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Canada "back in the game" with EFTA trade deal

Reuters Canada

Canada "back in the game" with EFTA trade deal

7 June 2007

OTTAWA (Reuters) - Canada and four European nations have completed negotiations for a free trade agreement, the country’s trade minister said on Thursday, saying Ottawa needs to seal more such deals to compete globally.

Trade Minister David Emerson also announced the start of free trade talks with Colombia, Peru and the Dominican Republic and said he hoped to conclude negotiations with South Korea and Singapore in the near future, according to the prepared text of a speech.

Worried about lagging behind other countries in securing bilateral trade deals, Canada is set to sign its first such accord in six years with the European Free Trade Association, comprised of Switzerland, Norway, Iceland and Liechtenstein.

Two-way trade between Canada and EFTA is small at C$11 billion ($10.38 billion) annually, but Emerson argued the agreement was "a major directional statement" for Ottawa.

"It’s a statement that Canada is back in the game," he said in the prepared text of a speech to businessmen in Gatineau, Quebec, near Ottawa.

While continuing to actively support ailing World Trade Organization talks, Ottawa needs to push ahead with bilateral and regional deals of its own, he said.

"We’ve been a spectator for too long as market share is taken by competitors with more aggressive trade strategies."

Canada relies heavily on the United States for trade, which in 2006 bought 82 percent of its exports.

But its longstanding goal of diversifying markets has not advanced much since 2001, a period in which the United States has negotiated free trade deals with 16 countries and Mexico has linked with five.

"It’s not just the fast-growing emerging economies like China, India and Brazil, but it’s also our more traditional competitors such as the U.S. and Europe," Emerson said.

One of the most sensitive sectors for Canada in its nine-year negotiations with EFTA was its domestic shipbuilding industry. Two of the EFTA members — Norway and Iceland — are world leaders in maritime transport, raising fears the Canadian industry could be wiped out.

The final agreement allows for a 15-year phasing out of tariffs on ships with a three-year grace period before any cuts are made, Emerson said.