The European Union and Canada have reached a free trade treaty agreement in principle that brings them near the end of over four years of negotiating.
Stephen Harper the Prime Minister of Canada and Jose Barroso, the President of the European Commission announced on Friday the agreement following a meeting held in Brussels.
The new pact, which still would have to have the approval of the national governments of the members of the EU and the European Parliament, would eliminate nearly 98% of all tariff lines between the EU and Canada the day it was implemented.
Barroso said the agreement with Canada has set the standard in negotiations for future partners, such as the United States.
He called it a landmark achievement in transatlantic economy along with a stepping stone for an integrated transatlantic marketplace.
Harper’s signature initiative has been this free-trade pact as he has sought to diversify his country’s trade away from the United States. Canada has more to gain out of this deal according to a study completed in 2008 that was done jointly by the European Commission and Canada.
A pact would raise the annual gross domestic product of Canada by $11.1 billion, which at the time was nearly 0.77% of the output of the country, the 2008 study showed. The economy in the EU would increase annual output by approximately 0.08%, said the joint study.
In 2012, the EU purchased more than 8.9% of all exports from Canada, while Canada only represented about 1.9% of all exports from the EU. In August of this year, 75% of the exports by Canada were received in the U.S.
