Canada-EU Trade Agreement Ratification: What Does it Mean for Businesses?
The Canada-European Union Comprehensive Economic and Trade Agreement, better known as CETA, is a trade agreement aimed at removing barriers to trade and improving economic relations between Canada and the European Union. After years of negotiations, the agreement was signed by Canadian and EU leaders on October 30, 2016. However, its path to ratification has been a bumpy one.
The purpose of CETA is to create a free trade zone between Canada and the 28 countries of the EU, covering a market of over 500 million people and generating annual trade of more than $100 billion. The agreement is expected to increase two-way trade in goods and services by 20%, creating jobs and economic growth on both sides of the Atlantic.
CETA eliminates tariffs on most goods traded between Canada and the EU, reduces restrictions on investment, and opens up public procurement markets. It also includes provisions on intellectual property protection, regulatory cooperation, and sustainable development. The agreement has been hailed as a step forward in trade liberalization and a model for future trade agreements.
However, CETA has faced opposition from some groups, including labor unions, environmentalists, and consumer advocates. Critics argue that the agreement will lead to job losses, weaken environmental and public health standards, and undermine the sovereignty of governments to regulate in the public interest. They also point to the controversial investor-state dispute settlement mechanism, which allows foreign investors to sue governments for compensation if their investments are treated unfairly.
Despite these concerns, CETA was approved by the European Parliament in February 2017 and provisionally entered into force on September 21, 2017. However, the agreement must still be ratified by all 28 EU member states before it can be fully implemented.
So far, 14 EU member states have ratified CETA, including Germany, France, and Spain. However, some countries, such as Belgium and Bulgaria, have faced domestic opposition to the agreement and have not yet ratified it. In Canada, CETA has been ratified by the federal government and is now in force.
For businesses, CETA offers numerous opportunities to expand into new markets and increase competitiveness. Tariff reductions and regulatory cooperation will make it easier to trade goods and services between Canada and the EU, and access to public procurement markets will create new opportunities for government contracts. The agreement also includes provisions to protect intellectual property, which can benefit companies in industries such as pharmaceuticals and technology.
In conclusion, the ratification of CETA marks a significant milestone in trade relations between Canada and the EU. While the agreement has faced opposition from some quarters, it offers businesses numerous opportunities to expand into new markets and increase competitiveness. As CETA continues to be ratified by EU member states, businesses must be prepared to take advantage of its benefits and navigate its complexities.