LUXEMBOURG (AFP) – The European Union gave the green light on Monday for negotiations with Canada on a new free trade pact, which are to be officially kicked off at a May 6 summit.

Czech Deputy Prime Minister Alexandr Vondra arrives prior to his press conference, at the headquarters in Brussels on April 2, 2009. The European Union gave the green light on Monday for negotiations with Canada on a new free trade pact, which are to be officially kicked off at a May 6 summit (AFP/File/John Thys)

"Talks on a new economic agreement with Canada will be launched on May 6 in Prague at the EU-Canada summit meeting," Czech deputy prime minister for European affairs Alexandr Vondra told journalists in Luxembourg.

"We want to send the signal that even during the crisis we can further trade liberalisation," he added.

Last year, the 27-nation EU and Canada traded 70 billion euros (92 billion dollars) in goods and services while two-way investments reached 260 billion euros, the European Commission said.

A recent joint EU-Canada study estimated that gains for the EU from a free-trade pact would amount to about 11.6 billion euros annually, around half from services liberalisation, the commission said.

Canada was estimated to gain about 8.2 billion euros annually from closer trade ties.

"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.

"An EU-Canada agreement will be good news for companies and consumers on both sides of the Atlantic," she said.