On September 26, 2014, the Canadian Government and the European Union (EU) released the legal text of the Canada and European Union Comprehensive Economic and Trade Agreement (CETA). In our November 2013 Osler Update, we set out our detailed analysis of the CETA based on the information available as of that time.
The CETA is notable for many reasons, not least is the fact that it is the largest and most comprehensive international trade and investment agreement entered into by Canada since the implementation of the North American Free Trade Agreementin 1994 and Canada’s accession to the World Trade Organization Agreements in 1995.
CETA is being touted by Canada and the EU as “the beginning of a new, dynamic chapter in relations between Canada and the EU.” In addition to modernizing trade-related rules, the agreement provides new opportunities in government procurement and foreign investment.
Some key aspects of the CETA are:
- Benefits for Canadian manufacturers and producers exporting to the EU, including in the automotive, chemicals, plastics, agri-food, forest products, fish and seafood, and metal fabrication industries;
- Improved access to EU markets for goods and services;
- Greater protection for investments in EU markets; and
- New opportunities in EU procurement markets.
In the agricultural sector, EU tariffs on products like maple syrup, fruit, vegetables, processed pulses and grains, and sugar confectionary will be eliminated immediately upon the agreement coming into effect. Other products, like pork and beef, will be duty-free but quota-limited.
The Canadian market will also be significantly liberalized with 92% of agricultural tariff lines set at 0% immediately on entry into force of the CETA, subject to notable exclusions including for poultry and eggs. With respect to manufactured goods, all Canadian tariffs will be removed, with a transition period lasting no longer than seven years.
With 2016 as the target for implementation, it is critical for Canadian businesses to strategically evaluate how to effectively compete in the liberalized trade and investment landscape.