2nd Trade & Investment Report: CANADA

CEMA Trade & Investment Report

- CANADA -

The 2nd edition of CEMA's Trade & Investment report is dedicated to Canada and the EU-Canada Comprehensive Economic and Trade Agreement (CETA). It aims to give an analysis of the trade developments on a certain country, Canada this time, as well as an overview of the main characteristics of the country related to the agricultural machinery industry. 

The report opens with a foreword by Emma McClarkin MEP on CETA. Furthermore, it provides insights on the following issues: 

1. Economy

2. Agriculture

3. Agricultural Machinery Market

4. Technical Legislation

5. Trade Policy

The full edition of the report can be found HERE..

 

22 March 2017

CETA: the landmark free trade deal with Canada

On 15 February, after 7 long years my colleagues in the European Parliament and I went into the crucial plenary session to vote on the Comprehensive Economic and Trade Agreement between the EU and Canada (CETA) and a majority voted for this modern FTA.

This wasn't without protest however.  A small but vocal group of demonstrators lay on the ground outside the EP and many coordinated email campaigns had landed in our inbox. Often, they have little understanding of the detail of the deals and are   misinformed. 

Yet whilst a vocal minority can obstruct Parliamentary business and gain the attention of the media, we cannot hear the silent majority of more than 500 million Europeans who will greatly benefit from CETA.  We must learn to communicate better about Trade and the benefits of the deals we are negotiating.

I must confess that the final result exceeded my own expectations. 408 MEP colleagues voted in favour and 254 voted against CETA. It was almost a majority of two-thirds, which is can be difficult to reach in the European Parliament with its seven political groups and their diverging views. What a success and what a broad consensus!

As Prime Minister Justin Trudeau said in his speech the day after the vote: "CETA is a comprehensive blueprint for responsible economic co-operation (…) it will result in the creation of good, well-paying jobs for middle-class workers... It will put food on the table for families, and help grow and strengthen our communities."

I couldn't agree more and in addition, in my view, CETA will positively impact your industry. CETA will remove more than 99% of tariffs that are currently imposed on trade between the EU and Canada. It will lower the price Canadian farmers have to pay for the European agricultural equipment they need. CETA also foresees making it easier to send maintenance engineers and other specialists to provide after-sales and related services support for equipment, machinery and software.

Moreover, CETA will also help European farmers to access the Canadian market. Most of the customs duties on farm produce, processed foods and drinks will disappear. More specifically, Europe will be able to export about 92% of its agricultural and food products to Canada duty-free making European exports to Canada's market of high-income consumers become cheaper. There'll only be limited quotas for a few sensitive products such as beef, pork and sweetcorn for the EU and dairy products for Canada. CETA won't open up the market for poultry or eggs in the EU or Canada, and it will respect the EU's entry-price system.

Furthermore, under CETA, Canada has agreed to protect 143 Geographical Indications (GIs) – distinctive food and drink products from specific towns or regions in the EU. Beyond current protections for Whisky, they now include products like Roquefort cheese, balsamic vinegar from Modena and Dutch Gouda cheese. Canada will protect these traditional European products from imitations in much the same way as the EU does.  So, for example, cheese sold in Canada as Brie de Meaux will have to come from Meaux.

These new protections will help European farmers to secure their business model, increase exports and profits and therefore secure their investments in agricultural machinery.

As ambitious as these measures look like they are still the more traditional elements of a trade agreement. Where CETA clearly innovates is the field of regulatory cooperation. A critical item for your industry. 

CETA will help your companies that export to Canada to cut costs. Conformity assessment certificates will be put in place, which will establish that your products have been tested and meet:

  • the relevant technical rules and regulations and
  • any health, safety, consumer protection or environmental standards that also apply.

The EU and Canada have agreed to accept each other's conformity assessment certificates in areas which are relevant for your industry, like:

  • electrical goods
  • electronic and radio equipment
  • machinery

This means that, under certain circumstances, a conformity assessment body in the EU can test EU products for export to Canada according to Canadian rules and vice versa. This will avoid both sides doing the same test and could greatly cut costs for both companies and consumers.

Under CETA, the EU and Canada will also set up a voluntary Regulatory Cooperation Forum. This Forum will:

  • facilitate the exchange of experiences and information between regulatory bodies,
  • help identify areas where regulators could work together
  • make suggestions to regulators and legislators

However, it should be noted that the regulatory cooperation will be voluntary. CETA will not in any way limit the capacity of each party to regulate its market as it chooses.  

In addition, CETA will also protect your investments in Canada. It establishes a new Investment Court System. This new court will be public and have its professional and independent judges appointed by the EU and Canada. The court will work transparently by opening up hearings to the public and be founded on highest ethical standards through a strict code of conduct.

In this sense, we could say that CETA is the most modern trade agreement ever negotiated by the European Union. Its general provisions reflect the strength and depth of the EU-Canada relationship and our strong commitment to free and fair trade, whose benefits will cover all sections of our societies.

Again, I’m very confident that your industry, which has a large industrial footprint in Europe and Canada will greatly benefit from it.

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CEMA Trade report Canada FINAL.pdf573.44 KB
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