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Sat, 06 Jul 2013 14:15:00 GMT | By Deirdre McMurdy, MSN Money

Coming political and economic headwinds

Things may slow in summer, but there’s a lot to fret about this fall.

Deirdre McMurdy

Whatever else may have fundamentally changed in life because of time and technology, it remains an immutable fact that everything — and everyone — slows down during the summer.

The general pace of business may reflect this annual period of drift, but that doesn’t mean you can relax entirely this summer. There are several simmering issues poised to flare as soon as the weather turns a bit crisper.

Tricks of trade:

After four years, free trade negotiations (aka the Comprehensive Economic and Trade Agreement or CETA) between Canada and the European Union aren’t likely to bear fruit again this summer — despite repeated threats and random criticism from EU officials.

The EU has threatened that momentum will be lost when all of Europe goes to the beach in August (just the sort of dynamic folks you want to do business with).

They have also threatened that the start of free trade negotiations between the EU and the U.S. would shove the Canadian agenda to a back burner. But that’s before revelations that the U.S. is spying on EU officials, including those at the EU office at the United Nations. Not surprisingly, the completely lack of American contrition has added an unpleasant edge to the nascent process.

For both Canada and the U.S., the biggest hurdle with the EU negotiations is agreement on agricultural trade and duties. Canadian cattle farmers, for example, are chafing at the extra costs they’d incur if they had to convert production to the hormone- and antibiotic-free beef demanded by the EU.

Cheese is also a sticky issue.

Pipe dreams:

Although the U.S. State Department suggested back in March that a decision on the Keystone XL pipeline could be made by this summer, that just ain’t going to happen. The Department received over a million comments in the environmental review approval phase alone.

That said, the recent political upheaval in Egypt and the ongoing turmoil in Syria have cast a new light on the proposed construction of the controversial pipeline between northern Alberta and the U.S. Gulf coast.

Oil prices have climbed because of the risk of supply disruption from the Middle East — a development that’s particularly unwelcome as the U.S. economy sputters back to life.

By year-end, the Obama administration is generally expected to make a decision on whether or not to allow the highly controversial project to proceed. And Canada’s argument that it’s the most politically stable source of oil in the world is suddenly a whole lot more compelling politically and practically — especially for a country sensitive to energy security issues.

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