Relations between the EU and Canada were first made official
in 1959 with the signing of an agreement on nuclear cooperation. Current
relations between the EU and Canada
were based on the 1976 framework agreement on trade and economic cooperation
and on the declaration of 22 November 1990 concerning US-Canada relations.
The framework agreement, which at its time was the first cooperation
agreement to be signed with an industrialised nation, provided for a
strengthening of trade relations and to this end sought to promote trade,
economic cooperation and the creation of joint industry-business enterprises.
This agreement laid the foundations for the development of cooperation and
political consultation in a number of areas. It also facilitated efforts
deployed on both sides to manage and resolve disagreements on trade and
investment matters and encouraged greater dialogue, with both parties keen to
help liberalise trade on a multilateral basis within the GATT and WTO
frameworks. In 1988 steps were taken to promote political dialogue and in
1990 the President of the European Council and the Prime Minister of Canada
approved a joint declaration on EC-Canada relations. This declaration
reaffirmed a number of objectives, including the commitments and perspectives
of both parties and the express wishes of the European Union and Canada to
have their relationship formalised by way of a long term agreement. This
declaration, while not actually altering the terms of reference of the 1976
agreement, did for the first time include the political aspects of the
relationship and set up new consultative mechanisms that reflected the
importance of having a solid foundation from the outset. The declaration also
generated the political momentum needed to extend the level of cooperation to
other areas and resulted in the deployment of a whole range of activities as
part of a more global structure. New agreements were concluded in the fields
of science and technology and, more recently (in 1995), in the areas of
higher education and professional training. In addition, a regular series of
political consultations became established at each and every level.
Structured political dialogue was launched in 1988 and was subsequently put
on a much wider footing as a result of the 1990 declaration. Henceforth,
meetings were to take place at the highest level between the President of the
European Council, the President of the Commission and the Prime Minister of
Canada, while since November 1993 the troika of political directors of the
European Union had been holding biannual consultations with Canada’s
political director on a wide range of international issues of mutual
interest. On a trilateral level the EU regularly met senior Canadian and
American civil servants within the framework of a special working group set
up to examine joint policy towards Iran, while Canada had also expressed its
desire to participate in various EU working groups charged with dealing with
a number of specific issues. Between 1985 and 1994 trade in goods was fairly
well balanced, although there had been slight rises and falls in the flow.
Trade in services, on the other hand, had developed somewhat differently and
there had been a strong growth both in the import and export of services
between the two partners. Owing to the proportionately smaller contribution
of the services sector to commercial activity as a whole, however, this
sustained growth had not been sufficient to compensate for the relative
losses recorded in the goods trade. Compared with the commercial trade sector,
there had been continuous growth in direct foreign investment. The European
Union was second only to the United States
as a target for direct Canadian investment, with European business accounting
for some 20% of Canada’s
entire overseas investment in 1994 – compared with 13.7% in 1983. Not to be
outdone, the EU for its part had become Canada’s second most important
overseas investor, representing 22.6% of the foreign capital invested there
in 1994 (compared with 14.1% in 1983). This movement of trade and investments
was likely to suffer from the economic relationships that Canada was
developing with neighbouring countries. The free trade agreement between the USA and Canada
took effect in 1989 and in 1994 Canada,
the United States and Mexico signed
up to the North American Free Trade Agreement (NAFTA). Canada’s
participation in the CEAP also demonstrated the growing interest being shown
in the ‘Asian Pacific’ region. The European Union and Canada
collaborated extensively in the field of development cooperation and both had
access to major financial resources for aiding third-world countries. Over
the years the two parties had established close links, involving annual
consultations at a very high level. The Commission considered that it was now
important to revitalise this relationship. The humanitarian principles
applied by the EU were in many respects shared by Canada, which was a major donor.
Exploratory talks had been held in order to examine the measures needed to
establish closer cooperation between the Commission and the Government of
Canada. The European Union and Canada shared many concerns in respect of
justice and home affairs, including combating international crime and the
drugs trade and the need to draw up common standards for immigration and
political asylum, and the Canadian authorities had recently indicated on a
number of occasions that they would be keen to cooperate with the EU in these
areas.