The Canada – EU Free Trade Agreement Demystified: New Opportunities for Trade, Investment and Government Procurement

Abstract

The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) 'agreement in principle' was signed on 18 October 2013 by Prime Minister Harper and European President Jose Manuel Barroso. On 29 October 2013, the Prime Minister tabled a report on CETA and hailed it as: 'the biggest deal ever concluded by Canada'. If it is not the biggest deal, it is certainly a big deal. CETA provides a variety of trade, investment and government procurement opportunities to Canadian and EU businesses which are expected to pay dividends for years to come. CETA will provide Canada with access to the twenty-eight member EU, which has over 500 million consumers, and CDN 17 trillion in annual economic activity. It will remove 98% of EU import tariffs on goods originating from Canada (e.g., aerospace parts, agricultural products, automobiles, beef and bison, chemicals, dairy products, forest products, fruits and vegetables, grains and oils, industrial machinery, iron and steel, IT equipment, medical equipment, metals, minerals, plastic products, and seafood products). CETA could boost Canada's annual income by CDN 12 billion, create 80,000 jobs, and result in a 20% annual increase in bilateral trade. Once CETA is ratified, Canada will have preferential trade agreements with countries having 53% of global GDP (approximately CDN 36.4 trillion), and a trade advantage over the USA. The EU expects CETA to result in duty savings of approximately CDN 700 million. CETA will remove Canadian import tariffs on goods including automobiles, some cheeses, industrial machinery, seafood products, and wine and spirits. European exporters will save three times as much in annual duty payments as Canadian exporters. Canadian businesses and consumers stand to benefit if retailers and exporters pass on duty savings to them. At present Canada is the EU's fourth largest source of investment, and the EU's twelfth largest export market. CETA is not just a free trade agreement. It addresses issues such as services and investment; government procurement; intellectual property; dispute settlement; sustainable development, the environment; immigration and labour. This ambitious agreement will create business opportunities for a large number of sectors including: advanced manufacturing; the automotive industry; chemicals and plastics; agriculture and agri-food; food processing; metals and mineral products; fish and seafood products; information and communications technology; services; investment and government procurement. Within an improved regulatory environment under CETA, Canadian and EU businesses will be able to forge new alliances, and access new markets.