As we celebrate Small Business Week here, the ink is still drying on a comprehensive trade deal between Canada and the European Union said to be worth billions.
The Comprehensive Economic and Trade Agreement (CETA) is intended to generate substantial new trade in goods and services as well as give greater access for foreign investment. Once completely implemented (by 2015), it is estimated the agreement will increase bilateral trade in goods and services by 22.9 per cent (or 25.7 billion euros) and substantially boost Europe’s and Canada’s GDP.
Prime Minister Stephen Harper and European Union President José Manuel Barroso announced the agreement earlier this month and it is expected to affect just about every aspect of the Canadian economy — both positively and negatively.
Last year Canada ranked 12th on the list of the EU’s most important trading partners. For us, the EU is our second most important trade partner behind the U.S.
Statistics show trade in goods between the two to be about even at around 25 billion euros, however, trade in services is about 10 billion euros for EI imports versus about 17 billion euros for exports.
Of course as is usually the case for Canadian trade agreements, the deal appears to be a win-win for our partner.
Key elements for the trade agreement includes the elimination of duties for both sides, and industrial tariffs (EU exports will be almost immediately relieved of the costs of paying tariffs when selling goods on the Canadian market estimated at $700 million Canadian per year) and the elimination of agriculture tariffs (which will hurt the dairy industry in Canada and the beef, pork and sweet corn industries for Europe but also give us greater access to European wines).
One of the more worrisome aspects of the deal could be the elimination of duties relating to fisheries and expressed intent to allow more access to Canadian fish for the EU processing industry.
In the automotive sector, Canada will now recognize a list of EU car standards making it easier for the EU to exports cars to Canada.
One of the many positive aspects of the deal is that the EU and Canada have committed to sustainable development.
Some sectors expected to take a hit in Canada include the dairy industry, as well as the pharmaceutical industry because drug companies will get longer protection for their patents, meaning lower cost generics won’t be available as early in Canada.
Harper said he will be considering a federal compensation program for industries impacted by the agreement. The CETA is another signal from Harper of his intention to increase Canada’s presence in the global economy and lessen our reliance on our neighbours to the south.