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Canada free exchange EU: negotiations are progressing on the car

The negotiators of a free trade agreement between Canada and the European Union are beginning to lay the groundwork for a sectoral agreement in the automotive industry, one of the stumbling blocks between the two parties.

The Canadian Press obtained a copy of a European list of issues that remain in dispute on rules of origin, an issue that has long blocked an agreement in the automotive sector. The Canadian industry is bound at this point in U.S. market it is almost impossible to define what a "Canadian Car".

This list, dated February 5, evokes, among others, a short-term solution for the automotive industry, which provides for a quota of Canadian cars can be exported without penalties in European territory. Negotiators have frequently resorted to quotas to try to settle some outstanding issues.

Canada would have suggested a quota of 100,000 cars per year, but there is no evidence that Europeans accept this proposal.

Quotas could possibly be deleted and then make way for another scenario longer term, if Canada, the European Union and the United States were able to agree on the "Canadian content." Discussions are complex because it would then determine how we take into account the American content in the "Canadian" vehicles exported to Europe.

After settling this clause, quotas could be replaced by a provision providing for the cars built in Canada do not contain more than 40 percent of foreign material, excluding the American content.

Such an arrangement would mean that European negotiators recognize the great integration of the economies of both countries. The spokesman of the New Democratic Party in matters of trade, Don Davies, also finds that this recognition is crucial, as is the "Canadian reality" cars made in the country.

And documents obtained by The Canadian Press suggest that this is exactly the way that seem to adopt the negotiators of both sides, adds a trade consultant in Ottawa, Laura Dawson.

"This is a good thing for Canada because it will improve the access to the European market, and it reflects the integrated nature of the North American market," said she supported.

However, the documents also indicate that European negotiators carefully examine Canadian standards in the automotive sector. This European thoroughness could delay the negotiations, since standards in Canada and Europe are not exactly the same in this area.

Negotiations for a free trade agreement between Canada and the European Union are in their last stages, but the representatives of the two parties have yet to discuss, among other things, some very contentious issues: government procurement, pork and beef, financial services and pharmaceuticals.

Both parties are under increased pressure to the last strings are attached, because the European Union is preparing to begin over the coming months, further negotiations for a free trade agreement, this times with the United States.

By Heather Scoffield

Canada free exchange EU: negotiations are progressing on the car picture #1

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