In the face of popular suspicion about secretive trade deals benefiting big companies, Commission President Jean-Claude Juncker retreated from his position that the multi-billion-euro pact would only need support from European Union governments and the European Parliament to go ahead.

“I have looked at the legal arguments and I have listened to heads of state or government and to national parliaments,” Juncker said in a statement on Tuesday. “The credibility of Europe’s trade policy is at stake.”

The 1,600-page text, which goes beyond tariffs to reduce transatlantic barriers to business, will now be sent to each of the EU’s 28 national parliaments, and in some cases, such as Belgium, to regional parliaments as well.

Requiring national parliamentary approval for the agreement, first envisaged in 2009, raises the risk it will never be implemented.

Proponents say it could increase bilateral trade by a fifth to 26 billion euros (C$37.3 billion). But many EU voters have turned against free trade since the global financial crisis, fearing that giving multinationals unfettered access to European markets will destroy jobs.

Italy’s industry minister, Carlo Calenda, warned the agreement was in danger and predicted a far bigger trade deal with the U.S. would collapse, too.

“I think (the U.S. deal) will fall through, and the agreement with Canada is at risk of doing the same. We have been negotiating it for too long,” Calenda said in Rome.

The Commission, the EU’s executive, said it still hoped the deal with Canada could be signed at an EU-Canada leaders’ summit in October, allowing it to come into effect.

As the most ambitious trade agreement the EU has negotiated so far, the accord encompasses financial services, shipping, sustainable development and access to government tenders, as well as food and industrial goods.

But EU Trade Commissioner Cecilia Malmstrom conceded the deal had fallen victim to wider concerns about the impact of globalization and whether foreign companies were too powerful. She blamed EU governments for failing to stand up for the trade deals they had agreed the European Commission should negotiate.

“The risk to EU trade policy is that member states infect this debate by confusing the content of the agreement with the general malaise and anti-globalization feelings,” Malmstrom told a news conference. “Instead of addressing this, the questions and concerns of the citizens are used to boost these feelings.”

— Robin Emmott is a Reuters diplomatic correspondent in Brussels, covering EU foreign affairs. Additional reporting for Reuters by Isla Binnie in Rome.

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After five years of difficult negotiations, Canada and the EU agreed a free-trade accord last year, but unexpected wrangling over aspects of the final text have intensified in recent months and could delay its ratification.

Greece will tell EU trade ministers in Brussels on Thursday that the agreed text does not protect Greek feta in Canada because, under the terms of the pact, Canadian companies using the ‘feta’ name before October 2013 can continue to do so.

“We have informed the European Commission about the numerous usurpers of our famous feta cheese in the Canadian market,” Greek diplomats wrote in a note prepared for Thursday’s meeting. They added that “it would be extremely difficult, if not impossible for us, to endorse” a EU-Canada trade accord.

Greece’s radical leftists, who won power in January, are struggling to renegotiate the country’s bailout with Europe and their last-minute objections to the Canada deal are unlikely to go down well with the most EU governments who are eager to see the economic benefits of the accord kick in as soon as possible.

It is not yet clear if a Greek veto could sink the treaty.

Greece, which says feta is its cultural heritage because it has made the sheep and goat milk cheese for 6,000 years, wants Canadian producers to label their cheese “feta-style.”

Geographical protection of European food names is also causing tension with the U.S., where the EU is seeking an even bigger deal than that of Canada.

Canada and the U.S. say the EU system is unfair because European immigrants have long produced such products as Greek feta and should be allowed to export it as such.

They also argue that there is no place called feta and so it should not receive geographic protection.

But the issue of food is emotive in Europe and the European Commission is struggling to maintain support for its ambitious trade strategy that includes free-trade deals with the world’s biggest economies.

Talks with Canada were launched in May 2009 but stalled several times over issues such as the size of quotas for Canadian beef and the issue of geographical protections.

Some German politicians also want the Canada-EU deal reopened to change highly contested investor arbitration rules, worried that North American companies will use international dispute settlement panels instead of national courts to challenge EU laws they view as harmful to profitability.

— Robin Emmott is a Reuters correspondent covering EU affairs from Brussels.

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In a letter to the EU trade commissioner, seen by Reuters on Thursday, Economy Minister Alexei Ulyukayev said Moscow wanted three-way negotiations to amend the EU’s treaty with Kiev, which Russia says will hurt its own economy.

Ulyukayev renewed threats to curb Ukraine’s access to vital Russian markets, showing that a concession Brussels made to Russia on Friday — to delay the pact’s implementation for 15 months — had failed to ease Moscow’s concerns.

Moscow is worried primarily that Ukraine will bar imports from Russia that fail to meet EU quality standards.

Trade is at the heart of a dispute that has morphed in a year from a tussle between Brussels and the Kremlin over relations with Kiev to tit-for-tat economic sanctions, conflicts in Crimea and eastern Ukraine and fears of a new Cold War threatening global security.

Ulyukayev, in the Sept. 15 letter to EU trade chief Karel De Gucht, said Russian, Ukrainian and EU negotiators should have a mandate to prepare “proposals for amendments in the Association Agreement of Ukraine with the EU allowing for legally binding formulas to remove the concerns of the Russian side”.

However, De Gucht, who met Ulyukayev and a Ukrainian minister last Friday to agree a deal to delay implementation of the pact until Dec. 31 2015, has ruled out amending the treaty ratified by the EU and Kiev parliaments on Tuesday.

Reopening the legal texts would pose problems for the EU’s multinational procedures and pose serious diplomatic obstacles.

Retaliation threat

With a copy to Ukrainian Foreign Minister Pavlo Klimkin, Ulyukayev said Russia could treat even a partial implementation of the treaty as a trigger to react.

“We reiterate our intention to adjust, if necessary, the preferential regime between Russia and Ukraine in order to minimise negative problems related to the change in the trading regime between Ukraine and the EU, not excluding other ways to protect the Russian economy.”

The postponement was principally intended to avoid undermining a tentative ceasefire with pro-Russian rebels.

But a senior Russian official told EU counterparts that delaying the accord did not alleviate Russian concerns and that Moscow viewed the 15-month delay as time to be used to negotiate the changes it wants to see, Brussels diplomats said.

Among other things, Russia wants to remove from the EU-Ukraine deal about a quarter of the specific breaks on trade tariffs, EU officials said.

Brussels believes it can use the delay to win Moscow round, insisting that the treaty can work without harming Russia. The EU is willing to negotiate a separate trade deal with Moscow.

EU officials say that there is room for compromise with Moscow on Ukrainian trade; Russian exporters could have a soft route to compliance with EU quality and other standards in Ukraine so that they only need meet the requirements for selling goods into the EU-Ukraine free-trade area over a very long time.

Following the overthrow in February of a pro-Moscow leader who balked at signing the EU deal, Ukraine’s parliament this week sealed a historic shift by ratifying the political and trade agreement, going down a path Kiev hopes will bring the prosperity seen in fellow ex-communist states like Poland.

Diplomats from one east European EU member said they were angry that De Gucht had agreed to the delay without consulting them and felt that Germany and other major powers had given in to pressure from Russia.

Jacek Saryusz-Wolski, a Polish member of the European Parliament which ratified the accord simultaneously with Kiev, voiced a similar view.

“Putting the EU-Ukraine trade deal on ice is the wrong decision,” he said. “It would delay the necessary reforms and set a bad precedent.”

On Thursday, an EU spokeswoman declined comment on “confidential conversations taken out of context” when asked about a report in a German newspaper that Poroshenko had told EU officials that Russian President Vladimir Putin had made veiled threats to him about the security of EU members.

“If I wanted to, in two days Russian troops could be not only in Kiev, but in Riga, Vilnius, Tallinn, Warsaw or Bucharest,” the Sueddeutsche Zeitung quoted Putin as saying, according to a comment relayed by Poroshenko last Friday to European Commission President Jose Manuel Barroso.

— Robin Emmott and Jan Strupczewski are Reuters correspondents covering EU affairs from Brussels.

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Over a celebratory lunch last October, Canadian Prime Minister Stephen Harper and European Commission President Jose Manuel Barroso termed the accord “a landmark achievement for the transatlantic market” that could come into force next year. [Related story]

But the free trade deal, which could increase bilateral trade by a fifth to 26 billion euros (US$35 billion) a year, has run into trouble over issues ranging from financial services to how beef and cheese quotas are shared out.

The drawn-out final stage of talks, with each side accusing the other of going back on promises, illustrates the complexity of sealing sophisticated trade deals and bodes ill for the EU’s more ambitious talks with the U.S.

“Negotiations cannot drag on forever,” said Marie-Anne Coninsx, the EU’s ambassador to Ottawa. “It is in the interests of both parties that we get things done.”

The deal would make Canada the world’s only major economy with preferential access to the world’s two largest markets, the EU and the U.S., home to a total of 800 million people.

For Europe, the accord is meant to be a template for its trade negotiations with the U.S., which would encompass a third of world trade and almost half the global economy.

Both the EU-Canada deal and the accord with the U.S. seek to go far beyond tariff cuts and to reduce transatlantic barriers to business. Such trade deals are seen as a way for developed countries to generate economic growth and overcome the worst financial crisis in a generation.

Publicly, EU officials say it is a question of days for the final wording of the Canada trade deal to be agreed. Canadian Trade Minister Ed Fast told lawmakers last week that “all of the substantive issues have been resolved.”

Canadian opposition leader Thomas Mulcair, citing a previous release of this Reuters report, asked Harper on Monday in the House of Commons why he announced the trade deal before it was ready. Mulcair accused the prime minister of trying to distract the public from a Senate spending scandal with the announcement.

Harper brushed off the criticism, saying “technical negotiations will be completed very soon.”

Harper and Barroso will hold a bilateral meeting on the margins of the Group of Seven summit in Brussels this Wednesday and Thursday, confirming their intention to seal the pact.

Celebrations “premature”

Behind closed doors in Brussels and Ottawa, trade delegations, diplomats and business groups complain of long delays and difficult issues that have yet to be resolved.

“With hindsight, it was premature for Harper and Barroso to announce a deal,” said one person close to the talks. “There is a sense of embarrassment in many quarters.”

Talks were launched in May 2009 but stalled last year over issues such as the size of quotas for Canadian beef and EU cheese. At their lunch in October, where chefs cheekily served Italian gorgonzola and Greek feta, Harper and Barroso said the big issues were resolved.

But both sides are still negotiating the divisive issue of how foreign companies bring claims against either Canada or an EU country if a government breaches a trade treaty.

The Europeans want more protection for their pharmaceutical patents in Canada, a market known for generic medicines. Ottawa does not want to allow European pharmaceutical companies to easily challenge Canadian rules once a trade deal is in place.

“The EU will never accept this,” said one diplomat.

Canada’s position is a response to Eli Lilly’s US$500 million lawsuit against the Canadian government last year on the grounds it unfairly ended patents on two best-selling drugs. Eli Lilly brought its lawsuit under the terms of another trade deal, the North American Free Trade Agreement (NAFTA).

Other difficult areas include how to regulate financial instruments and how beef and cheese quotas are managed, showing the sheer scope of this new type of free-trade agreement.

“The deals with Canada and the U.S. go well beyond what trade negotiators alone can deliver. There are so many government agencies and sectors at the table,” said Andre Sapir, a trade specialist at the Brussels-based think tank Bruegel.

— Robin Emmott and David Ljunggren are Reuters correspondents based in Brussels and Ottawa respectively. Additional reporting for Reuters by Louise Egan in Ottawa.

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Eight months into talks to create a transatlantic pact encompassing almost half the world’s economy, divisions remain over opening up to each others goods, rules governing the names of foods and genetically modified food.

“There is an enormous gulf between the EU and U.S. positions,” said Michael Dolan, a lobbyist for the U.S. Teamsters union, who rejected the idea that the European Union should be the only market to call Greek-style cheese ‘feta.’

He warned a trade deal “is likely to be smaller, more modest than its ambitions, because of so many intractable issues,” telling negotiators in a forum also open to reporters.

Tensions over food, which have bedevilled many trade talks around the world, risk eroding already fragile public support for a deal that proponents say would increase economic growth by around $100 billion a year on both sides of the Atlantic (all figures US$).

Negotiators aim to finalize a deal by the end of this year.

Mindful of the huge protests surrounding global trade talks in the 1990s, EU and U.S. negotiators holding a fourth round of talks this week in Brussels took the unusual step of not only receiving lobbyists but also letting in the media.

What little awareness there is about the “Transatlantic Trade and Investment Partnership” (TTIP) could be distorted by anti-globalization protesters, EU ministers have warned.

At risk is a pact creating a market of 800 million people where business could be done freely, building on the almost $3 billion of transatlantic trade in goods and services each day.

Difficulties over agriculture bode poorly for the talks because EU-U.S. negotiators are seeking a far more a sophisticated agreement, going beyond farm goods to bring down barriers across all industries and businesses.

Even animal welfare is sensitive in a proposed accord where both sides would recognize each others standards to oil the wheels of commerce. Europeans said they consider U.S. standards concerning the slaughter of animals as being far lower than in the EU.

Steakhouse pleasures

Even without such issues, U.S. farmers complain that the farm trading relationship is unfairly skewed in Europe’s favour and want it addressed in the trade talks.

The European Union exported $16.6 billion of farm goods to the U.S. in 2012, much more than the $9.9 billion that U.S. farmers sent to Europe, partly because of EU rules banning imports of genetically modified food for human consumption.

“Our trade could be way bigger,” said Douglas Nelson, an adviser for farm group CropLife America. Floyd Gaibler of the U.S. Grains Council said: “The TTIP is a way to normalize trade with the European Union.”

But barely a week goes by that EU trade commissioner Karel De Gucht, who handles commerce issues for the EU’s 28 member states, states that European regulation of genetically modified food will not change even if a deal is done with Washington.

The European Union is also closed to U.S. beef from cattle raised with growth hormones. Some Europeans are worried about what impact GM crops and hormone beef — often dubbed “Frankenfood” — might have on health and the environment.

“The United States and the European Union have the highest standards of food safety. How is it that we have such different ideas about how to achieve those standards?” said John Brook, regional director of the U.S. Meat Exports Federation.

“Have you ever heard about a European on holiday in the U.S. not eating meat? Everyone raves about the experience of eating in a U.S. steak house,” he said.

— Robin Emmott is a senior Reuters correspondent based in Brussels, Belgium.

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Canadian Prime Minister Stephen Harper and European Commission President Jose Manuel Barroso sealed the pact — the EU’s first with a member of the Group of Eight biggest world economies — by resolving outstanding issues in Brussels.

Launched in May 2009, the talks had been stalled for months over quotas for Canadian beef and EU cheese. In a cheeky touch, chefs served gorgonzola and feta at the four-course lunch laid on for the two leaders.

“This agreement is a landmark achievement for the transatlantic market,” Barroso told a news conference, flanked by Harper. “With political will and a good dose of hard work, there is a way to reach a result that benefits people on both sides of the Atlantic,” he said.

The deal marks a breakthrough for Brussels’ free-trade agenda, which had previously achieved smaller agreements with South Korea and Singapore. It is expected to increase bilateral trade in goods and services by a fifth to 25.7 billion euros (US$35 billion) a year, according to the latest EU estimates.

Barroso said he hoped the agreement could come into effect from 2015, after EU governments, the European Parliament and the Canadian provinces give their blessing.

The deal will also make Canada the only G8 country — and one of the only developed nations anywhere — to have preferential access to the world’s two largest markets, the EU and the United States, home to a total of around 800 million people.

“This is the biggest deal our country has ever made,” Harper said, adding that it outstripped the North American Free Trade Agreement between Canada, the United States and Mexico.

Tough hurdles

The Commission is negotiating trade pacts with more than 80 countries on behalf of the bloc’s 28 members, following the collapse of the marathon Doha round of global trade talks. The delays that dogged the Canada agreement showed how difficult such deals can be.

European efforts to sign a free-trade accord with the United States faced a setback this month when a second round of negotiations was cancelled because of the U.S. government shutdown.

Despite plans to do a deal by the end of next year, the talks have also been overshadowed by reports the U.S. bugged EU offices under surveillance programmes made public by fugitive former intelligence contractor Edward Snowden.

Still, the Canada agreement should provide a boost for EU trade chief Karel De Gucht and could serve as a template for U.S. talks. Both deals seek to go far beyond tariff cuts and to reduce transatlantic barriers to business. There are also similar sticking points, such as agriculture.

“It’s a good signal. I’m a transatlanticist,” German Economy Minister Philipp Roessler told Reuters at a trade ministers’ meeting in Luxembourg. “It’s a great basis for all other negotiations, such as the TTIP talks with the United States,” he said, referring to the proposed deal by its formal name, the Transatlantic Trade and Investment Partnership.

The EU-Canada pact would eliminate tariffs on almost all goods and services, set larger quotas for EU dairy exports and make it easier for EU carmakers to export vehicles to Canada.

“Sold out”

The EU will eliminate duties on a range of Canadian agricultural products, from wheat to maple syrup. Canada will be able to export 80,000 tonnes of pork and 50,000 tonnes of beef free of duties to the European Union.

“The elimination of EU tariffs in the agricultural sector and the fish and seafood sector will mean that lobster fishermen in the Maritimes, maple syrup producers in Quebec, apple growers in Ontario, grain producers in the Prairies, cherry growers in British Columbia and arctic char farmers in the Yukon who export to the EU will see their bottom lines improve,” Harper’s office said in a release Friday morning.

For the pork sector, an EU pact is expected to provide returns “far greater than the projected export value when factoring in the additional economic development stimulated by the increased feed grain production, meat processing and distribution activities generated by these new sales of Canadian pork,” Canadian Pork Council chairman Jean-Guy Vincent said in a separate release.

“Based on existing market intelligence and the anticipated market opportunities for specific cuts of pork, this deal could, in a few short years, lead to annual sales of C$400 million,” he said.

Trevor Atchison, president of Manitoba Beef Producers, said Friday the EU deal is estimated to offer over $600 million in potential benefit to Canada’s beef sector, including tariff-free access for 64,950 tonnes of fresh and frozen beef across three new categories, as well as tariff-free entry for live cattle, genetics and byproducts such as offal, tallow and hides.

Canada’s canola industry, meanwhile, estimates ending tariffs through the EU pact could allow exports of canola oil to Europe to run up to $180 million a year. The EU “has an ambitious biofuels agenda and canola oil is the preferred feedstock for biodiesel production,” the Canola Council of Canada said Thursday.

Under the EU/Canada agreement, for the first time, provincial governments in Canada are to commit to opening their lucrative procurement markets to allow European companies to compete for contracts alongside locals.

Canada’s National Farmers Union said Thursday that Harper has “sold Canadians out to be governed by foreign corporations” and urged the government to open the deal’s final text to the public before votes are held to ratify the deal.

“The devil is always in the detail, which this government has never disclosed,” NFU president Terry Boehm said, adding local food systems “will be severely restricted. Harper’s negotiating tactic allowing increased importation of European cheeses will have negative effects on dairy farmers.

“As well, the increase in beef exports to the EU is a red herring — we have not filled existing export quotas for hormone-free beef to this point.”

“If this deal proceeds, the Canadian government will have given the EU an additional exclusive access of 32 per cent of the current fine cheese market in Canada, over and above the existing generous access,” Dairy Farmers of Canada said Wednesday.

The trade deal, DFC said, will “displace our local products with subsidized cheeses” from the EU, which already uses two-thirds of Canada’s tariff rate quota (TRQ) for tariff-free imports of 20,412 tonnes of cheese.

Quebec’s Union des producteurs agricoles on Thursday described the decision to expand market access for “dumping” of EU cheeses as “regrettable,” and argued Canada had made sufficient concessions in other economic sectors in this deal to justify the level of access granted to Canadian beef and pork.

— Robin Emmott and Philip Blenkinsop are senior correspondents for Reuters, based in Brussels. Includes files from AGCanada.com Network staff.

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Canada’s Prime Minister Stephen Harper and European Commission President Jose Manuel Barroso will meet at around midday in Brussels to wrap up talks that were launched in 2009 but which stalled early this year over demands for greater access to each other’s markets.

“The negotiations have really moved forward, which means that the two leaders will meet tomorrow with the aim of concluding,” Commission spokesman Olivier Bailly said. Harper was due to fly out to Brussels from Ottawa at noon ET.

Harper and Barroso are set to announce the deal — the EU’s first with a member of the G7 club of major economies — at a news conference at 12:30 GMT on Friday, if they can agree final issues including protecting Europe’s distinctive geographically defined products such as feta and Gorgonzola cheeses.

Backed strongly by Canadian and European industry, the accord is expected to increase bilateral trade in goods and services by a fifth to 25.7 billion euros (US$35 billion) a year, according to latest EU estimates.

A deal would be a political achievement for Harper’s free-trade agenda and a step forward for the European Union as the 28-nation bloc seeks to agree a trade deal with the U.S. That pact would be the world’s largest, encompassing half the world economy and a third of world commerce.

For Europe and Canada, the accord would also be one of a new generation of trade pacts that not only remove import tariffs but also harmonize rules on how companies do business across borders. An EU-U.S. deal would likely build on some of the agreements made with Canada to boost transatlantic business.

The EU-Canada pact would eliminate tariffs on almost all goods and services, set larger quotas for EU dairy exports and Canadian beef and pork exports and make it easier for EU carmakers to export vehicles to Canada.

For the first time, provincial governments in Canada would commit to opening their lucrative procurement markets to allow European companies to compete for contracts alongside locals.

EU governments, the European Parliament and the Canadian provinces will still need to approve any EU-Canada deal.

Beef for dairy?

With 95 per cent of the deal done late last year, negotiations ran into trouble in February when EU trade commissioner Karel De Gucht was unable to clinch an agreement after flying to Canada.

Since then, EU and Canadian officials have worked behind the scenes to break the impasse. Harper and Barroso have met three times, most recently at the G20 summit in St. Petersburg, to settle the most difficult issues including patents for pharmaceuticals, dairy products, beef and access to public procurement tenders.

At the heart of the dispute is a Canadian demand to be able to export up to 100,000 tonnes of beef to the EU every year, while the EU wanted to double its exports of dairy products without high tariffs, as well as protecting Europe’s geographically defined products like Greek feta.

People familiar with the talks said such issues had now been resolved, but exact details will still need to be finalised after a political deal between Harper and Barroso.

“There is still lots to be ironed out from a technical point of view, but the political differences look to be bridged to allow the deal to go ahead,” said a person close to the discussions who did not want to be identified.

Canadian beef exports are effectively blocked by the EU at present because they contain hormones. Ottawa has argued it needs a larger quota of hormone-free beef for Europe to make production economically viable.

Beef-producing Irish and French farmers are unhappy with that, while Brussels also needs to leave quota space which the U.S. will seek under a future free-trade deal.

— Robin Emmott and Philip Blenkinsop are senior correspondents for Reuters, based in Brussels.

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