EU- Canada Comprehensive Economic and Trade Agreement Information Note

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EU-Canada-Comprehensive-Economic-Trade-Agreement-Information-Note

EU- Canada Comprehensive Economic and Trade Agreement

Information Note

Background

The Comprehensive Economic Trade Agreement (CETA) negotiations were launched in May

2009 and the content of the CETA and its general modalities were agreed in June 2009. On

18 th October 2013, the EU and Canada reached a political agreement on the key elements of

the CETA including the very sensitive issue of tariff rate quotas in agriculture. The

negotiations were concluded and formally welcomed in the Joint Statement at the EU Canada

Summit on 26 September 2014. This agreement will remove over 99% of tariffs between the

two economies and create sizeable new market access opportunities in services and

investment.

CETA will significantly improve business opportunities for Irish and European companies in

Canada. With CETA, European companies will receive the best treatment that Canada has

ever offered to any trading partner, thus levelling the playing field on the Canadian market

for EU companies.

By opening markets, CETA should support growth and jobs in the EU and Ireland and bring

further benefits for consumers. It has the potential to keep prices down and provide

consumers with greater choice of quality products. CETA will not change EU standards.

Standards and regulations related to food safety, product safety, consumer protection, health,

environment, social or labour standards etc. will remain untouched. All imports from Canada

will have to satisfy all EU product rules and regulations – without exception.

Benefits for Ireland

The EU-Canada Comprehensive Economic Trade Agreement (CETA) is a new generation

agreement that will remove over 99% of tariffs between the EU and Canada and will create

sizeable new market access opportunities in services and investment. CETA covers virtually

every aspect of economic activity. It offers significant opportunities for growth in trade with

Canada. The CETA opens up public procurement markets in the Canadian provinces giving

Irish firms increased access to Canadian public sector purchasing. Ireland also gains

unlimited tariff free access for most of our important food exports. Irish firms will also

benefit from the recognition of product standards and certification, thus saving on ‘double

testing’ on both sides of the Atlantic. In addition, Ireland successfully campaigned for a low

beef import quota from Canada to the EU thereby safeguarding our important EU market in

this area. With a long history of cultural, economic and political ties, Ireland’s enterprises are

particularly well placed to take up opportunities to trade more easily with Canada.

There are a range of sectoral opportunities for Irish Companies in Canada, including-




Financial Software,

Telecoms sector,

Digital Media, Content & Gaming,


Government Software Applications,

Agricultural Machinery, Engineering & Materials handling, and

Life-sciences & Medical devices.

CETA will save on duty costs

CETA will bring tangible benefits to consumers and companies by eliminating or cutting

customs duties– some of the most far reaching achieved by the EU in a trade agreement. This

will provide important market opportunities for companies including SMEs and could save

exporters around €470 million a year for industrial goods and €42 million a year for

agricultural goods. Importantly, most customs duties will disappear as soon as CETA comes

into effect.

Cutting customs duties will not lower or change EU standards. Canadian imports will have to

respect EU regulations. 100% of the tariff lines on industrial products for both sides will be

fully eliminated, of which 99.6% upon entry into force in the case of Canada and 99.4% upon

entry into force in the case of the EU. Canada will eliminate duties for 90.9% of all its

agricultural tariff lines upon entry into force of CETA. After 7 years, the tariffs for 91.7% of

agricultural lines will be eliminated.

New freedoms to trade in goods and services

Mutual recognition of professional qualifications

The agreement provides a framework to facilitate the mutual recognition of qualifications in

regulated professions such as architects, accountants and engineers. The relevant

professional organisations in the EU and Canada now have a framework that sets out the

conditions for the negotiation of mutual recognition agreements for their respective

professions. These will then have to be negotiated and agreed by the EU and Canada.

Easier transfers of company staff and other professionals between the EU and Canada

CETA will make it easier for firms to move staff temporarily between the EU and Canada.

This will facilitate European companies' operations in Canada. It will be also easier for other

professionals to temporarily supply legal, accounting, architectural or similar services.

Improve ability of European companies to provide after sales services

CETA will make it easier for firms to export equipment, machinery and software by allowing

firms to send maintenance engineers and other specialists to provide after-sales and related

services.

Access to Canadian public tenders

Canada has opened up its government tenders to EU companies to a greater extent than with

any of its other trading partners. Firms will be able to bid to provide goods and services not

only at federal level but also to Canadian provinces and municipalities, the first non-Canadian

firms to be able to do so. Canada’s provincial procurement market is estimated to be double

the size of its federal equivalent. There is also a proposal to create a single electronic


procurement website, which corresponds to existing intra-EU arrangements, and would

greatly facilitate the effective access of firms, especially small and medium sized enterprises,

to procurement opportunities in Canada 1 .

Avoiding costs related to double testing

The EU and Canada have agreed to accept each other’s conformity assessment certificates in

areas such as electrical goods, electronic and radio equipment, toys, machinery or measuring

equipment. This means that a conformity assessment body in the EU can test EU products

for export to Canada according to Canadian rules and vice versa. This will avoid both sides

doing the same test and could greatly reduce costs for companies and consumers alike. This

is of particular benefit to smaller companies for whom paying twice for the same test can be

prohibitive.

Trade in services

Around half of the overall GDP gains for the EU are expected to come from liberalising trade

in services. CETA will bring new opportunities for European companies by creating access

the Canadian market in key sectors such as financial services, telecommunications, energy

and maritime transport. The GDP gains for the EU could amount to up to €5.8 billion per

year, once the agreement is fully implemented.

Commitment to Sustainable Development

In CETA, the EU and Canada affirm their commitment to sustainable development. Both

agree that more trade and investment should further environmental protection and labour

rights – and not be at their expense. The EU and Canada are committed to CETA helping to

ensure that economic growth, social development, and environmental protection are mutually

supportive. CETA integrates the EU’s and Canada's obligations to international rules on

workers’ rights and environmental protection, and gives a strong role to EU and Canadian

civil society in participating in the implementation of the commitments in these areas in

CETA.

Fisheries

Most duties will be eliminated at entry into force. Besides tariffs, the fish package also

includes other elements of interest to the fishing sector, such as better access to Canadian fish

for the EU processing industry. Sustainable fisheries will be developed in parallel, in

particular with regard to monitoring, control and surveillance measures, and the fight against

illegal, unreported and unregulated fishing.

Sanitary and Phytosanitary measures

CETA consolidates the existing EU-Canada Veterinary Agreement and creates a more

predictable environment for EU exporters of plants and plant products.

1 (Note -two exceptions have been citied in two provinces - energy utilities and public transport vehicles in the

provinces of Ontario and Québec).


Regulatory Standards

The Regulatory Cooperation Forum as set out in CETA, is a voluntary cooperation

mechanism. It cannot change existing or develop new legislation on its own and does not

have any decision-making powers. It can only make recommendations to regulators and

legislators. Any initiative entailing a change in EU regulations can only be introduced and

pursued outside the CETA framework, in compliance with the ordinary legislative procedure.

Public Services

Trade Agreements including CETA cannot oblige any country to privatise its public services

or prevent governments from expanding the range of services they supply to the public.

Publicly funded services such as health, education, social services and water services are

explicitly excluded from the remit of the trade negotiations, by virtue of the mandate.

Therefore, all EU Member States’ governments remain entirely free to manage and organise

these services as they see fit.

Application of CETA

Given the position taken by Ireland and other Member States, the Commission has submitted

CETA to the Council for decision as a mixed agreement. That is one requiring both EU and

individual Member States ratification. As this process may take a number of years to

complete the agreement provides for provisional application.

Provisional application is a standard process in Free Trade Agreements. This provides for the

coming into effect of those areas over which the EU has competence. European Commission

is currently finalising the text on the provisional application of CETA, for submission to the

Council for a decision. It will be a matter for the Council and the European Parliament to

decide on the signature and provisional application of CETA.

The EU Commission is working towards the signature of CETA at the EU-Canada Summit

scheduled to take place on the 27 th October 2016. EU Trade Ministers will meet in

Luxembourg on the 18 th October 2016 to decide on the signature and provisional application

of CETA.

The full entering into force of CETA will be subject, in the first instance, to a Council

decision, with the consent of the European Parliament. Secondly, it will be subject to the

approval of all Member States through the relevant national ratification procedures. Dáil

Eireann will be part of the final decision to ratify CETA.

It is in Ireland’s interest to see strong progress towards the implementation of CETA as it will

provide opportunities for Irish based firms to further diversify their export markets. The

issue of growing market share in other markets is made even more important by the result of

the recent UK referendum on its membership of the EU.

Trade Policy Section

Department of Jobs, Enterprise & Innovation

6 th October 2016

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