Trade minister Peter Van Loan and the European Commission trade commissioner formally meet in Ottawa next week to decide if a free trade deal is possible by the end of 2011 but the decision has largely already been made.
Next year will be a sprint to the finish line for what would be Canada’s largest free trade deal since the Canada- United States agreement in 1989, offering increased access to an affluent market of 500 million consumers.
“It is full steam ahead,” chief Canadian negotiator Steve Verheul said Dec. 2 after appearing before the House of Commons agriculture committee to discuss the negotiations. “We are making progress. The talks will continue.”
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In fact, negotiations resume in Brussels in January and then return to Ottawa in April.
Verheul told MPs that bargaining over protection of import-sensitive sectors, including Canadian supply management and many of Europe’s agricultural industries, has not yet started and will be a feature of the winter sessions.
But unlike past trade liberalization negotiations, the Canadian focus is not just on negotiating tariff reductions but also on negotiating rules that will allow Canadian exporters to benefit from lower tariff protections. Many EU import restrictions result from non-tariff barriers.
“Our approach to market access in these negotiations is different from that taken in other negotiations,” he said. “We are negotiating market access as a whole rather than focusing specifically on tariffs alone. We want to achieve real market access and are working on what it actually takes to get into the market.”
Chief agricultural negotiator Gilles Gauthier told MPs that non-tariff barriers include qualitative restrictions on beef, pork and durum wheat, as well as various European hurdles that exporters of GMO varieties face in trying to gain access to the rich European market.
He said all those sectors stand to gain if an ambitious agreement is negotiated.
However, Canada’s negotiators said there would be no compromise on the issue of Canada’s supply management protections.
The Europeans are expected to table proposals this winter that would give EU dairy companies more access to Canadian cheese and milk product markets
“The instructions that we have been receiving from the government is to continue to maintain our position on supply management, which is to defend the integrity of the supply management system in all our trade negotiations,” said Gauthier.
Verheul said that while the two sides have exchanged offers on 90 percent of tariffs, the remaining 10 percent represent sensitive areas.
“In particular, a large portion of the EU’s remaining 10 percent of tariffs is made up of agricultural products,” he said.
Liberal agriculture critic and former dairy farmer Wayne Easter, along with Bloc Québecois MPs, fretted because both countries agreed that no economic sector would be shielded from at least a proposal for reduced protection.
