Updated at: 10/19/2013 10:35 AM
By ROB GILLIES
(AP) TORONTO - Canadian Prime Minister Stephen Harper arrived in Brussels on Thursday to conclude a free trade deal with the European Union.
Canadian Finance Minister Jim Flaherty called it the most important trade agreement for Canada since the U.S. and Canada reached a free trade deal in 1987.
"There are 35 million people in Canada and 500 million there. Not a bad trade," Flaherty said at a dinner in Toronto on Thursday night.
Flaherty has said that despite Europe’s struggles, Canada remains very interested because the EU is still the largest market in the world in terms of the size of its middle class. The Canada-EU deal would make it easier for Canadian companies to invest in, and sell to, the 17-member EU with its 500 million consumers.
One thorny issue surrounding the deal was overcome earlier when Canada announced it would lift visa requirements for Czech nationals.
The Czech Republic, which had threatened to block the free trade deal over the visa issue, welcomed the announcement. Canada reimposed visa requirements for Czech citizens in 2007 because of concerns over an excessive number of asylum seekers. Canada’s Ambassador to Prague, Otto, Jelinek, said his government wants to re-establish visa-free status "in the earliest possible term."
EU trade spokesman John Clancy said in an e-mail that the European Union and Canada hope to conclude the free trade deal in the "coming days."
Harper’s office said he was headed to Brussels with the hope of concluding a deal. He will meet with the president of the European Commission, Jose Manuel Barroso.
Yves Leduc, director of international trade for the Dairy Farmers of Canada, said he’s been told by a Canadian government official that an agreement in principle has been reached and that the European Union’s 28 members and Canada’s 10 provinces have to approve it.
Canada has agreed to permit a doubling of the EU quota on cheese exports to Canada in exchange for greater access for Canadian beef and pork producers. Leduc said Canada’s cheese industry is angry because it threatens the fine cheese market in Canada.
"For the dairy farmers of Canada this is a deal that is unacceptable. We’re more than disappointed," Leduc said. "It will allow significant access of high quality or fine cheeses into Canada, a segment that is supplied by the smaller or medium size cheese factories in Canada."
Harper has said that a free trade deal between his country and the European Union could help the EU establish a beachhead as the bloc embark on separate free trade talks with the U.S. If a U.S.-EU trade deal is reached, it could be the world’s largest free trade pact.
Canada hopes to become less reliant on the U.S., the country’s largest trading partner.
In 2012, Canada was the EU’s 12th most important trading partner, accounting for 1.8 percent of the EU’s external trade. The EU was Canada’s second biggest partner with about 9.5 percent of external trade.
The value of the bilateral trade in goods between the EU and Canada was $84 billion in 2012, according to the EU. The EU says machinery, transport equipment and chemicals dominate the bloc’s exports to Canada.
The trade agreement, on which talks were first launched in 2009, seeks to lower or erase tariffs and facilitate mutual market access for trade in goods, services and investment. It aims at making it easier for companies to bid for government contracts in the other economy.
EU trade negotiations with the U.S., in turn, are still in an early stage and suffered a minor setback last week when the U.S. side had to cancel a long-planned negotiation round in Brussels because of the government shutdown. About 100 officials were set to travel to Belgium for the talks. The next round is likely to take place next month.
Associated Press reporter Juergen Baetz in Brussels contributed to this report.
(Copyright 2013 by The Associated Press. All Rights Reserved.)