WHAT IS CETA?

The Comprehensive Economic and Trade Agreement (“CETA”) is a trade and investment agreement that has been negotiated between the European Union (the “EU”) and Canada. CETA aims to improve trade and investment between the EU and Canada through the removal of customs duties, ending limitations in access to public contracts, opening up services’ market, offering more predictable conditions for investors and also preventing the illegal copying of EU innovations and traditional products. UK Trade and Investment have estimated that CETA will boost the UK economy by £1.3 billion per year.

BENEFITS FOR UK MANUFACTURERS

Cutting the cost of exporting and importing goods between the EU and Canada CETA will eliminate all industrial duties – estimated to save European exporters around €470 million a year. Most industrial customs duties will be removed when CETA enters into force and some will be gradually eliminated, with the phase outs ranging from three to seven years, depending on the particular product. For instance, Canadian customs duties payable on the import of a number of EU origin aeronautic equipment, plastic products, rail related parts and equipment, marine engines and fabrication materials are going to be removed immediately. Duties payable on the import of certain EU origin automotives and vehicles will be phased out over an eight year period.

Protecting EU innovation. CETA will create more level playing field between Canada and the EU as regards to intellectual property rights, with European innovations and brands being better protected against being unlawfully copied.

Promoting and protecting investment in Canada. CETA removes and alleviates barriers for investors to enter the Canadian market. Moreover, the agreement ensures all European investors in Canada are treated equally and fairly.

Increasing access to public contracts. CETA will allow EU companies to bid for public contracts in Canada on a federal, provincial and local level. CETA includes provisions which ensure EU and US companies are not discriminated against in the bidding process and, therefore, places EU companies on an equal footing with Canadian companies. European businesses will be the first foreign companies to get this level of access to Canadian public procurement markets as no other international agreement concluded by Canada offers similar opportunities.

Increasing regulatory co-operation. CETA contains provisions that will improve transparency and form closer contacts in the field of technical regulation between the EU and Canada. For instance, the EU and Canada have agreed to enhance cooperation and communication in the area of motor vehicle technical regulations / related standards, which will make moving vehicles between Canada and the UK easier.

Increasing trade in services. CETA is providing new opportunities for EU service providers and will increase opportunities for temporary movement of employees between the EU and Canada.

Tightening up the existing ‘investment-to-state arbitration’ provisions. Such provisions allow foreign investors to bring proceedings directly against a state via a separate arbitral process, rather than using the domestic legal system. The rationale is that such a mechanism provides investors with greater certainty that claims will be heard in an impartial manner with increased prospects for enforcement.

WHEN WILL CETA ENTER INTO FORCE?

The CETA negotiations concluded in August 2014. However, CETA must be approved by the European Parliament and the governments of the EU Member States before it can come into force. It is estimated that CETA could be applied from the beginning of 2017, provided that the Council, European Parliament and the Canadian legislature approve the agreement in 2016 as expected.

CONCLUSION

The entry into force of CETA will open up a number of new opportunities for UK manufacturing companies in Canada, placing UK companies on at least a level, if not advantageous, playing field compared to competitors in other third countries e.g. the US.