Canada signs free trade deal with EFTA

OTTAWA: Canada said it signed its first free trade pact with European countries on Saturday, clearing the way for it to boost its commerce there by ties with Iceland, Norway, Switzerland and Liechtenstein.

The agreement, between Canada and the the four countries grouped under the European Free Trade Association (EFTA), was signed on the fringes of the World Economic Forum in Davos, Switzerland, the government said.

"This FTA will open up opportunities by bringing down trade barriers and by providing Canadian business a foothold in the heart of Europe," said David Emerson, Canada's minister for international trade, in a statement.

"Canada enjoys a close economic relationship with the countries of EFTA which are among the wealthiest and most sophisticated economies in the world."

Bilateral trade between Canada and the EFTA countries is relatively modest, worth some 10 billion dollars in 2006.

The new agreement eliminates all customs duty on non-agricultural products and reduces these charges on some farm foods. It also contains clauses on subsidies and anti-dumping measures.

It must now be ratified by the Canadian parliament to come into force. It is the first free trade deal between European countries and Canada, which already has similar arrangements with the United States, Mexico, Chile, Israel and Costa Rica.