Pressure is mounting on Canada to finish up a long-delayed trade deal with the EU. Despite outstanding issues that still must be settled, there is a final push to try and complete an agreement this summer. If both sides are able to secure a deal, it would lay the groundwork for the proposed U.S.-EU trade pact. There is the possibility that the U.S.-EU transatlantic trade talks could also include the other NAFTA partners and maybe even other countries. Mexico has already shown interest in joining and if Canada can’t put the final touches on their own agreement with the EU, they might also be part of the negotiations. This would facilitate plans for a coming NAFTA-EU free trade zone and the formation of a transatlantic economic union.

There are key issues which remain stumbling blocks and are preventing Canada and the EU from reaching an agreement. Academic researcher and law professor Michael Geist argued that, “with the EU the stronger of the two parties, it doesn't see any urgency to compromise. In fact, with a growing number of EU negotiations (including talks with the U.S.), compromise with Canada may undermine its position in more economically important deals.” He also laid out different possibilities for the future of CETA. This includes Canada continuing to hold out hope for a compromise which thus far has failed. They could cave to the EU demands, but this might hurt the Conservatives chances in the 2015 election. Geist pointed out another scenario which would involve Canada joining the U.S.-EU talks and CETA being replaced by the Transatlantic Free Trade Area (TAFTA). He noted, “The argument for TAFTA would be that Canada is consolidating its negotiations into major agreements covering the Pacific (TPP) and Atlantic (TAFTA) to ensure that it is part of two potential large trading blocks. The danger with this approach is that Canada becomes a bit player in both negotiations with even less leverage to promote Canadian interests.”

During a speech given in November of last year, EU Trade Commissioner Karel De Gucht called on Mexico and the EU to modernize their existing trade agreement. Glyn Moody of techdirt recently reported that Mexico is now looking to join the U.S.-EU transatlantic deal. This would be one way for the EU and Mexico to upgrade trade relations. Moody emphasized that the U.S. strategy is to, “make TPP the defining international agreement for the entire Pacific region. TAFTA obviously aims to do the same for the Atlantic. As well as establishing the U.S. as the key link between the giant TPP and TAFTA blocs, this double-headed approach would also isolate the main emerging economies -- Brazil, Russia, India and above all China.” Just like the U.S. dominated Trans-Pacific Partnership (TPP), Mexico and Canada could also be a part of the Transatlantic Trade and Investment Partnership talks. This would make it a true NAFTA-EU trade bloc-level negotiations. There might be an opportunity for other countries to join as Turkey is also pushing to be included in the trade deal.

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