World Economy
0

EU,Canada Sign Free Trade Deal

EU,Canada Sign  Free Trade Deal EU,Canada Sign  Free Trade Deal

The European Union and Canada signed a free trade agreement on Sunday that aims to generate jobs and growth though it must still clear some 40 national and regional parliaments in Europe in the coming years to enter fully into force.

Canadian Prime Minister Justin Trudeau signed the treaty along with the heads of EU institutions, a step that should enable a provisional implementation of the pact early in 2017 with the removal of most import duties, Reuters reported.

The Comprehensive Economic and Trade Agreement's, or CETA, passage has not been smooth. French-speakers in southern Belgium, a minority within their own small country and accounting for less than 1% of the 508 million EU consumers likely to be affected by CETA, raised objections that held up the deal until a breakthrough on Thursday, confirmed by regional parliamentary votes on Friday.

"All's well that end's well," said European Commission President Jean-Claude Juncker. "We have 20 ongoing negotiations and today we are fixing the global standards the European Union and the European Commission want others to accept."

The Canada agreement is seen as a springboard to a larger EU deal with the United States, known as the Transatlantic Trade and Investment Treaty, which has been the target of labor unions and environmental and other protest groups.

EU Trade Commissioner Cecilia Malmstrom said TTIP talks were not dead, contrary to what some politicians in Germany and France have said, but would need to wait for the next US president—taking office in January—to resume.

Supporters say CETA will increase Canadian-EU trade by 20% and boost the EU economy by €12 billion ($13 billion) a year and Canada's by $9 billion.

For Canada the deal is important to reduce its reliance on the neighboring United States as an export market.

For the EU, it is a first trade pact with a G7 country and a success plucked from the jaws of defeat at a time when the bloc's credibility has taken a beating from Britain's vote in June to leave after 43 years of membership.

"This has been a very long process. A huge majority of people in Europe are in favor of Europe, but there are concerns and we need to engage with them," Malmstrom said. "The Commission cannot do that alone."

CETA aims to revoke roughly 9,000 tariffs, covering many industrial goods and agricultural and food items, including beef and fish. It also promises to open up competition in the services sector, including banking and insurance.

Canada has aggressively pursued the trade pact with the EU in a bid to boost its tepid outlook for growth at a time when its economy has been hit hard by the commodity-price swoon.

The deal can be applied provisionally once the European Parliament also ratifies it in December. Provisional implementation will include all aspects of the deal relating to trade, whereas a controversial court to settle investment disputes between states and companies would only come into force with full implementation.

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com