Foreign Policy Blogs

EU & Canada negotiate trade deal, US risks isolation.

Next Wednesday negotiations will begin on a possible EU/Canada trade deal. A study has estimated that the deal  could bring real income gains of €20billion annually for both partners. Which only makes the absence of a similar EU/US deal more conspicious. In fact it is the increased protectionist feeling in the US that has blocked momentum toward such a deal. The EU already has a free-trade deal with Mexico, so if the Canadian deal suceeds the US will be at a distinct trade-disadvantage with the EU, in comparison to its nearest neighbours.  This matters for the US because the EU is its biggest export market. Traditionally in favour of such deals, Frank Vargo of the US National Association of Manufacturers has stated that it would be a mistake for the Obama administration to join negotiations between the EU and Canada because the groundwork has not been laid in Congress or among key stakeholders. This at a time when free trade deals with tiny Panama, Colombia & South Korea are currently stalled in the US Congress.

Indeed, the Financial Times has stated that stated that fears of such protectionist forces in its biggest export market have pushed Canada to negotiate this deal. The US, as teh traditional cheerleader for free trade, risks being left behind in a new global trend towards free trade to asuage the worst effects of the financial crisis.

eucanada The future for free trade?

(May 13th : Here, the Canadian Prime-Minister suggests that Canada could become the EU gateway to North American markets, offering a more stable partner than the US).



David Garrahy

David Garrahy works in Brussels monitoring European Union activites. He is originally from Ireland and studied a Degree in Law & European Studies at the University of Limerick before earning a Masters in Globalisation at Dublin City Universty. Previously he has worked in the Irish Department of Foreign Affairs, the European Commission and as a Legislative Aide for an Irish Senator. His involvement in the EU has included working for the Irish Forum on Europe and campaigning in Referenda in favour of the Nice & Lisbon Treaties.

Area of Focus
Europe; Globalisation; European Comission.


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