BUSINESS

Canada-EU Free Trade Deal Will Be Scrapped If Canada Doesn't Give More: Trade Official

02/21/2013 03:27 EST | Updated 02/21/2013 03:27 EST
CP

The European Union is threatening to shut down a long-awaited trade deal with Canada unless the Harper government offers more in the way of concessions, according to multiple news reports.

What was on the table simply didn’t please me, so I didn’t make an agreement,” European Union Trade Commissioner Karel De Gucht told an EU parliament trade committee on Thursday, as quoted at Bloomberg News.

“They need to make additional steps and, if not, there will not be an agreement,” he added.

The Harper government shot back, arguing that the EU has also failed to meet “core” Canadian demands regarding the deal, the Globe and Mail reported.

We continue to appreciate and encourage the EU’s high level of ambition, especially on the core issues of importance to Canada,” the Globe quoted Rudy Husny, spokesman for Trade Minister Ed Fast, as saying.

Husny said Ottawa wants an agreement that “reflects an appropriate balance of our respective interests.”

The sudden tiff potentially jeopardizes a trade deal that officials on both sides of the Atlantic saw as an important test run ahead of a similar, but much larger, free trade deal between the U.S. and the European Union.

Among the sticking points for the EU is access to Canada’s dairy market, which is protected by a supply management system. The EU also wants longer patent protection on pharmaceuticals, something that could cost Canadians as much as $900 million annually in additional health care costs.

For its part, Canada is pushing for better access to Europe’s pork and beef markets, which are similarly protected by EU regulations, and for lower import duties on Canadian-made cars.

The EU is one of the world’s poster boys for protectionism so it’s a bit rich for De Gucht to make it appear as if Canada is not being forthcoming,” Toronto trade lawyer Lawrence Herman told the Globe.

“Public relations is part of the game and Canada should be shouting about how the Europeans have been less than forthcoming about increasing Canada’s market access, especially in the agrifood, automotive and procurement areas,” he added.

De Gucht travelled to Ottawa earlier this month to meet with Trade Minister Ed Fast, but no final free trade deal was expected to emerge from those meetings.

Negotiations between Canada and the EU began in 2009, with a deadline for talks set for late 2011. That deadline was later moved to late 2012.

Though both sides continue to insist they want a deal and expect to conclude one shortly, the delays have made some observers nervous.

"This trade agreement needs to be concluded fairly soon,” Jason Langrish, director of the Canada Europe Roundtable for Business, told Reuters. “The longer it goes on the more potential problems could arise politically."

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