Wall Street stocks jumped more than 1 percent. “The U.S. market is popping up on the upside, so I guess they’re optimistic, and it’ll eventually drag us up,” said Paul Hand, managing director at RBC Capital Markets. The heavily weighted financials and energy groups were up 0.3 percent and 0.6 percent respectively. Brent crude oil prices rose above $110 a barrel, while U.S. crude rose to $101.72 per barrel on U.S. budget hopes. Meg Energy Corp rose 2.7 percent to C$35.24, while Encana Corp gained 0.7 percent to trade at C$18.43. Tempering advances was a 1.2 percent drop in materials stocks. Gold miners in particular retreated, with Agnico Eagle Mines Inc off 3.5 percent at C$24.85 and Goldcorp Inc off 2.2 percent at C$24.41. Bullion prices retreated as investors moved away from the safe-haven metal amid prospects of a last-minute U.S. debt deal.
“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.
Negotiations started in 2009 with the expectation they would be concluded by late 2012, but they became deadlocked over a few holdout issues, mainly in agriculture. Canada asked for increased European access for its beef while the EU sought to lower tariffs of up to 300 percent shielding Canada’s supply-managed dairy industry from imports of European cheeses. On Wednesday, the Canadian dairy farmers’ association said it would not support a deal that would allow the EU to sell more cheese in this country, arguing that its current quota was already generous. “This (potential) 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,” the Dairy Farmers of Canada said in a statement. Rudy Husny, spokesman for Canadian Trade Minister Ed Fast, however, reminded that Harper committed to protecting Canada’s supply-managed agricultural sectors. “Our government has been clear. All of the three key pillars of our domestic system of supply management must remain intact: production controls, import controls, and price controls,” he said. The actual amount of the proposed EU cheese quota increase is small, he said. Canadian business leaders meanwhile applauded Harper’s commitment to seal the Canada-EU trade deal soon. “After four years of negotiations, we are heartened by the prime minister’s assurance that negotiations are close to complete on the Canada-EU Comprehensive and Economic Trade Agreement (CETA),” John Manley, president of the Canadian Council of Chief Executives, said. “On both sides of the Atlantic, the CETA will create jobs, spur investment and promote economic growth.” Manley, a former top minister in previous Canadian governments, noted that in most trade agreements, “neither side will get everything it wants.” But he said: “Narrow issues whose economic value is arguably marginal in the context of this trade agreement should not distract us from the huge gains for both sides.” A transatlantic deal would give Canadian companies access to 500 million European consumers and eliminate 98 percent of Canadian tariffs on EU goods. If Europe can secure a free trade deal with Canada, it would lay the groundwork for a planned, much larger accord with the United States, both French and Canadian leaders said in March.