(Adds details, background)
By David Ljunggren
OTTAWA Feb 8 Canada and the European Union
failed to settle their differences on a proposed free trade deal
this week at top-level talks to hammer out an agreement that is
already well behind schedule.
Canadian Trade Minister Ed Fast and EU Trade Commissioner
Karel De Gucht spent Wednesday and Thursday in Ottawa discussing
contentious issues including agricultural exports, intellectual
property and public procurement.
The EU indicated Canadian demands for increased access for
its agricultural products were one of the major obstacles.
"There are still a number of important gaps to be bridged
before an agreement is reached," EU trade spokesman John Clancy
said in an e-mail on Friday.
"Quality and substance of the negotiations remain paramount
over speed. On agricultural issues, we are now in a more
realistic zone, but we are still not there yet."
Talks on an agreement started in 2009 and were supposed to
have wrapped up by the end of 2011, a date that was later pushed
back to the end of 2012.
Adding to the pressure on Ottawa, European Union leaders
agreed on Friday to push for a free-trade pact with the United
States - 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.
A spokesman for Fast said "further important work remains to
be done, and the process of negotiations is continuing." He
declined to say whether the two sides had set a deadline for the
talks to conclude.
One source close to the talks told Reuters on Friday that
"setback is too strong a word" for the meeting, noting what he
said was both sides' determination to achieve a deal.
Canadian meat producers want an end to high EU import
tariffs they say have effectively shut Canada out of a European
market that consumes 8 million tonnes of beef products a year.
The producers will not reveal how much beef they would like
to export, saying only that "it will be big." One industry
source this week told Reuters "the Europeans can't possibly give
the amount of beef the Canadians are asking for".
The Europeans want Canada to extend patent protection for
major pharmaceutical companies, accept more EU dairy products
and open up internal procurement markets.
The Canada Europe Roundtable for Business trade lobby this
week urged negotiators to wrap up a deal soon, noting any
agreement would have to be voted on by the European Parliament,
which is due to hold elections in April 2014.
If legislators do not deal with the treaty in time, it would
be handled by the next Parliament, meaning ratification could be
delayed by 18 months, the group added.
(Reporting by David Ljunggren; Editing by Todd Eastham)