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Canada's labor movement has said that the Canada-European Union trade pact under negotiation is a "grave error" that risks hurting Canadian democracy.



The Canadian Labor Congress said it would support an agreement between Canada and the EU that embodies "the most positive features of the European social model," such as higher standards and protective regulation.



But this is not on offer, it said.



Canada and Europe were instead seeking to "export neo-liberalism" -- the market-driven policy that stresses liberalized trade and open markets -- and push it on the World Trade Organization's current Doha negotiations, the CLC said in a statement.



"This is a grave error."



Canada's trade minister said the two sides are on track to finalize a free trade agreement in 2011. Official talks for a Comprehensive Economic and Trade Agreement were launched in June 2009.



CLC researcher Teresa Healy told AFP the trade pact, currently in its fifth round of negotiations, would constrain the ability of governments to exact "local benefits" from suppliers in procurement deals.



Such benefits might include guarantees of local job creation or environmental standards, or favouring locally produced goods and services.



"This is not as much a trade agreement as it is an investor rights agreement," Healy said, explaining that company rights would trump democratic governments' decision-making.