The recently agreed free trade agreement between Canada and the European Union (EU) could spark a major increase in European apparel exports to Canada.

Bob Kirke, executive director of the Canadian Apparel Federation, told just-style: "It could have a significant impact."

Canada and the EU last week announced an agreement on a Comprehensive Economic and Trade Agreement (CETA), following four years of negotiations.

At present, the EU is more competitive regarding labour costs, which means Canadian buyers may want to import European products rather than buying at home, said Kirke.

He added that while details have not been finalised, the industry expects tariffs on apparel to be eliminated under the CETA. Currently, most duties stand at 18% on EU apparel exported to Canada, and 12% on Canadian clothing and accessories exported to the EU.

On the European side, an EU source confirmed at a background briefing in Brussels that European textiles would be one of the main winners of the CETA, alongside other sectors, including vehicles, chemicals and machinery.

However, the European Apparel and Textile Confederation (Euratex) declined to comment until more details are firmed up.

In 2012, Canada exported CAD117m (US$113m) to the EU, while importing CAD363m (US$353m) from the EU, Kirke said.

Meanwhile, Canada's fur apparel exporters are optimistic: "It is good news," said Alan Herscovici, executive vice president, of the Fur Council of Canada.

The fur industry expects the deal will remove tariffs on all fur products - an outcome desired by both Canadian and European exporters, he said. At the moment, the EU imposes a 3.7% duty on Canadian fur apparel imports.

Although the EU has not been a major importer of Canadian fur apparel, Herscovici said the trade deal could boost fur exports.

The tentative CETA agreement comes when the popularity of fur is rising, including in the European market, boosting prices. "At a moment when the fur trade is really trending upwards, it [the agreement] will be good timing," said Herscovici.

With additional reporting by Carmen Paun.