E.U. Takes Step toward Trade Pact with Canada ; Details Remain Sketchy, but Deal Could Lift Quotas and Fine-Tune Regulations

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The pact, which still needs ratification by both sides, could increase bilateral trade by about 23 percent, or EUR 25.7 billion, by lifting quotas and fine-tuning regulations.

Canada and the European Union tentatively agreed to a sweeping trade agreement on Friday. But while billed as a "free trade" pact, the limited information released about its terms suggest that the terms of any final deal may involve adjusting import-export quotas and fine-tuning regulations as much as the easing of tariffs.

Stephen Harper, the prime minister of Canada, has repeatedly emphasized the importance of a trade pact with Europe. Despite that, the negotiations, which began in 2009 and largely took place out of public view, provoked relatively little notice in Canada. Dairy farmers, who enjoy tight controls on imports, have been critical, as have some groups who fear it may increase the cost of drugs.

Most of the political controversy in Canada focused on Mr. Harper's presenting a legislative agenda for a new session of Parliament on Wednesday and then leaving for Brussels the next day before he could be questioned. An agreement on the trade deal had not been expected this week and opposition politicians charged that Mr. Harper had announced the pact on Friday to deflect attention from an expenses scandal in the Canadian Senate involving some of his Conservative appointees.

"This is the biggest deal our country has ever made," Mr. Harper said in Brussels on Friday, adding that it is "an historic win for Canada."

Once a final text of the agreement is completed and signed, it would require ratification by the European Parliament, all of the European Union's 28 member states and every Canadian province and territory.

Mr. Harper's "biggest deal" assertion aside, any pact with Europe will pale in economic terms with the 1988 trade deal between Canada and the United States, which was subsequently folded into the North American Free Trade Agreement. According to the Canadian government, the United States accounted for 69.5 percent of its international trade in 2011, when Canada had exports of $532.4 billion, while Europe accounted for only 10.4 percent. The European Commission estimates that Canada accounts for about 1.8 percent of its external trade.

Once implemented, the agreement is expected to increase trade between Canada and the European Union by nearly 23 percent, or EUR 25.7 billion.

"Businesses in both Europe and Canada will be delighted to see new market opportunities open up at a time when global economic performance remains sluggish," said Markus J. …


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