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European Trade Commissioner Karel De Gucht addresses a news conference at the EU Commission headquarters in Brussels February 13, 2013. (FRANCOIS LENOIR/REUTERS)
European Trade Commissioner Karel De Gucht addresses a news conference at the EU Commission headquarters in Brussels February 13, 2013. (FRANCOIS LENOIR/REUTERS)

free-trade talks

EU demands more concessions from Canada Add to ...

Canadian and European Union officials each blame the other side for coming up short in ongoing free-trade negotiations.

EU Trade Commissioner Karel De Gucht threatened Thursday to abandon the talks unless Canada offers more.

“What was on the table simply didn’t please me, so I didn’t make an agreement,” Mr. De Gucht told the European Parliament’s international trade committee in Brussels. “They need to make additional steps and, if not, there will not be an agreement.”

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Mr. De Gucht did not specify what concessions the EU wants, but he urged the Canadian government to “take additional steps” in a number of areas.

The EU is seeking tougher protection for pharmaceutical patents, a sizable boost in duty-free cheese quotas, and the ability to sell to sensitive provincial Crown corporations.

Ottawa, meanwhile, is seeking lower duties on Canadian-made cars as well as substantial access for beef and pork exports.

Canadian officials said Europe has yet to fully meet Ottawa’s “core” demands.

“We continue to appreciate and encourage the EU's high level of ambition, especially on the core issues of importance to Canada,” Rudy Husny, spokesman for Trade Minister Ed Fast, said Wednesday.

He said the federal government is looking for an agreement that “reflects an appropriate balance of our respective interests.”

The urgency of reaching a deal was underscored last week when U.S. President Barack Obama announced the imminent start of free-trade talks with the EU. Canada risks being left behind if the EU turns its attention to the much larger potential of the U.S. market.

That is what happened after talks between Canada and South Korea fell apart. Both the United States and the EU did their own deals with that country, leaving Canadian exporters at a competitive disadvantage in a key Asian market.

The tit-for-tat with the Europeans follows a meeting in Ottawa earlier this month between Mr. De Gucht and Mr. Fast that exposed a still-wide gap in negotiations.

“Public relations is part of the game and Canada should be shouting about how the Europeans have been less than forthcoming about increasing Canada’s market access, especially in the agri-food, automotive and procurement areas,” said trade lawyer Lawrence Herman of Cassels Brock in Toronto.

“The EU is one of the world’s poster boys for protectionism so it’s a bit rich for De Gucht to make it appear as if Canada is not being forthcoming,” he added.

Despite the increasingly testy rhetoric, both sides say they want to reach a deal in the coming weeks. The Europeans want to use the agreement with Canada as a model for proposed deals with the United States and Japan. With many of the EU’s 27-member countries in recession, trade is seen as a key way to lift the region’s economy.

Prime Minister Stephen Harper’s government, too, wants a major win after pushing trade to the top of its economic priorities. Ottawa has several other trade deals in the works, including the Trans-Pacific Partnership, and deals with India and Japan. Federal negotiators would like to shift their attention to those agreements

Lowering tariffs and breaking down other trade barriers with Europe would give Canadian companies better access to a market of 500 million consumers. Federal officials estimate that a deal would boost two-way trade by 20 per cent, create 80,000 new jobs and add $12-billion to Canada’s annual gross domestic product.

The proposed deal would remove 99 per cent of tariffs after seven years.

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