. While Canada pursues ratification of the Canada-Columbia free trade deal it is hard to imagine that it should take precedence (or set precedence) over or for a Canada-EU Free Trade Agreement. As long as the terms also include free movement of Canadian citizens to take employment in the EU, which NAFTA almost appears to mire in red-tape-ism, then I am all for opportunities for expatriate Canadians willing to take up research positions in the EU.