Canada, EU to Negotiate Free-Trade Pact

Canada, the U.S.' largest trading partner, could be headed for a free-trade agreement with the European Union. Stockwell Day, Canada's international trade minister, said that Canada hopes to begin formal negotiations for a free-trade pact with the European Union "within months."

The topics of the upcoming negotiations will be extremely broad, including customs procedures, sanitary issues, barriers to trade, government procurement, intellectual property, and sustainable development. "As our second-largest trading partner, the Canada-EU relationship holds great potential. During times of economic uncertainty, it is even more important for Canadians to seek out new trade and investment opportunities abroad,” Day said in a statement.

Canada and the EU had $109.4 billion in bilateral trade in 2007, with Canada recording a deficit of nearly $18 billion in merchandise trade. The Canadian government said that it expects such a trade agreement to ultimately expand Canada's economy by $12 billion. Canadian officials have projected that Canadian imports from the EU will increase by 24.3 per cent while its exports from the EU will increase by 20.6 per cent.

Although Canada's trade with Europe represents less than one quarter the value of Canada's bilateral trade with the United States, it is about three times more than Canada's trade with China.