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Canada-Euro Deal Moves Along

Canada received a nice Valentine’s Day gift as Euro parliament members voted in favor of the Comprehensive Economic and Trade Agreement (CETA) by a 408 to 254 vote. This now means that parts of the agreement that links Canada to the European Union, such as tariff reduction, will come into force eight years after the initial negotiations had started.

The vote passed relatively well, considering the chaotic crowd of protesters gathered outside the parliament in Strasbourg contesting the deal. The vote carried on, and with 33 members that abstained, the majority comfortably won the vote to the great relief of Canadian officials on site for the historical moment.

On this side of the Atlantic, it seems that most Canadians approve of CETA according to a recent survey by Angus Reid Institute which states that 55 per cent approve of the deal. That’s down 13 points from July 2014, when the agreement was in the finals stages of negotiation. The percentage of Canadians that are against CETA is around 10 per cent while the numbers of those who have no opinion on the subject has gone from 22 to 35 per cent.

So what does CETA mean for the Canadian consumer? Well, more cheese, cheaper wine and cars but also possibly higher costing drugs.

Cheese please? CETA will bump up the maximum import level of European cheese from 18,500 tonnes per year to nearly 30,000 tonnes. Consumers shouldn’t expect to find a sudden abundance of their favorite euro cheeses at their local super market anytime soon as the change will be phases into action over a period of five years.

Due to a change in the length of patents in Canada, imposed at the EU’s request, it is possible that the cost of prescription drugs might rise. According to new CETA rules, drug manufacturers will have an additional 2 years of patent protection during the drug approval process which means down the road that it could take longer for generics to hit the market.

But on the other side, on a happy note, if you’re thinking about buying an Audi or BMW you’re in luck…although if you can wait about seven years, you’ll get a great deal. Euro luxury passenger vehicles will become a little less expensive as Canada will drop its 6.1 per cent tariff on these goods. The tariffs will be phased out in a period of seven years and of course, it all depends on the manufacturers too: ultimately they have the final say on the price of their cars and if they wish to pass on the savings to the consumers.

But rest assured, although you may not be able to run out and buy a cheaper BMW tomorrow, odds are you’ll be able to discover a new European liquor or wine at your local liquor store. Wine and spirits from Europe can now enter the country tariff free which means more choices and smaller prices.

Early this week while addressing the European Parliament, Prime Minister Trudeau stated about CETA: “Now we need to make it work … If we are successful, CETA will become the blueprint for all ambitious, future trade deals. If we are not, this could very well be one of the last. Make no mistake about it, this is an important moment.”

*The  CETA poll by the Angus Reid Institute was conducted on Feb. 13 and 14, 2017, via Internet interviews with 1,509 Canadian adults who are members of the Angus Reid Forum. A probabilistic sample of this size would yield a margin of error of +/- 2.5 percentage points, 19 times out of 20.