Canada PM heads to Brussels to try to seal delayed EU trade deal

By David Ljunggren

OTTAWA (Reuters) - Canadian Prime Minister Stephen Harper will fly to Brussels on Thursday in a bid to seal a free trade treaty with the European Union, his office said on Wednesday, signaling an end to negotiations that have dragged on much longer than planned.

Canada initially said a deal would be struck by December 2011. It then pushed that back to December 2012 as the two sides struggled to overcome disagreements over pharmaceuticals, financial services, patents as well as beef and dairy exports.

Earlier on Wednesday, both sides said they would soon complete the talks on the Comprehensive Economic and Trade Agreement(CETA), which officials say could generate around $28 billion in trade and new business each year.

"The Prime Minister will travel to Brussels to meet with the President of the European Commission, Jose Manuel Barroso, with the goal of concluding the CETA negotiations," said a statement from Harper's office.

Harper is due to fly out on Thursday and return on Friday.

"They wouldn't make a trip if there wasn't good news to come," a European official told Reuters.

Canadian negotiators had to balance the needs of a beef sector which wanted to boost exports to the EU with the concerns of the dairy sector, which said it feared that domestic cheese makers could be swamped if the EU quota were raised.

The Dairy Farmers of Canada group expressed anger and disappointment at an agreement it said would give the EU an additional 32 percent of the Canadian fine cheese market.

"This deal would displace our local products with subsidized cheeses from EU and risk our small businesses being shut down or put out of business. This is unacceptable," Wally Smith, the president of the Dairy Farmers of Canada, said in a statement.

Canada's Conservative government has over the years stressed its support for the dairy sector. Many farmers are based in rural areas that tend to vote Conservative.

The offices of Harper and International Trade Minister Ed Fast did not immediately respond to the dairy farmers' statement.

"I sincerely hope Stephen Harper is not selling out Canadian dairy farmers on this ... we're very concerned with what we're hearing," said Tom Mulcair, leader of the main opposition New Democrats.

The Canadian Cattlemen's Association said it had calculated the potential value of Canadian beef exports to the EU to exceed C$600 million ($582 million) annually.

The Conservatives, who have a majority in the House of Commons, do not need to face another election until October 2015. Recent polls show them trailing the opposition Liberals who are led by Justin Trudeau.

Two sources close to the free trade talks told Reuters they had been informed Canada and the EU could announce they had struck a deal in principle, allowing negotiators to tackle the last few remaining problems in private.

"This notion that there would be a tentative deal should be dispelled. There's no such thing in international trade - you either have a deal or you don't," Mulcair told reporters.

Canada's 10 provinces and the European Union's 28 members will also have to approve any agreement.

($1=$1.03 Canadian)

(With additional reporting by Randall Palmer in Ottawa and Phil Blenkinsop in Brussels; Editing by Eric Beech, Cynthia Osterman and Paul Simao)

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