Prime Minister Stephen Harper says considerable progress has been made towards a Canada-European Union free trade deal, but important issues still need to be resolved. Mr. Harper says Canada will sign a deal only if it is in the best interests of the Canadian economy.

He says an agreement would be important for Europeans because it would help them establish a beachhead as they embark on separate free trade talks with the United States.

French Prime Minister Jean-Marc Ayrault, who is visiting Mr. Harper in Ottawa, agrees that a successful Canada-EU pact could have a positive influence on a future deal with the U.S.

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Mr. Ayrault says the major obstacles to the Canada-EU deal are in the agricultural and information technology sectors.

Mr. Ayrault and Mr. Harper discussed the pact during the French premier's four-city visit to Canada, which began in Ottawa.