Canadian Business Leaders Eye Free Trade With Europe, China
More than 90 per cent of Canadian business executives believe Canada has benefited from existing free trade agreements (FTA), a survey of 200 senior executives by national business law firm Miller Thomson LLP showed. Canada has FTAs with the U.S. and Mexico (NAFTA), Panama, Jordan, Peru, Chile and Israel.
About 60 per cent of Canadian business leaders said free trade with the European Union should be a government priority and 37 per cent said the government needs to urgently examine Canada's trade relationship with China.
Canada and the EU have participated in six rounds of free trade negotiations since they began in October 2009 and aim to have agreed on the criteria within a year. A seventh round of talks is set to take place in Ottawa in April. There are no formal free trade talks between Canada and China, and the two countries are yet to enact a Foreign Investment Promotion and Protection Agreement for which talks began in 1994.
Free trade has become an increasingly important issue for the Canadian government since the recession and Ottawa is keen to diversify the country's export markets away from almost complete dependence on the United States. This would provide Canada with a greater buffer against recession if the U.S. economy sinks again.
"Once this trade agreement is in place, Canada will be the only developed country with free trade deals with the EU and the United States, the two largest markets in the world," Peter Van Loan, Minister of International Trade, said in a press statement. "This will give Canadian businesses a key competitive advantage and help them to succeed in the global marketplace."
A Canada-European Union joint economic study, released in October 2008, concluded that a stronger economic partnership could boost Canada's economy by $12 billion annually and increase two-way trade with Europe by 20 per cent.
But while FTAs provide better opportunities for Canadian businesses in foreign markets, they also provide foreign markets better access to Canada, something which is good for Canadian consumers who get more choice and lower prices, but not good for Canadian businesses that have enjoyed a protected market, such as the dairy industry. An FTA with the EU could also impact certain regulations within Canada, such as product names or pharmaceutical patent protection, as this John Ivison comment in the National Post points out.
It is possible that Ottawa may come to some agreement with the EU that will allow for some protectionist measures to stay in place, after all, the EU also has industries that it would like to protect. It also has laws that conflict with Canadian industries, namely its ban on fur imports. These issues are yet to be resolved and could provide sticking points that hold up a final agreement.
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