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The European Union and Canada have agreed to sign a free trade agreement (FTA).

The Canada–EU trade agreement (CETA) makes Canada the only G8 country to have such agreements with the EU and the US: the two largest markets in the world.

CETA has been in the pipeline for four years and was signed by Canadian prime minister Stephen Harper and EU premier José Manuel Barroso in Brussels.

It is expected to remove 98% of bilateral tariffs, with officials suggesting that it could boost bilateral trade by 20% to €25.7bn a year.

However, many view the real value of the FTA as being the precedent it sets for future discussions between the EU and US.

Discussions over the Transatlantic Trade and Investment Partnership (TTIP) have stagnated over the course of the US governmental shutdown. It’s hoped that the creation of CETA might provide more impetus to negotiations around the larger agreement.

“Generally, we view these types of trade agreements as a positive,” David Madani, an economist at Capital Economics and Bank of Canada alumnus tells GTR. “But this trade deal won’t have huge positive implications for Canada’s GDP growth outlook. Canada’s exports to the EU are fairly small and steady – only 2% of GDP. Canada currently has a trade deficit with the EU. It’s unclear whether this will widen or narrow as a result of any signed trade deal.”

European exporters to benefit include those in the cheese and wines business and automotive companies. The removal of a 10% import tariff on European passenger vehicles, in particular, is expected to lead to rising sales, as long as the end-retailer passes on the saving it makes from tariff removals.

It is also expected to lead to an influx of Canadian meat produce in the European market, with annual sales expected to grow by C$1bn once the treaty is ratified in two years time.

The state of Alberta is expected to export an additional 65,000 tonnes of beef to the EU – a prediction which has already been met with reservations from the French government, keen to preserve its agriculture sector.

Trade minister Nicole Bricq says: “I am waiting for confirmation from the commission that this accord, particularly in agriculture, does not a set a precedent for talks with the US.”

Despite the fact that products such as Renault cars and Brie cheese can be among the main beneficiaries of such FTAs, France has often been the most vocal critic of Europe’s forging of more open trading relationships with its counterparts.

This year, it became involved in prolonged wrangling with China, after Beijing introduced tariffs limiting the import of French wines, after the EU trialled similar measures on Chinese solar panels.

Early on in negotiations between the EU and the US around the biggest FTA in history, France insisted that the opening of its cultural sectors was not up for discussion, prompting economist Sibylle Lehwad of the Centre for Economic Studies in Munich to tell GTR: “The announcement by France last Friday shows it will be difficult to reach an agreement and in my opinion there will be more sectors like agriculture in which it will be difficult to come up with one.”