Trudeau – Tusk – Photo EU Council
(BRUSSELS) – The Comprehensive Economic and Trade Agreement between the EU and Canada (CETA), which aims to boost goods and services trade and investment flows, entered into force provisionally Thursday.
The provisional application of CETA follows its approval by EU Member States. It will however only enter into force fully and definitively when all EU Member States have ratified the Agreement.
CETA removes tariffs on most traded goods and services. It also provides for the mutual recognition of certification for a wide range of products. Canada is to open up its federal and municipal public procurement markets, which are already open in Europe. EU suppliers of services ranging from sea shipping through telecoms and engineering to environmental services and accountancy will get access to the Canadian market.
EU Commission president Jean-Claude Juncker said that despite widespread concerns, CETA was subject to in-depth parliamentary scrutiny, and “it’s time for our companies and citizens to make the most out of this opportunity and for everyone to see how our trade policy can produce tangible benefits for everyone”.
The EU executive estimates CETA will save EU businesses EUR 590 million a year the amount they pay in tariffs on goods exported to Canada. As of 21 September CETA removes duties on 98% of products (tariff lines) that the EU trades with Canada. It also gives EU companies the best access ever offered to companies from outside Canada to bid on the country’s public procurement contracts.
The agreement affords better opportunities to smaller companies who are put off by the costs of the red tape involved in exporting to Canada. They will be able to avoid duplicative product testing requirements, lengthy customs procedures and costly legal fees.
Particular concern has come from the farming sector. The Commission says CETA fully protects the EU’s sensitive sectors, and creates new opportunities for European farmers and food producers.
But the EU has opened its market for some competing Canadian products, if in ‘a limited and calibrated way’, while securing improved access to the Canadian market for important European export products. Those include cheese, wine and spirits, fruit and vegetables, and processed products. CETA will also protect 143 EU “geographical indications” in Canada, high quality regional food and drink products.
EU Member States can continue to organise public services as they wish. A Joint Interpretative Instrument, which has legal force, clarifies this and other issues.
The EU and Canada signed CETA on 30 October 2016, following the EU Member States’ approval expressed in the Council. On 15 February the European Parliament gave also its consent. On 16 May 2017 the Canadian side ratified CETA. This paved the way for provisional application as soon as Canada adopted all the necessary implementing rules.
CETA will be fully implemented once all EU Member States ratify the deal according to their respective constitutional requirements. At the time CETA will take full effect, a new and improved Investment Court System will replace the current investor-state dispute settlement (ISDS) mechanism that exists in many bilateral trade agreements negotiated in the past by EU Member States’ governments.
