Oilsands not a sticking point in EU trade talks

Canada's oilsands aren't a sticking point in trade talks with the European Union, Denmark's trade minister said todayin Ottawa.

But rules of origin about how much of a product has to be Canadian to fit undera tradeagreement are still being discussed, the Danish parliamentarian admitted.

"I think the rules of origin lets be frank its still one of the items still being discussed. Lets see where it ends," Pia Olsen Dyhr said after a meeting with Trade Minister Ed Fast.

Determining which products are Canadian can be tricky because of how closely the economy is linked with the U.S. Cars and the various components, for example, can cross the borderseveral times before being fully assembled. Animals are often raised south of the border but slaughtered in Canada. Even candy made domestically could be considered a U.S. product because most of the sugar used to make confections comes from America.

Denmark currently holds the presidency of the EU, which rotates the countries for the title every year.

But the oilsands and the associated environmental effectsare not an issue that's slowing down the talks, Dyhr said. The EU is looking at classifying Canadian oilsands productsas more harmful than other oil through its fuel quality directive.

"Its two different tracks. We have the discussion of course inside the European Union on the fuel quality directive," she said. "But that has nothing to do with the discussion on a free trade agreement with Canada."

Dairy, poultry also on the table

Supply management, an arrangement that allows Canadian dairy, egg and poultry farmers to control the supply and in essence set their own price while setting massive tariffs to protect them from imported products, is another issue still on the table, Dyhr said.

"Were still discussing this issue. Lets see how it moves forward," she said, adding the negotiations have been positive.

Fastrepeated thegovernment's position on supply management, which has also been cited as a barrier to joining the Trans-Pacific Partnership trade talks with the Asia Pacific region.

"Canada started right from the beginning by saying that we were prepared to discuss all issues at the table. At the end of the day, however, Canada continues to defend its areas of sensitivity as of course the EU does," Fast said.

"Thats typical within free trade negotiations."

The real goal, Fast said, is to reach an "ambitious agreement" that substantively moves forward the trade objectives of both partners.