Canada, EU see trade deal soon; dairy farmers irate

OTTAWA, Oct 16 (Reuters) – The European Union and Canada on Wednesday said they would soon complete protracted talks on a free trade deal, but the powerful Canadian dairy lobby immediately denounced the terms of the agreement as unacceptable.

Canada initially said a deal would be struck by December 2011. It then pushed that back to December 2012 as the two sides struggled to overcome disagreements over pharmaceuticals, financial services, patents as well as beef and dairy exports.

Business leaders in Canada and the European Union have in recent months openly pressured the two sides to seal an agreement. Ottawa and Brussels say a treaty could generate around $28 billion in trade and new business a year.

“We will soon complete negotiations on a Comprehensive Economic and Trade Agreement with the European Union,” Canadian Prime Minister Stephen Harper said on Twitter. He did not give further details.

In Brussels, EU Trade spokesman John Clancy said the two sides hoped “to conclude the negotiations in the coming days”.

Canadian negotiators had to balance the needs of a beef sector which wanted to boost exports to the EU with the concerns of the dairy sector, which said it feared that domestic cheese makers could be swamped if the EU quota were raised.

The Dairy Farmers of Canada group expressed anger and disappointment at an agreement it said would give the EU an additional 32 percent of the Canadian fine cheese market.

“This deal would displace our local products with subsidized cheeses from EU and risk our small businesses being shut down or put out of business. This is unacceptable,” Dairy Farmers of Canada president Wally Smith in a statement.

Canada’s Conservative government has over the years stressed its support for the dairy sector. Many farmers are based in rural areas that tend to vote Conservative.

The offices of Harper and International Trade Minister Ed Fast did not immediately respond to the farmers’ statement.

“I sincerely hope Stephen Harper is not selling out Canadian dairy farmers on this … we’re very concerned with what we’re hearing,” said Tom Mulcair, leader of the main opposition New Democrats.

The Conservatives, who have a majority in the House of Commons, do not need to face another election until October 2015. A slew of recent polls shows them trailing the opposition Liberals of Justin Trudeau.

Two sources close to the free trade talks told Reuters they had been informed Canada and the European Union could announce they had struck a deal in principle, allowing negotiators to tackle the last few remaining problems in private.

“This notion that there would be a tentative deal should be dispelled. There’s no such thing in international trade – you either have a deal or you don’t,” Mulcair told reporters.

Canada’s 10 provinces and the European Union’s 28 members will also have to approve any agreement.

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