Canada must open up to clinch bilateral trade deal -EU

Thu Feb 21, 2013 12:55pm EST

* EU-Canada free-trade accord under discussion since 2009

* Access to agricultural markets one of stumbling blocks

By Robin Emmott

BRUSSELS, Feb 21 (Reuters) - Canada must offer the European Union broader access to its markets if both sides are to agree a free-trade accord they have been negotiating since 2009, the EU's trade chief said on Thursday.

A free-trade agreement with Canada would be the European Union's first such deal with a major world economy. The United States is watching closely because Washington will launch separate trade negotiations with Brussels later this year.

Following the collapse of the Doha world trade talks in 2008, major economies are pushing ahead with bilateral deals to try to drive economic growth through trade when consumers at home are suffering from the aftermath of the global financial crisis and the euro zone debt crisis.

EU Trade Commissioner Karel De Gucht had hoped to wrap up talks for a free-trade agreement with Canada in Ottawa in early February, when he met his Canadian counterpart Ed Fast.

But negotiations are held up over contentious issues including agricultural exports, intellectual property and the ability being to bid for government contracts on both sides of the Atlantic.

"What was on the table was simply not feasible," De Gucht told the European Parliament's trade committee, when asked by one lawmaker to explain why a deal had not been reached.

"On a number of issues they will have to make additional exceptions," he said, referring to the Canadians.

Rudy Husny, Canadian Minister for International Trade Fast's spokesman, played down any suggestion of an impasse.

Brussels and Ottawa want to reach an agreement as soon as possible "in a way that reflects an appropriate balance of our respective interests", he said.

U.S. President Barack Obama announced last week his intention to push for a free-trade pact with the European Union, which is also shared by the EU's 27 leaders who want to tap a market 10 times the size of Canada's.

Canada, which says free trade with the EU would boost bilateral trade by 20 percent, wants to diversify its trade away from the United States, which takes 75 percent of all Canadian exports. The EU takes just over 10 percent.

But EU import tariffs effectively have shut Canada out of a European market that consumes 8 million tonnes of beef products a year. The Europeans want Canada to extend patent protection for major pharmaceutical companies, accept more EU dairy products and open up internal procurement markets.

The Commission and the Canadian government want to wrap up a deal soon because the European Parliament, which must sign off on any agreement, is due to hold elections 2014 and the change in lawmakers could delay ratification. (Additional reporting by David Ljunggren in Ottawa; Editing by Michael Roddy)

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