CHICAGO The recently announced free-trade agreement between Canada and the European Union potentially opens up lucrative markets for Canadian companies and offers more investment into the country, the Aluminum Association of Canada and the Mining Association of Canada (MAC) said.
The agreement includes the gradual elimination of tariffs on a host of aluminum products, including rod, billet and alloys, Aluminum Association of Canada president and chief executive officer Jean Simard said in a statement.
"The free-trade agreement with Europe is an unprecedented growth opportunity for the Canadian aluminum industry," he said.
The pact could see Canadian companies supply the European automotive market and niche markets currently supplied by producers in the Middle East, Simard said. But realizing that growth also depends on Canadian producers receiving low-cost energy, he said, noting that Middle East aluminum companies produced more than their competitors in Quebec in 2012 and at an electricity cost of 2 cents per kilowatt hour.
Quebec is a center of aluminum production in Canada, with much of the industry powered by hydroelectricity instead of fossil fuels. The Aluminum Association of Canada and Canadian aluminum producers, such as Montreal-based Rio Tinto Alcan Inc., have previously called on Quebec officials to provide the cheaper power that they say is necessary for the provinces aluminum industry to grow (amm.com, Oct. 4).
Politicians in Quebec also cheered the deal, predicting the province could benefit from increased trade and access to public contracts in Europe. "Because of its limited domestic market, Quebec must be more open to the world," Quebec Premier Pauline Marois said in a statement.
The pact, once in force, should eliminate European tariffs on Canadian mineral products, including iron and steel, aluminum, nickel, copper, zinc, lead and tin; increase labor mobility; and boost European investment in Canadas mining sector, MAC president and chief executive officer Pierre Gratton said in a statement.
While an agreement has been reached in principle, it has yet to be ratified, Canadian Prime Minister Stephen Harpers office said in a statement. Canadian media have said the ratification process could take years.