LUXEMBOURG (Reuters) - European Union foreign ministers agreed on Monday to launch talks on a bilateral trade pact with Canada worth about $27 billion a year.
The launch of talks between Brussels and Ottawa is widely seen as giving a political boost to falling world trade during the global economic crisis.
"The foreign ministers approved the talks, which should formally start at the EU-Canada summit on May 6," a spokesman for the EU's Czech presidency said, referring to a meeting of Canadian and EU leaders in Prague.
Canada and the 27-nation EU first agreed in October 2008 to seek a "comprehensive economic agreement" to boost two-way trade by lowering tariffs on goods and services and encompassing areas such as investment, regulatory cooperation and rules of origin.
France had expressed some reservations about starting the negotiations because of the poor economic climate, but lifted its veto on Friday after its concerns were met.
A joint study by Brussels and Ottawa showed in October that the EU and Canada would stand to gain about $27 billion a year by liberalizing trade further.
The study estimated the annual real income gain by 2014 would be 11.6 billion euros for the EU, representing 0.08 percent of EU gross domestic product.
The gain for Canada would be about 8.2 billion euros, representing 0.8 percent of Canadian gross domestic product.
"The decision today sends a signal that the European Union remains committed to trade and open markets at a time of economic crisis and rising protectionist sentiment," EU Trade Commissioner Catherine Ashton said in a statement.
"An EU-Canada agreement will be good news for companies and consumers on both sides of the Atlantic."
In 2008, trade in goods and services between the EU and Canada exceeded 70 billion euros.
Europe's largest business lobby, BusinessEurope, said the bilateral deal would "secure real market access for goods, services, procurement and investment" for European companies.
"We also look for much closer cooperation on raw materials, better IPR (intellectual property rights) protection and more mobility for business personnel," Adrian van den Hoven, BusinessEurope's International Relations Director said.
Writing by Darren Ennis; Editing by Matthew Jones