BRUSSELS (AP) — Canada and the European Union were set to finalize Friday a landmark free trade agreement meant to boost growth and employment. European officials hope the pact will also inject momentum in talks on a much larger, but more challenging, trade deal with the U.S.
Canadian Prime Minister Stephen Harper and European Commission President Jose Manuel Barroso were expected to hash out the final details in Brussels before announcing the tentative deal, which has been negotiated since 2009.
The agreement would make it easier for Canadian companies to invest in and sell to the 28-member EU and its 500 million consumers, and vice versa. The deal will lower tariffs, streamline regulation and cut red tape that hampers trade.
The European Union, a $17 trillion economy, is Canada's second-largest trading partner behind the U.S. The deal would also help reduce the dependence of Canada's $1.8 trillion economy on imports from the U.S.
The government in Toronto called the deal the most important trade agreement for the country since the 1987 free trade deal with the U.S.
"There are 35 million people in Canada and 500 million there. Not a bad trade," Finance Minister Jim Flaherty said late Thursday.
The value of bilateral trade in goods between the EU and Canada was 62 billion euros in 2012 ($84 billion at today's value) and another 23.5 billion euros in services, according to the European Commission, the bloc's executive arm. It estimates the agreement will eventually boost bilateral trade by up to a quarter.
Once the final deal is inked, the agreement will require approval by the European Parliament, EU member nations and from Canada on federal and provincial levels.
For the EU, Canada is only the 12th most important trading partner but the agreement will provide a boost to the nascent free trade talks between the EU and the U.S.
Officials on both sides of the Atlantic hope to agree on the broad outline of that deal, despite many outstanding issues, by the end of next year — a highly ambitious schedule for what would be the world's largest free trade deal. The two economic giants combined represent just under half of the global economy.
The deal would allow Brussels and Washington to set standards for many industries, which would then become de facto global standards, handing firms in both economies a competitive advantage over rivals in Asia and elsewhere.
A study commissioned by the EU estimates that a US deal could add about 120 billion euros to the EU's gross domestic product and 95 billion euros to U.S. GDP.
The talks with the U.S. suffered a minor setback this month when the U.S. side had to cancel a long-planned negotiation round in Brussels because of the government shutdown. The next round is likely to take place next month.
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