While the American government was imploding, Canada signed a free-trade agreement with Europe

Let me repeat, while the American government was shut down, bickering itself to the brink of calamity, old boring and responsible Canada was busy putting the final touches on a free-trade agreement with the European Union. A long time in the making, and fraught with its own delays and troubles, the agreement shows how Canada is taking a serious look at expanding its horizons away from its symbiotic but dependent relationship with the United States.

While it was fun to watch admittedly adorable disagreements over European cheese and Canadian cattle, some harsher realities of Canada’s provincial autonomy and the EU’s continuing fractiousness came out in negotiations. This is why, before anyone breaks out the sparkling ice wine, we must remember that every country in the European Union and every province in Canada will have to approve the treaty individually before it can be fully put into force.

But once it is, it will mean that Canada is one of the few countries in the world that enjoys free trade with the world’s two largest markets, the EU and the United States. Certainly, the EU goal of $35bn a year in bilateral trade pales in comparison to the nearly $700bn traded annually between Canada and the U.S. But the deal might just be the cheese course to the main dish of the nascent US-EU free trade agreement.

Here are some highlights of the treaty, courtesy of Philip Blenkinsop at Reuters: 


The deal, expected to come into force in 2015, is expected to increase bilateral trade in goods and services by a fifth to 25.7 billion euros ($35 billion) a year.

For the European Union, this could raise annual economic output by 11.6 billion euros per year. Canada has put its economic gain at around C$12 billion ($11.67 billion), with the creation of 80,000 jobs.


The European Union and Canada have agreed to eliminate tariffs on 99 percent of products and services. For EU exporters, the saving on duties will be some 500 million euros.


The EU will eliminate duties on a range of Canadian agricultural products, from wheat to maple syrup. Canada will be able to export 80,000 tons of pork and 50,000 tons of beef free of duties to the European Union.

EU dairy producers will be able to export more than double the amount of ‘high quality’ (i.e. not for industrial use) cheeses to Canada.


Canada will protect the special status of certain EU agricultural products. Under EU rules, “geographical indications” may only come from a specific country or region, such as parma ham from Italy and Camembert cheese from Normandy in France.


The trade deal aims to create a more level playing field between Canada and the European Union, the latter having complained that pharmaceutical patents are not sufficiently protected in Canada.


Federal and sub-federal levels of government in Canada have committed to open their markets for procurement to European suppliers, for example in urban transport.

Federal government contracts are estimated to be worth some C$15-19 billion per year and those of Canadian municipalities at around C$112 billion.


The European Union will eliminate its tariffs of 10 percent on cars and up to 4.5 percent on auto parts from Canada, while Canada will recognize a list of EU car standards that will make it easier to export vehicles to Canada.


The European Union sees around half of the overall GDP gains coming from liberalizing trade in services – financial, telecoms, energy and maritime transport.


The agreement aims to remove barriers to and enhance protection of foreign direct investment between the two parties, currently worth some 360 billion euros.

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