Canada PM Says Close to Reaching Free Trade Deal with EU

Canada is close to reaching a free trade deal with the European Union, Canadian Prime Minister Stephen Harper said Wednesday.

"We will soon complete negotiations on a Comprehensive Economic and Trade Agreement with the European Union," Harper said in a Twitter message.

He was echoed by EU Trade spokesman John Clancy, who said: "Discussions are indeed continuing at the highest level between the EU and Canada towards a comprehensive free trade deal (CETA) -- with the hope to conclude the negotiations in the coming days."

Official sources told Agence France Presse the deal would give the European Union increased access for cheese sales, clearing one of the last hurdles to a free trade pact.

The agreement-in-principle must now be sent back to Canada's provinces for final approval, they said.

On several previous occasions officials on both sides of the Atlantic have touted a deal was imminent but deadlines passed and no announcement was forthcoming.

Negotiations started in 2009 with the expectation they would be concluded by late 2012, but they became deadlocked over a few holdout issues, mainly in agriculture.

Canada asked for increased European access for its beef while the EU sought to lower tariffs of up to 300 percent shielding Canada's supply-managed dairy industry from imports of European cheeses.

On Wednesday, the Canadian dairy farmers' association said it would not support a deal that would allow the EU to sell more cheese in this country, arguing that its current quota was already generous.

"This (potential) deal would displace our local products with subsidized cheeses from EU and risk our small businesses being shut down or put out of business. This is unacceptable," the Dairy Farmers of Canada said in a statement.

Rudy Husny, spokesman for Canadian Trade Minister Ed Fast, however, reminded that Harper committed to protecting Canada's supply-managed agricultural sectors.

"Our government has been clear. All of the three key pillars of our domestic system of supply management must remain intact: production controls, import controls, and price controls," he said.

The actual amount of the proposed EU cheese quota increase is small, he said.

Canadian business leaders meanwhile applauded Harper's commitment to seal the Canada-EU trade deal soon.

"After four years of negotiations, we are heartened by the prime minister's assurance that negotiations are close to complete on the Canada-EU Comprehensive and Economic Trade Agreement (CETA)," John Manley, president of the Canadian Council of Chief Executives, said.

"On both sides of the Atlantic, the CETA will create jobs, spur investment and promote economic growth."

Manley, a former top minister in previous Canadian governments, noted that in most trade agreements, "neither side will get everything it wants."

But he said: "Narrow issues - whose economic value is arguably marginal in the context of this trade agreement - should not distract us from the huge gains for both sides."

A transatlantic deal would give Canadian companies access to 500 million European consumers and eliminate 98 percent of Canadian tariffs on EU goods.

If Europe can secure a free trade deal with Canada, it would lay the groundwork for a planned, much larger accord with the United States, both French and Canadian leaders said in March.