Talks to wrap up a multi-billion-dollar free trade deal between Canada and Europe have stalled, diplomats said, raising concerns the agreement could be put on hold as Brussels switches its attention to a much bigger pact with the United States. The Ottawa-Brussels negotiations to open up access to each others' economies were launched in 2009, and were originally presented as a straightforward bid to reinvigorate growth and generate around $28 billion in trade and new business a year.
But diplomats and officials told Reuters wrangling over the amount of beef Canada will be able to export to the EU, and EU demands for greater ability to bid for Canadian government contracts, are bedevilling the final stages of the agreement. "This was supposed to be done in November, then we said February, but now there's no clarity ... No one wants to walk away from this, but it could be put on ice if things remain stuck for a prolonged period," said an EU diplomat. An EU agreement with Canada would be its first with a member of the G7 club of major economies. It would also be one of a new generation of deals that not only remove import tariffs but also harmonise rules on how companies do business across borders.
The European Commission's negotiating teams and the EU diplomats who shape such pacts already often work into the small hours and need Canada out of the way to focus on the biggest of the new deals they are facing, with the United States. "Everyone in Brussels is shifting efforts and attention to the United States ... The challenge lies in maintaining the political momentum," said Adrian van den Hoven, a director at the EU's biggest industry lobby Business Europe.
Any failure of the Canadian deal could have an impact on the US negotiations, due to start in July. Brussels officials were hoping to use the Ottawa accord to show Washington they were serious about opening up their sensitive agricultural markets to a large, developed economy. An EU-US trade deal, which would encompass half the world's economy and a third of global trade, could increase EU economic output by 65 billion euros ($85 billion) a year, according to a European Commission estimate.