BRUSSELS (Reuters) - The European Union and Canada will attempt a final push on Thursday towards a free trade agreement that could swell trade between the two by more than 20 percent.
EU Trade Commissioner Karel De Gucht and Canadian Trade Minister Ed Fast meet in Brussels to resolve the knotty issues that officials have so far failed to unravel since negotiations began in May 2009. Their talks could extend into Friday.
Negotiators have made progress, but have still been struggling to resolve differences over investment protection, agriculture, public procurement and intellectual property, particularly regarding pharmaceuticals.
The European Commission said the talks are approaching their final stage, with a couple of topics still to be resolved.
Efforts to conclude a global trade deal have been deadlocked for more than a decade, leaving countries and trading blocs to negotiate independently on bilateral agreements.
A free trade agreement (FTA) with Canada would be the EU’s first with a country from the G7 group of major developed economies. Negotiations with the United States and Japan have yet to begin. It already has FTAs with Chile, Mexico, South Africa and South Korea.
For Canada it would be the most significant trade deal since the North American Free Trade Agreement (NAFTA) with the United States and Mexico in 1994 and an opportunity to diversify its exports away from the United States.
Bilateral trade in goods and services between the two was $117 billion (73 billion pounds) in 2011, making the EU Canada’s second-largest trading partner. For the EU, Canada ranks 12th.
A joint study in 2008 concluded an FTA could swell EU gross domestic product by 11.6 billion euros ($14.9 billion) and Canada’s by C$12 billion ($12 billion) within seven years, with EU exports to Canada rising 24.3 percent and Canadian exports to the EU by 20.6 percent.
Tariffs on many traded products are low, although both levy double-digit percentage duties on processed food, Canadian fish and seafood and EU footwear and textiles.
The joint report estimated that the greatest gains would come from an opening up of markets for services.
Canadian critics of the possible deal say Canadian prescription drug costs could rise sharply with stiffer patent protection of EU drugs and that foreign companies could dominate the Canadian provincial procurement market.
In Brussels, business groups want De Gucht to drive through as extensive a deal as possible.
The muted EU opposition contrasts with that surrounding the FTA with South Korea, which took effect last year. European automobile manufacturers body ACEA said it risked opening up the EU to a surge of car imports from Korea, with limited entry for EU cars into Korea.
Editing by Patrick Graham