A transatlantic handshake

By | Business
The 16th EU-Canada summit, Bruxelles, Belgium. Credi@flickr

In February 2017, the European Parliament voted in favour of CETA (the EU-Canada Comprehensive Economic and Trade Agreement) – a new trade deal aiming to boost investments and facilitate the export of goods and services by cutting 98% of tariffs between Canada and the EU. Canada is a significant market for the EU’s exports and a country rich in natural resources, which the EU may benefit from. Positioning itself as a progressive agreement, CETA goes beyond setting aside customs duties; the parties pledge to ensure the co-existence of economic growth, social matters and environmental protection and, by doing so, it may set a new global standard for future trade agreements.

CETA intends to benefit both the EU and Canadian companies by increasingly waiving 99% of the taxes exporters currently pay at customs. One of the significant gains for the EU firms from CETA is the approval for them to bid for public contracts in Canada. Through CETA, Canada is opening up its government tenders to EU companies more than with any of its other trading partners. CETA allows EU firms to bid to provide goods and services at federal, provincial and municipal level – the first firms outside Canada to be allowed to do so, which is a remarkable development considering Canada’s provincial public contracts market is worth twice as much as the federal one. Canada has also agreed to make the tendering process more transparent by publishing all its public tenders on a single procurement website, thus facilitating access to information for smaller EU companies aiming to approach overseas markets.

The agreement also opens a window of opportunity for the EU to export nearly 92% of its agricultural and food products to Canada duty-free, in a bid to make European exports to Canada’s market of high-income consumers more affordable and offer new export options to EU farmers, particularly to producers of wines and spirits, fruits and vegetables, processed products, cheese and other EU traditional specialties. Under CETA, Canada has agreed to protect from imitation, in almost the same way as the EU does, 143 distinctive food and drink products from specific towns or regions in the EU, such as Roquefort cheese, balsamic vinegar from Modena and Dutch Gouda cheese. Additionally, all imports from Canada are to be subject to EU’s rules and regulations. Opening markets has the potential to keep prices down and give consumers more choice and CETA aims to achieve this while respecting the standards protecting people’s health and safety, social rights, consumers’ rights and the environment.

CETA provides a framework for the EU and Canada to recognise each other’s qualifications in regulated professions such as architects, accountants and engineers which may make it easier for company staff and other professionals to work on the other side of the Atlantic, and for firms to move staff temporarily between the EU and Canada, therefore facilitating EU companies’ operations in Canada and vice versa. In CETA, the EU and Canada reaffirm their commitment to sustainable development, both parties agreeing to collaborate towards strengthening environmental protection and labour rights and offering a robust oversight role to EU and Canadian civil society – business associations, trade unions, consumer bodies, environmental groups and other organisations (NGOs).

While the EU parliament’s vote was a significant step forward, each EU national parliament needs to approve CETA in order for it to take full effect. This offers the EU member countries the chance to further review and potentially hold advisory national referendums on the agreement, insuring its provisions are in the best interest of their citizens. Considering the current international economic climate with the UK planning to exit the EU and president Trump’s withdrawal from the Trans-Pacific Partnership (TPP) and his intention to renegotiate or repeal NAFTA – the trade agreement between the US, Canada and Mexico, this landmark trade deal between the EU and Canada seems to transmit a signal of reassurance in the sphere of international business cooperation. With the US appearing to incline towards nationalism and protectionism at president Trump’s helm, CETA may pave the way for other countries to step up their leadership on matters of open economies and societies.

How may European and Canadian consumers benefit from CETA?

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