The Canadian government has always seen Europe as a potential economic partner. Despite its efforts, though, it has never been able to create a permanent link to European markets. There were some minor proposals in 2008 about creating a free-trade agreement; none of them, however, resulted in anything substantial. This year’s negotiations look promising, though, since both the EU and Canada seem serious about them.
If negotiations are successful and both parties sign the free-trade agreement, it would eliminate duties on trade between them, even in such sensitive areas as agricultural subsidies. This pact will be worth $3 billion to the Canadian economy, and citizens will benefit from it the most. Many say that the impact of this agreement will be comparable to that of the North America Free Trade Agreement (NAFTA) on the Canadian economy.
Overall, Canada’s net production is far greater than its net consumption, so it would benefit greatly from the possibility to expand into EU markets (which count up to 500 million people) with little or no limitations. The proposed arrangement includes a much broader spectrum of proposals than just tariffs, though. Provisions for dealing with technical barriers, increased transparency of provincial and federal procurement contracts, and less strict agricultural policies are just a few examples of what is expected to appear in the agreement.
One of Canada’s aims is for Europe to stop blocking Canadian efforts to export beef to its markets. (European authorities expressed concerns over the growth supplements used.) This agreement would reduce dependence on the United States market, and an increase in market size is likely to result in more jobs.
One problem that has arisen lately in anticipation of the new market is that local authorities have realized that they could lose the ability to reward various interest groups that support them. Policies concerning agricultural production are sought by such lobbying groups because they are outdated and award them considerable unintended advantages. The proposed new market could deal with these problems, however.