CETA trade deal approved: What opportunities for the European industry?
27 Февруари 2017

The EU Parliament has recently approved the trade deal with Canada known as CETA. The vote, which took place on 15/02/2017, is the result of around 6 years of negotiations and closes the approval process opened with the adoption of the agreement (by both parties) at the EU-Canada Summit in October 2016.

This definitive vote in favour of a major trade agreement (consent from the EU Parliament was required before the agreement could be provisionally applied) occurs in a context in which many political forces in Europe, and President Donald Trump in the US, are systematically promoting policies and measures against globalisation.

CETA in a nutshell

The Comprehensive Economic and Trade Agreement (CETA) is basically a trade deal that aims to eliminate or significantly reduce barriers to all trade between Canada and the EU.The agreement covers all the aspects of the commercial relationship between the two parties; from tariffs and product standards to investment and professional certification, among many other areas. CETA’s ambitious scope include provisions for improving access to EU markets for goods and services; fostering investments through greater certainty and transparency; and creating new opportunities in EU procurement markets.

Foreseen impacts

CETA is expected to provide EU companies with greater better business opportunities in Canada under better conditions, and thus supporting jobs creation in Europe. The trade deal removes customs duties, ends restrictions on access to public contracts, opens-up the services market, offers better conditions for investors and helps prevent illegal copying of EU innovations and traditional products.

CETA will specifically benefit small and medium-sized enterprises by getting rid of 99% of the taxes they have to pay at Canadian customs and facilitating them the task of bidding for contracts in Canada's government. Moreover, expensive double testing in several areas will be eliminated, while ensuring that European standards and worker’s rights are duly protected.

According to the agreement, Canada will remove customs duties on EU exports worth €400 million, which will make Europe's exports more competitive on the Canadian market and allow European SMEs to benefit from cheaper parts, components, and other inputs from Canada which they use to make their products.

EU industry’s stance on CETA and opportunities

At the beginning of 2017, the leading European industry associations (incl. Cefic, the European Chemical Industry Council) grouped under the Alliance for a Competitive European Industry (ACEI) expressed their strong support to the agreement in a letter to the European Parliament, underlying the importance of CETA as part of an economically strong Europe.

The European industry considers that this highly ambitious trade agreement will have a positive impact on trade and investment between two of the most advanced economies in the world. Commercial transactions of chemicals between the EU and Canada amounted to €2.5 billion euros in 2015, with an annual trade surplus of almost €1 billion for the EU.

Until now, Canada and the EU have traded without CETA in place, which translated into significantly higher costs for doing business. It is estimated that the elimination of customs duties and reduced technical barriers will give a boost to SMEs and could increase trade between the EU and Canada by nearly 25%, increasing EU output by about €12 billion a year.

A controversial trade deal

Since its inception CETA has been at the centre of controversy, drawing criticism from consumer, environmental and public health groups. Critics allege that CETA threatens public services, labour and environmental standards and undermines governments’ effective power to impose regulations.

The EU and the European industry sector consider that the agreement contains all the guarantees to make sure that the economic gains do not come at the expense of democracy, the environment or consumers' health and safety.

Only time will tell to what extent CETA supporters and opponents were right about the real impact of this important trade agreement on the European economy and society.

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