06/14/2013 11:25 EDT | Updated 08/14/2013 05:12 EDT

Canada-EU Free-Trade Deal: Stephen Harper, Francois Hollande Say Talks Have Been 'Difficult'

PARIS - Prime Minister Stephen Harper and French President Francois Hollande are acknowledging the "difficult" nature of free-trade talks between Canada and the European Union.

The two leaders were asked about the long-running negotiations at a joint news conference Friday in Paris.

"There are obviously, always in negotiations, some areas that are more difficult than others," Harper said.

"But both of our countries look to considerable gains from an eventual agreement, and we will continue to work with that objective in mind."

"In a negotiation it is well understood that there are some hurdles at some points, that there are some difficulties," Hollande added in French.

"We know them in a number of fields. What matters most is to have the willingness to conclude and to overcome what might be difficult at some point in order to (conclude talks)."

Sources close to the talks told The Canadian Press this week the two sides have moved closer during the most recent round of negotiations. Canada did most of the moving, they said, agreeing to allow more European access for bidding in Canada's hydro-electric sector and reducing foreign investment restrictions.

Still, Ireland and France have been reluctant to reciprocate on Canadian demands for greater quota on beef exports.

NDP critic Don Davies says European intransigence is understandable given how "desperate" the Harper government has appeared to cement its first deal with a major economy. The biggest mistake, he says, is publicly elevating trade to one of the top two political and economic objectives.

The Conservatives could also use a success story to take attention way from a series of expense-claim scandals that have dominated headlines for weeks, resulting in the resignation of Harper's chief of staff Nigel Wright.

"I was a union lawyer for 16 years and the No. 1 rule of bargaining is not to convey desperation even when you are. That's exactly what Canada has done and the Europeans know it," Davies said.

"There are five or six important issues outstanding and the Europeans are holding all the trump cards."

The elusive agreement has been a backdrop to Harper's European trip ahead of the coming G8 summit in Northern Ireland.

Harper called an agreement "monumental" while addressing the British Parliament earlier in the week, but also insisted he won't be pressured into a bad deal by what he called "some artificial timeline."

Canadian officials and the prime minister himself say they do not expect an agreement will be concluded in time for the meeting of the world's eight wealthiest countries, which starts Sunday.

But the clock is ticking. Canadian negotiators are under growing pressure to broker a deal with the Europeans before they turn their attention to free-trade talks with the United States. They may have gotten a break on that timeline from Hollande.

France is balking at plans to launch U.S. talks next week unless it gets assurances its protected film industry will be exempt from discussions.

One of the main obstacles is believed to be Canadian beef exports. France and Ireland are said to have objections to the amount of meat that would be allowed under a free-trade deal.

Other issues believed to be on the negotiating table are financial services, procurement limits for provinces and municipalities and drug patent protection.

Trade Minister Ed Fast has maintained a good trade deal could boost Canada's economy by $12 billion annually and create about 80,000 jobs. A joint study on the impact conducted in 2008 suggests the benefits would be greater for Europe.

— With files from Julian Beltrame

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