June 5 (Bloomberg) -- Talks to complete a free-trade deal between Canada and the European Union are being handcuffed by a dispute over beef and pork imports to Europe, a person with knowledge of negotiations said.
The impasse means an agreement probably won’t be reached during Prime Minister Stephen Harper’s trip to Europe next week, said the person, who spoke on condition of anonymity because the talks aren’t public. While negotiations are still going on, Canadian officials are concerned Europeans are trying to use Harper’s trip to force them into a deal that isn’t favorable to the country, the person said, citing Europe’s offer on beef and pork access as the main stumbling block.
The proposed agreement is a test of Harper’s efforts to diversify Canada’s trade away from the U.S., its largest trading partner. Still, the two sides have struggled to close a deal and narrow differences over agricultural goods, procurement and financial services. When talks began in 2009, Canada had been hoping for a pact by as early as 2011.
“What we pick up is that it’s back and forth,” said Peter Clark, an international trade strategist at Grey Clark Shih & Associates in Ottawa. “It’s not easy to look after 27 member states, it’s like herding cats.”
Sticking points have included Canadian access to the EU’s beef and pork markets and European access to Canada’s dairy market as well as to Canadian public procurement contracts at the provincial and municipal levels.
European Union Trade Commissioner Karel De Gucht complained earlier this year that Canada was responsible for the lengthy negotiations.
“What was on the table simply didn’t please me, so I didn’t make an agreement,” De Gucht told the European Parliament’s international trade committee Feb. 21 in Brussels. “They need to make additional steps and, if not, there will not be an agreement.”
An agreement is expected to increase bilateral trade by 20 percent and add C$12 billion ($11.6 billion) annually to Canada’s economy, Trade Minister Ed Fast said in an interview with Bloomberg March 13.
The EU delegation office in Ottawa declined immediate comment on the story. Andrew MacDougall, a spokesman for Harper, said the negotiations are continuing and declined to comment further.
Harper is traveling to Europe on an eight-day trip that will take him to London, Paris and Dublin before stopping in Northern Ireland for a summit of Group of Eight leaders. Ireland holds the EU’s rotating presidency.
Canada wants its beef producers to be allowed to export more than 40,000 metric tons to Europe, Matthias Brinkmann, the European Union’s Ambassador to Canada, told reporters May 9.
“We are ready to deliver that, even go beyond that,” he said. “But there’s a certain limit that we cannot go above, because then our own producers in some countries depend very much on that, like Ireland and France.”
There needs to be a “give and take” between Canadian demands for more beef access and European demands for more access for its cheese makers, Brinkmann said.
Wholesale-beef prices in the U.S. rose as much as 8.9 percent this year to a high of $2.1137 a pound on May 23, according to U.S. Department of Agriculture data. Pork prices were up 25 percent this year to 95.76 cents a pound yesterday.
On May 29, China pork producer Shuanghui International Holdings Ltd., the country’s biggest pork producer, agreed to acquire Smithfield Foods Inc. of Virginia for about $4.72 billion.
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