Update 2-canada Factory Sales Slip, Weigh On August Growth

CPA Canada encouraged by Throne Speech fiscal priorities

It then pushed that back to December 2012 as the two sides struggled to overcome disagreements over pharmaceuticals, financial services, patents as well as beef and dairy exports. Earlier on Wednesday, both sides said they would soon complete the talks on the Comprehensive Economic and Trade Agreement(CETA), which officials say could generate around $28 billion in trade and new business each year. “The Prime Minister will travel to Brussels to meet with the President of the European Commission, Jose Manuel Barroso, with the goal of concluding the CETA negotiations,” said a statement from Harper’s office. Harper is due to fly out on Thursday and return on Friday. “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.

EU says it hopes to conclude free trade deal with Canada in the “coming days”

Eleven of 21 industries registered setbacks. The volume of sales, used in calculating gross domestic product, fell 0.3 percent. The report suggests manufacturing will contribute little to monthly GDP and supports the Bank of Canada’s move to downgrade its growth forecast for the third quarter to between 2.0 and 2.5 percent from 3.8 percent, annualized. “Manufacturing has stagnated in 2013 and not much positive momentum should be expected over the balance of the year as the prospects of a healthy recovery in the U.S. into the fourth quarter look precarious,” said Mazen Issa, an economist with TD Securities. After weeks of bitter fighting, U.S. lawmakers prepared on Wednesday to put forth a proposal to raise the debt limit and reopen a partially shuttered government in hopes of avoiding a historic default which could throw the economy back into recession. Canada sells about 75 percent of its exports in the United States. “Even if a short-term deal is brokered to extend the deadline into early next year, uncertainty will hang in the balance leaving the Canadian manufacturing industry in limbo,” Issa said in a note to clients. Year on year, sales were up by just 0.3 percent in current dollar terms and down 2.1 percent in volume. Growth in the Canadian economy has disappointed this year, Bank of Canada Governor Stephen Poloz said on Friday, and August trade data released last week showed exports were still not providing the much-wanted boost in the third quarter. Factory sales and exports both remain below their pre-recession peaks.

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Canada has agreed to permit a doubling of the EU quota on cheese exports to Canada in exchange for greater access for Canadian beef and pork producers. Leduc said Canadas cheese industry is angry because it threatens the fine cheese market in Canada. For the dairy farmers of Canada this is a deal that is unacceptable. Were more than disappointed, Leduc said. It will allow significant access of high quality or fine cheeses into Canada, a segment that is supplied by the smaller or medium size cheese factories in Canada. Harper has said that a free trade deal between his country and the European Union could help the EU establish a beachhead as they embark on separate free trade talks with the U.S. If a U.S.-EU trade deal is reached, it could be the worlds largest free trade pact. Canada hopes to diversify Canadas trade away from the U.S., the countrys largest trading partner. Canadas finance minister has said despite Europes struggles, Canada remains very interested because the EU is still the largest market in the world in terms of the size of its middle class. The Canada-EU deal would make it easier for Canadian companies to invest in, and sell to, the 17-member EU with its 500 million consumers. In 2012, Canada was the EUs 12th most important trading partner, accounting for 1.8 percent of the EUs external trade. The EU was Canadas second biggest partner with about 9.5 percent of external trade. The value of the bilateral trade in goods between the EU and Canada was $84 billion in 2012, according to the EU. The EU says machinery, transport equipment and chemicals dominate the EUs exports to Canada. The trade agreement, on which talks were first launched in 2009, seeks to lower or erase tariffs and facilitate mutual market access for trade in goods, services and investment.