Planning for CETA: a checklist
by John Whitehead
This list of business processes outline what small and medium-sized operators should start tackling now in order to be in the best position to leverage CETA
If all goes according to plan, the Canada-Europe trade deal will likely come into force sometime in 2015. What will change when it does?
The closest reference point we have for the scale and impact of this trade deal is the North American Free Trade Agreement. Canada’s Trade Minister, Ed Fast, has described the Comprehensive Economic and Trade Agreement with the European Union as far Canada’s most ambitious trade initiative, broader in scope and deeper in ambition than NAFTA.
Specific manufacturing market changes will depend on your particular business. But, unless you’re in some very narrow sectors, you can start planning now on industrial goods tariffs being eliminated completely when the deal comes into force.
More than 99 per cent of tariffs on industrial goods will drop on “Day One.” Autos, ships and certain other goods tariffs will be subject to a phase in but for almost everybody else, tariffs will be gone immediately.
Just as important for many businesses, the agreement reduces a number of non-tariff barriers to trade. The deal includes binding provisions on licensing and qualification as well as the first regulatory cooperation chapter in any Canadian free trade agreement. For businesses that need to send specialists to support sales of products or equipment, or senior staff to support business operations on a temporary basis, both the EU and Canada will make “temporary entry” of intra-corporate transferees easier for companies.
In addition, CETA establishes a process for mutual recognition of qualifications (e.g. engineers, architects, medical professions) and builds on key provisions in the WTO Agreement on Technical Barriers to Trade. As well, the agreement establishes procedures through which Canada and the EU can request that each other’s technical regulations be considered as equivalent, allows people in either Canada or the EU to participate in public processes for the development of technical regulations and establishes a committee where trade irritants can be raised as they arise so Canada and the EU can work on resolving them as soon as possible. All of this is very progressive in trade terms and in the real world it means that Canadian exporters will have much, much easier access to the EU market. And of course, the reverse is true as well.
While an important agreement in principle has been achieved, final text is not yet available, so precise details remain pending. In its most basic terms, this is an agreement that seeks to remove government’s artificial impediments to trade to allow businesses to do what they do best – compete, innovate and drive efficiencies.
Overall, Canada believes this agreement will be net positive for our economy – the federal government estimates up to 80,000 net new Canadian jobs will be associated with the opportunities this agreement creates. The important word to note in that phrase is “net” new jobs; that means there will be winners and losers.
What should you be doing to turn up on the growth side of the ledger? Start considering the potential impacts and opportunities for your business. Consider the impact of tumbling tariff walls between Canada and the EU, but the non-tariff elements of the agreement could also be critical for many businesses. Getting familiar with those more detailed provisions as the final deal takes shape will position you to make the changes that will enable your business to compete here in Canada and in the EU.
John Whitehead leads the trade policy group for the Earnscliffe Strategy Group after more than 30 years in Ontario’s public service, a role that included representing Ontario’s trade policy interests. Email him at JWhitehead@earnscliffe.ca
