Clearit.ca's Blog on Customs Brokerage and News Updates
The Canada and European Union Comprehensive Economic and Trade Agreement (CETA) sets new standards for the trade of goods and services and investment. CETA opens up new markets in the European Union for Canadian businesses and creates significant advantages for all Canadians.
For context, the EU is Canada’s second largest trading partner (the first being the US), and the world’s second-largest economy. Needless to say, the agreement eases access to this powerful market– offering great opportunities for Canadians.
What are the details?
CETA touches almost all sectors and other elements of Canadian-EU trade, in order to loosen barriers. The agreement is incredibly broad in scope, and includes aspects such as: improved access to EU goods and/or services, greater transparency, protection for investments, opportunities in EU procurement markets, etc.
In essence, this translates into tangible benefits for all Canadians.
Trade in goods
A total of 98% of EU tariff lines are now duty free for Canadian goods, with an additional percentage to be removed over the 7-yr phase in period.
Tariff removal provides more export opportunities into the European market for Canadian businesses such as producers, manufacturers, agricultural products, forestry goods, and all industrial products.
Rules of origin
Canadian exporters have well established rules that favor Canadian supply chains. In order to determine whether a product is “Made in Canada,” it must apply to these rules. Products that fit into this description will benefit from preferential tariffs.
Canada and the EU agree that keeping customs processes simple and clear are key to boosting efficiency at customs– making shipments move in a quicker and more affordable way for both parties.
This will allow Canada-based companies to bid on any level of EU opportunities in the government procurement market (worth $3.3 trillion/yr).
Canadian professionals and service workers will have more opportunities in the EU. The agreement makes it easier for Canadians to work there temporarily as well.
CETA is designed to give investors on both sides greater stability and protection for their investments. The agreement grants investors access to the Canadian and EU market.
The agreement features clear language that solidifies the right to regulate for all levels of government. There are also clear commitments within the agreement to maintain Canada’s standards, and not to undermine them for capital gain.
A study conducted by the Canada and EU determined that CETA would increase bilateral trade by 20% yearly, and boost Canada’s income by $12 billion yearly!