The EU recently concluded a new free trade deal with Canada – the Comprehensive Economic and Trade Agreement, or CETA for short. The deal will bring benefits for people and businesses across Europe. It will help to generate growth and jobs by:
- boosting exports
- lowering the cost of the inputs businesses need to make their products
- offering greater choice for consumers, and
- upholding the EU’s strict standards for products.
- Helping to generate growth and higher-paid jobs
CETA could help to boost growth and jobs across Europe. Other free trade deals that the EU has recently struck are doing exactly that. Take the one with South Korea, for example. In the four years after the agreement came into force, EU exports to South Korea rose fast – in goods by 55%, and in services by over 40%. Independent studies confirm that CETA could boost trade and investment even more.
What’s more, every €1 bn in exports from the EU supports on average around 14,000 jobs. And such jobs tend to be higher paid than ones which don’t rely on exports – up to 15% more for higher-skill ones.
- Creating a level playing field for European companies, big and small
Thanks to CETA, Canadian and EU businesses will now compete on a truly level playing-field. That will create a host of new opportunities on the Canadian market for EU companies, especially smaller ones with up to 250 employees, which together account for 99% of all companies in Europe. In fact, with CETA Canada has agreed to give EU companies better conditions for doing business than it gives to companies from other countries.
- Lowering prices and widening choice for Europe’s consumers
CETA will directly benefit Europe’s consumers. That’s because it will scrap or cut almost all the customs duties which EU importers have to pay on goods coming from Canada. And it will do so as soon as it comes into effect.
That should lead to:
- lower costs to businesses for the inputs they need to make their final products
- lower prices and a wider choice of goods and services for consumers across the EU.
- Cutting customs duties for exporters and importers
CETA will also save money for businesses across Europe. The cuts in customs duties which CETA will bring in could save European exporters hundreds of millions of euros each year.
Importers in Europe will benefit too, as the cost of parts, components and other
inputs they use to make their products falls. This will in turn create big opportunities for European firms, especially smaller ones, enabling them to grow and hire more staff.
- Cutting costs for EU businesses – without cutting corners on standards
CETA would help cut costs for EU firms that export to Canada, especially smaller ones, in another way, too. It involves so-called conformity assessment certificates. These prove that a product has been tested and meets:
- the relevant technical rules and regulations and
- any health, safety, consumer protection or environmental standards that also apply.
With CETA, the EU and Canada have now agreed to accept each other’s conformity assessment certificates for products ranging from electrical goods to toys. So, for example, an EU firm that wants to sell a toy in Canada will only need to get its product tested once, in Europe, where it can already obtain a certificate valid for Canada. That will save it time and money.
- Enabling EU firms to sell services in Canada
Services make up three-quarters of Europe’s economy. And EU companies are world leaders in many service industries. Thanks to CETA, they’ll soon have new opportunities and better conditions for doing business in Canada in areas like:
- professional services, such as accountancy and engineering
- environmental services, such as waste water treatment
- container shipping
- Allowing EU firms to bid for Canadian public contracts
With CETA, EU firms now have a better chance of competing for Canadian government contracts. Every year, Canada’s federal government, provinces and municipalities buy goods and services worth over €30 billion from private companies. They issue public contracts or tenders which companies then bid for. Canada will now open up more of these tenders to companies from the EU than to companies from any of its other trading partners.
EU firms will be able to bid to provide goods and services in many more public tenders issued by:
- the federal government
- Canada’s provinces and
- Canadian cities and towns.
EU firms are highly competitive in many areas which these tenders cover, such as building or upgrading roads, ports or other infrastructure.
What’s more, Canada’s provincial governments buy goods and services worth double what the federal government buys. And CETA means EU firms will now be able to bid for them. Canada has also pledged to make it easier to find out about its public contracts, by making them all available in one place online, like in the EU.
- Helping Europe’s rural communities market distinctive food and drinks
CETA will help food and drink producers across Europe, many of whom are based in small rural communities. That’s because Canada has agreed to protect over 140 European geographical indications, or GIs. These are names of high quality food and drink products linked to the regions where the products are made.
They help local producers to:
- market their products more effectively
- emphasise their distinctive nature, quality and heritage.
There are thousands of GI products in Europe, but only a few are exported overseas. The EU’s goal is to protect these from imitations. CETA will cover all kinds of products, from Roquefort and Gouda cheeses from France and the Netherlands, to Prosciutto di Parma ham from Italy. It will make sure only genuine products can be sold in Canada under those names. And it will strengthen border checks to stop fake food or drink products wrongly claiming to be from a particular EU region from being sold in Canada.
- Protecting Europe’s innovators and artists
CETA will help ensure that innovative companies, musicians and other people working in the creative industries are properly rewarded for their work.
Canada will do more to protect their research and creativity – also known as their intellectual property – by:
- aligning its rules with those of the EU in areas like patents, designs and copyright
- enforcing those rules more strongly. Canada will also strengthen its border checks to combat fake (counterfeit) or pirated goods.
- Recognising each other’s professional qualifications
CETA could pave the way for professionals from Europe to find new job opportunities in Canada. At the moment, Europeans working in regulated professions, such as architects, accountants and engineers, can’t practise in Canada because Canada doesn’t recognize their qualifications. The same is true in reverse for Canadians wanting to practice in the EU. CETA could change that. Both the EU and Canada have organisations which represent those professions, and CETA gives them a framework for negotiating agreements which would recognize each other’s qualifications. Then the authorities in Canada and the EU will take up these agreements and make them apply legally.
- Encouraging Canadian companies to invest more in Europe
Canadian companies already invest a lot in the EU – €14 billion in 2014 alone. That helps create jobs and growth. And when they decide to set up business in Europe, they often need to send over key staff, such as senior executives or technical experts, to help get things up and running.
CETA will encourage more job-creating investment in Europe by making it easier for Canadian firms to temporarily transfer their key staff to the EU. The same is true, of course, for EU firms setting up in Canada.
CETA will also make it easier for them to send key staff to Canada for a limited period. That in turn will help EU companies expand.
- Protecting people’s rights at work, and the environment
CETA is a truly progressive agreement. In it the EU and Canada have:
- reaffirmed commitments that they’ve already made to respect international rules on protecting people’s rights at work and environment and
- guaranteed to each other that they won’t go back on them.
CETA also gives a strong role to business associations, trade unions, environmental groups and other non-governmental organisations (NGOs) in both the EU and Canada in helping to put these commitments into practice.