Brussels, 21/10/2013 (Agence Europe) - EUROPE here provides the main points of the agreement in principle sealing the EU-Canada Comprehensive Economic and Trade Agreement (CETA), concluded on 18 October by Commission President José Manuel Barroso and Canadian Prime Minister Stephen Harper.
Though some technical and legal points remain to be finalised, the expected benefits of the agreement are already being sung by Brussels and Ottawa: once in force, it will boost bilateral trade by 23%, or almost €26 billion. For the EU this means €12 billion annual increase in its GDP.
Tariff liberalisation. The CETA will get rid of 99% of customs duties between the EU and Canada. Elimination will be swift, with most duties ending as soon as the agreement comes in.
Industrial goods. Duties will be fully liberalised, meaning savings of some €500 million per year for EU exporters.
Agricultural products. Duties will be speedily and in large part removed. After transitional periods, the EU and Canada will liberalise 93.5% and 92.8% of their tariff lines respectively. For sensitive products (beef, pork and maize for the EU, and dairy products for Canada), new market access, representing 1.9% and 1% respectively of tariff lines will be granted in the form of tariff quotas. For processed agricultural products, the EU industry, already in surplus in terms of exports to Canada, will benefit greatly from the agreement since all duties on these products will be ended. Within the category of products, European wines and spirits will derive from both tariff liberalisation and the removal of other trade barriers.
Fisheries products. Most duties will be eliminated from the agreement's coming into force and other parts of the agreement will help the EU fisheries sector in terms of market access. In addition, sustainable fishing will be developed with monitoring/surveillance measures to combat illegal, undeclared and unregulated fishing.
Non-tariff barriers. The agreement contains clauses which will increase transparency and promote bilateral cooperation on technical regulations and standardisation. A separate protocol will enhance mutual recognition of conformity evaluation procedures. The EU stands to gain €2.9 billion per year. In the motor car sector, Canada will recognise a number of European standards and will seek to recognise others, thereby making it easier to export cars to Canada. On health and plant health measures, the agreement consolidates the existing veterinary agreement and puts in place a more predictable framework for EU exporters of plants and plant products.
Services. Almost half of the expected EU gain in GDP (which could amount to €5.8 billion per year once the agreement is fully implemented) is likely to come from the liberalisation of the trade in services. The agreement will create significant opportunities for the EU in the financial services, telecoms, maritime transport and energy sectors. It will also make the temporary movement of personnel easier and it provides a framework for future mutual recognition of qualifications in the consultancy sector, for example, in engineering, accounting and architecture.
Investment. The agreement will remove or lessen barriers to bilateral investment (the two partners' total FDI inflows amounted to €360 billion in 2011) both horizontally and sectorally, by improving legal security and predictability for companies. At the same time, investment protection clauses maintain the right of the parties to regulate and implement their public policy objectives; strengthening of obligations in this area will be based on a modern, effective mechanism for the settlement of disputes between investors and states.
Public procurement. In addition to the commitments made at federal level, Canada will open the markets of its public federated and local entities. The total annual value of contract awarded by the Canadian government was estimated in 2008 to be almost €15 billion, while the contracts awarded by Canadian local authorities was valued at €80 billion in 2011.
Intellectual property. The agreement will bring the level of protection applied in Canada closer to that applied in the EU, which will be of benefit to the EU in the pharmaceutical sector and will help exporters of agricultural products which have geographical indications: the agreement will guarantee protection in Canada of a list of products, including Grana Padano and Roquefort, which may be added to, and will ensure that certain products that enjoy a geographical indication, such as Prosciutto di Parma, will be marketed under their names.
The agreement includes a chapter on sustainable development and provides for a horizontal dispute settlement mechanism and a mediation mechanism.
With Canada and the United States having liberalised trade through the NAFTA, the agreement will allow EU businesses to compete on fairer terms with US exporters on the Canadian market, benefitting from preferential treatment in public procurement and in certain services sectors, such as maritime transport. (EH/transl.fl)