Canada downplays signing EU trade deal ahead of G8

Canada downplays expectations of signing an EU trade deal ahead of G8 summit next week

Associated Press

TORONTO (AP) -- The prime minister's chief spokesman said Friday that he doesn't expect Canada will be in a position to sign a free trade agreement with the European Union when the Canadian leader heads to Europe next week for the G-8 summit of world leaders.

Andrew MacDougall said that while the two sides have been negotiating for quite a while, Canada has not reached an agreement it is comfortable with.

"We're actually trying to sign the most comprehensive trade agreement that Canada's ever signed. It involves multiple levels of government and we're not there yet," MacDougall said during a telephone press conference.

"We're down to a few outstanding issues. I won't speculate or comment on what they are but negotiations are ongoing and I don't expect that we'll be in a position to sign a deal next week.

"But that said, we're at the negotiating table pressing hard and we'll continue to negotiate hard in Canada's interests," he said.

Conservative leader Stephen Harper will be in Europe for eight days to participate in the June 17-18 summit in Northern Ireland. He will also visit the United Kingdom, France and Ireland. Ireland holds the EU's rotating presidency.

Canada is under pressure to conclude a deal before the EU turns its attention to free-trade negotiations with the United States this summer.

Harper has said that a free trade deal between his country and the European Union could help the EU establish a beachhead as they embark on separate free trade talks with the U.S.

French Prime Minister Jean-Marc Ayrault, who visited Harper in Ottawa in March, agreed that a successful Canada-EU pact could have a positive influence on a future deal with the U.S.

If a US-EU trade deal is reached, it could be the world's largest free trade pact.

Canada's Harper hopes to ink a deal with the EU in an attempt to diversify his country's trade away from the slow-growing U.S. market, its largest trading partner.

Jim Flaherty, Canada's finance minister, said despite Europe's struggles, Canada remains very interested because the EU is still the largest market in the world in terms of the size of its middle class.

The Canada-EU deal would make it easier for Canadian companies to invest in, and sell to, the 17-member EU with its 500 million consumers.

Among the issues believed to be on the negotiating table are financial services, Canadian beef exports, country-of-origin rules for vehicles, procurement limits for provinces and municipalities, and drug patent protection.

Ayrault said during his Canadian visit that the major obstacles to the Canada-EU deal are in the agricultural and information technology sectors.

Canada wants the European Union to grant more access for beef than Brussels is prepared to give and greater leeway to ship Canadian-assembled cars to the EU. The Europeans want Ottawa to lengthen the effective patent protection for brand-name medicine in Canada.

Harper has said that Canada will sign a deal only if it is in the best interests of the Canadian economy.

Opposition New Democrat Party Leader Thomas Mulcair said Friday that he's concerned Harper will sign a bad deal out of desperation to wrap up negotiations before the Europeans shift their focus to the American talks.

"The talks that have been going on for some time now seem to be leading to a bit of an impasse," he said. "But we're quite concerned that in the current context, the desperation of the prime minister leads him to sign a bad deal. Desperation is a singularly bad adviser."

Harper departs for Europe on Tuesday and will spend the week in England, France and Ireland before joining leaders from the world's eight richest economies for a two-day summit at a lakeside Lough Erne resort near Enniskillen, Northern Ireland.

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