Friday, June 20, 1997, 5:00 p.m.

Relations between Canada and the European Union may be warmer and trade liberalisation a predominant goal, but a free trade agreement between the two is not actively being pursued, according to senior government officials. Instead they indicated that concrete progress has taken place in the last six months towards a series of initiatives aimed at rejuvenating the relationship between the two. Called the Action Plan, the focus is on economics, trade, foreign policy, security and other transnational issues.

At one of several bilateral meetings on Friday, Prime Minister Chrétien discussed the substantive issues of the plan with the President of the European Commission Jacques Santer and the commissioner's external economic affairs commissioner Sir Leon Brittan. The meeting was described by senior government officials as the most successful transatlantic summit between Canada the EU since the two experienced troubled relations on the fisheries issue.

Brittan mentioned that Canada is progressing better than expected with the Action Plan and that the EU welcomes Canada in the transatlantic business dialogue between the EU and the US. The meeting also reviewed the agreements negotiated in the last six months since the signing of the Canada EU Action Plan . The most important agreement signed was the Mutual Recognition Agreement, which could facilitate increased relations with the EU in the area of 30 per cent. Canada currently exports $550-million and imports $250-million in goods from the EU.

According to a Canadian government official, the meeting began with a discussion of the single European currency, the euro. Canada's interest in the euro is that if the Europeans accomplish it successfully this could bring benefits to Canada in terms of investments and exports. The EU was created in 1957 when it was named the Common Market and had six members. Now with 15 member countries, it is the world's largest trading bloc and has a higher GDP than the US.

Easing trade barriers is to be the subject of a Joint Study which will will examine all remaining trade barriers that affect the bilateral relationship. Appointments will be made for a representative from both the EC and Canada. Canadian officials said the first step will involve drawing up a list of barriers and then another list of ways to remove them. The mechanism for the process could take place either bilaterally or through the WTO. Stage two will involve the preparation of a set of recommendations with input from the business community. Officials indicated that it is important to have the involvement of the Canadian business community in transatlantic business dialogue. As far as a deadline, it is hoped that by May 1998 the agreement will be finalized. Canadian officials say that there is no particular rush and that the government is not actively thinking in terms of a free trade agreement with the European Union. In addition there are some countries in the EU which are protectionist in nature.