A closer look at CETA, part 1: Presenting new opportunities for Canadian and EU businesses

Angela Parkin, Manager, Trade Compliance With the full text of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) expected to be revealed in the coming weeks, I thought it would be a good time to take an in-depth look at what we already know about CETA, and its potential impact on the economies of both Canada and the EU member nations.In addition to major changes in trade between Canada and the EU, including regulatory cooperation and tariff reduction, CETA also places a focus on foreign investment and labor mobility. Overall, CETA should have a major economic impact on both parties:

  • The EU, with a population of 500 million people, is altogether the world’s largest integrated economy; it stands to gain about $16 billion in annual gross domestic product (GDP) with the implementation of CETA.
  • European industry will have opportunities to bid on lucrative Canadian government contracts and will have greater access to Canadian shipments of cheese and wine.
  • Canada, with its current population of 35 million people, expects about a $12 billion annual GDP gain.
  • Canada will gain secured access to the EU marketplace, and the elimination of tariffs will provide a strong competitive edge.

Business in both Canada and the European Union of all sizes stand to see greater opportunities under CETA.

Reducing technical barriers to trade

Although lower tariffs are a great starting point to opening up trade, complex regulations can still present roadblocks. That’s why CETA is expected to include provisions to incorporate and build on the key provisions presently in the World Trade Organization Agreement (WTO) on Technical Barriers to Trade. As an example, CETA will establish procedures through which Canada and the EU can request each other’s technical regulations be considered as equivalent. It also allows for interested persons in either Canada or the EU to participate in a public processes for the development of technical regulations. Additionally, a committee will be established where trade nuisances can be raised so Canada and the EU can work on resolving them as soon as possible.

An in-depth analysis of what we know about CETA

Although the full text of the agreement is still being finalized, Canada has released a “technical summary” outlining the agreement at a high level. Over the next few weeks I’ll be taking a look at some of the different areas outlined in the summary, including its potential impact on different sectors and just what things like “labor mobility” mean in the long term.

So come back next time as I look at how CETA will reduce and eliminate tariffs, as well as the agreement’s impact on the automotive sector.

Check out the other installments in our CETA series:
Part 2: Automotive sector to feel CETA’s impact
Part 3: Tariff reductions to benefit chemical, telecom industries
Part 4: Investment, labor, and geographical indicators
Part 5: Looking ahead at CETA’s impact