The Comprehensive Economic and Trade Agreement (CETA) is an EU-Canada treaty. Here’s what you need to know to fully understand its benefits.
What CETA Is
The Comprehensive Economic and Trade Agreement (CETA) is a newly negotiated EU-Canada treaty. The European Commission adopted the proposals in July of 2016 and was ready to sign on it after it had been translated in all EU-Canada official languages. Before the agreement was enacted, it had to be approved by the European Parliament and the governments of the EU's member states. The EU applied the agreement only once all institutions agreed. CETA is the first trade agreement between the EU and a major world economy.
The Benefits to CETA
- It will remove customs duties (within seven years there will be no more customs duties between the EU and Canada on any industrial products, for example).
- It will expand the services market.
- It will end restrictions on access to public contracts.
- It will offer predictable conditions for investors.
- It will prevent illegal copying of EU innovations, trademarks, and products (e.g., food).
- It will boost growth and jobs across Europe.
- It will increase trade and investment across Europe.
- It will strengthen cooperation between the EU and Canada.
How Much Trade There Is Between Canada and the EU Already
According to the European Commission in 2014, “Canada is the EU’s 12th most important trading partner. The EU is Canada's second-biggest trading partner after the US and accounts for nearly 10% of its external trade. Trade in goods between the EU and Canada is worth almost €60 billion a year.
Machinery, transport equipment, and chemicals are the EU's main exports to Canada. Commercial services – mostly transport, travel, insurance and communication services – exceed €27 billion." Note: This data does not account for Brexit or its impact on trade in the EU in the future.
Public Contracts Between EU-Canadian Companies Just Got Easier
With CETA, EU companies will be able to bid for public contracts in Canada at all levels of government.
- Every year the Canadian government, provinces, and municipalities buy goods and services worth more than €30 billion from private companies.
- EU-based businesses will be the first companies to get that level of access to Canadian public procurement markets. No other currently existing international agreement tied to Canada offers similar opportunities.
- Canada plans to create a single electronic procurement website that combines information on all tenders to ensure that the EU companies can take advantage of these new opportunities.
What the CETA Expects to Accomplish
Under CETA, the EU and Canada have agreed to:
- Step up regulatory cooperation: The EU and Canada will operate a method to exchange experiences and information among regulators.
- Protect European innovations, artists and products: CETA will level the playing field in intellectual property rights between the EU and Canada. The intent is to bring its copyright protection in line with the World Intellectual Property Organization rules.
- Open up trade in services: Half of the rise in the EU’s economy from CETA is expected to come from opening up trade services such as financial, telecommunications, energy, and maritime transport.
- Promote investment: This will be done by removing barriers, providing a solid legal system and resolve investment disputes quickly, fairly and in a transparent manner.
- Ensure good cooperation in the future: If all else fails and things go south, the CETA has created a framework from which to ask for a panel of independent legal experts to be set up with the goal to efficiently tackle any dispute that hinders trade and investment between the EU and Canada.
- Protect democracy, consumers and the environment: CETA has been set up to serve the people, rather than ever undermine for the sake of commercial gain.
CETA and Transatlantic Trade and Investment Partnership (T-TIP) Difference
CETA and T-TIP are two separate negotiations with two different partners. Each is negotiated on its own merits and on its own conditions. According to the European Commission, the goal of CETA is “to create a comprehensive agreement that helps our companies prosper in the transatlantic market place in order to generate growth and create jobs.”