Mobilizing CETA's Opportunities for Canadian Business
Maria Marchyshyn, G7 and G20 Research Groups
October 25, 2017
The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) has been in the works for many years. The process started at the EU-Canada Summit in Berlin in June 2007 when Canadian and EU leaders agreed to conduct a joint study examining the costs and benefits of pursuing a closer economic partnership. The study showed favourable results. Thus nine official rounds of negotiations and numerous administrative hurdles followed. Finally, on October 30, 2016, Canadian prime minister Justin Trudeau traveled to Brussels to sign the final text of the agreement during that year's EU-Canada Summit.
Two more steps of democratic oversight are required before CETA comes into force. The first, completed, step was to hold a vote in the European Parliament. This took place on February 15, 2017 and was approved. The second step, currently underway, involves ratification by all EU country parliaments. However, substantial parts of the agreement can already be provisionally applied from September 21, 2017, except for certain points in the investment section.
For Canadian business and Canadians there are many reasons to be excited about CETA. CETA will create new jobs and economic growth in Canada. Given that the European Union is the world's second-largest market, CETA presents tremendous opportunities and a real edge for Canadian business. The agreement covers virtually all aspects and sectors of EU-Canada trade in order to eliminate any barriers that now exist. Before the agreement, only 25% of EU tariff lines on Canadian goods were duty free. Upon CETA's entry into force, the EU will remove tariffs on 98% of its tariff lines. CETA will also cut red tape by simplifying custom procedures and reducing non-tariff barriers to trade, such as testing and certification costs. Furthermore, CETA will improve access for trade in services, giving Canadian service providers the best market access the EU has ever given. The new agreement will encourage companies on both sides to invest more. By investing in Canada, European companies will also gain preferential access to the U.S. market, while Canadian companies will benefit from greater certainty, transparency and protection under CETA. Half of the EU's economic growth from CETA is expected to come from more trade in the services sector. Moreover, the new trade agreement will provide Canadian business access to public contracts at all levels of EU member states' governments, EU institutions and a number of entities in the utilities market.
CETA is widely hailed as the "new generation" free trade agreement for several reasons. Notably, it goes beyond commercial interests and addresses issues such as labour market liberalization, mutual recognition of qualifications and environmental protection. Being so progressive in its scope, CETA can and will serve as an example for future free trade agreements. Indeed, it already serves as a point of reference for the current renegotiation of the North American Free Trade Agreement (NAFTA) between the "three amigos" of Canada, the U.S. and Mexico.
Furthermore, the G7 endorsed CETA in the collective communiqués issued in the leaders' name at both the 2016 Ise-Shima Summit and 2015 Elmau Summit, welcoming such bilateral trade agreements as a support for global economic growth. And in 2017, both the G7 and G20 summits were hosted by European countries, with both emphasizing the benefits of trade, thus providing CETA with more relevance in the global arena.
In the current global environment of protectionist and nationalist tendencies, CETA shines as a beacon of hope. It showcases the strong belief by both Canada and the European Union that free trade is a key element of a prosperous and open society, thus setting the stage not only for an exchange of goods and services, but of people, technologies and ideas.
[back to top]
Maria Marchyshyn is a researcher for the G20 Research Group, the G7 Research Group and the BRICS Research Group and has been involved with them since 2008. Her work focuses on macroeconomic issues, including international trade and finance and topics regarding the European Union. She has worked on compliance reports, and currently specializes on summit conclusions on a wide range of topics. She has attended the 2014 Brussels Summit as a member of the G7 Research Group field team. Maria is the Vice President of Finance with the Organization of Women in International Trade (OWIT). She has worked in the financial industry and as a researcher at the European Parliament in Brussels. She speaks five languages and is currently learning her sixth, Japanese. Maria completed an honours degree in International Business Administration (IBBA) with specialization in finance at the Schulich School of Business at York University in 2004.
This Information System is provided by the University of Toronto Library
All contents copyright © 2018. University of Toronto unless otherwise stated. All rights reserved.