Latin America Trade
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Cows block path toward Canada-EU free trade deal
Salvaging a free-trade deal between Canada and the European Union after four years of talks will require skillful pasture politicking to pacify beef and dairy cow farmers who see more risk than opportunity.
The difficulties underline how challenging bilateral and regional trade deals are to reach, and how groups like farmers can punch above their weight.
Canada’s Conservative government has made trade a priority, but has yet to deliver a major deal. For the EU, a deal with Canada would be a first with a country in the G7 group of industrialized nations and a possible template for a EU-U.S. agreement.
Privately, sources close to the talks say the two sides are not far apart. But after months of deadlock and with trade talks with other partners on the horizon for both sides, the potential $28-billion accord could just as easily fall apart in weeks.
A deal would offer new markets for Canadian grains, beef and pork and for European cheese, as well as give EU companies more freedom to bid on Canadian government contracts and extend patent protection on European-made pharmaceuticals.
Yet Irish farmers see threats from expanded beef imports from Canada, and Ottawa is trying to appease both dairy farmers - who currently thrive under supply management achieved by quotas and a tariff wall against foreign cheese and milk - and export-focused beef ranchers. (Graphic on global cheese trade: http://link.reuters.com/zev78t )
Watching from the sidelines, Canada’s largest meat plants, owned by U.S. based Cargill Inc, Brazil’s JBS SA , Maple Leaf Foods Inc and Olymel LP, stand as potential winners.
European dairy producers, such as the world number one and Parmalat SpA owner, Lactalis, Bongrain SA and cooperatives FrieslandCampina and Arla Foods Amba, also want access to high-income Canadian consumers.
Deal Stalled Over Quotas
Ottawa and Brussels started negotiations on a trade deal in 2009, targeting end-2011 as the likely completion date.
But talks have just dragged on even though the two sides have agreed not to liberalize sensitive areas of beef, pork, and sweet corn for the EU, and dairy, poultry and eggs for Canada, and instead boost market access with bigger quotas.
Establishing those quotas has proven “a major stumbling block,” according to the EU General Secretariat, which accuses Canada of wanting to ship large volumes of beef and pork to the EU while offering “very modest” access for European dairy products.
Canadian Prime Minister Stephen Harper said on Wednesday his government would not be rushed into signing a free trade agreement with the European Union this week just to coincide with meetings he is holding with European leaders.
Talks are complicated by the fact that both sides are looking beyond this deal, said James McIlroy, an advisor to the Canadian trade minister during the 1980s U.S. free trade talks.
If the EU boosts access for Canadian beef, it will face pressure to do the same for the United States in any future U.S.-Europe trade deal, while Canada knows new access for European dairy will come into play in talks on a Trans-Pacific trade partnership.
And even if the trade chiefs agree, the European Parliament and the EU’s 27 member states must all approve a deal. Irish or French opposition to a high beef import quota or a low dairy export allowance could sink an accord.
Agriculture represents less than 5 percent of the Canadian economy, and yet the lobbying muscle of supply management groups representing dairy, poultry and egg farmer
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