Canada, EU have no trouble seeing benefits of free trade in wine and spirits

OTTAWA – Canadian and European Union negotiators appear to be having no difficulty seeing the benefits of free trade in wine and spirits.

Sources close to the talks say issues on wine and spirits have been settled, with Canada agreeing to make a technical change on how duties are applied on imports.

The change is designed to be revenue neutral, but it may have the effect of lowering prices on premium wines and spirits.

As well, Ontario and British Columbia have agreed to freeze the number of independent stores that exclusively sell domestic wines, although there was already a moratorium on new licences.

The catch in the deal is that it is directly tied to reaching an agreement on all agricultural issues, including beef and dairy issues that continue to frustrate negotiators.

Sources say the two sides are making progress in the ongoing negotiations, including on European access to Canada’s hydroelectric sector and on foreign investment rules.

But some analysts believe time is running out.

With the European Union expected to soon turn its attention to negotiating access to the bigger and richer U.S. market, Canada may become an afterthought, they fear.

Speaking to reporters in London, Prime Minister Stephen Harper said negotiators are making progress, but won’t rush things to meet what he calls an artificial deadline.