Two years ago, the Comprehensive Economic and Trade Agreement (CETA) came into force. This treaty has eliminated nearly all tariffs between Canada and the European Union (EU) in order to increase the trade. Mario Nigro from Stikeman Elliott Toronto draws a completely positive result.
Mr. Nigro, free trade between Canada and Europe has been in force for more than 24 months – is this a success story?
Nigro: Yes – CETA has been a success. With almost all tariffs between Canada and the EU becoming duty-free, we have seen a noticeable increase in two-way goods and services trade. This has boosted job creation and exports in a number of European countries. There has been a similar effect on the Canadian economy with benefits stretching into Canada’s service economy. With bilateral merchandise trade up nearly double figures and plans to eliminate further tariff lines, CETA will continue to fuel trade.
But initially there was some skepticism regarding CETA…
Nigro: Initially there was skepticism about potential lowering of European regulatory standards in various sectors including food and health. In fact, CETA requires Canadian companies to conform to EU standards while trading in the EU.
Where exactly has trade expanded?
Nigro: In Canada we have seen many export sectors expand with industries like aluminum, motor vehicles, oils and fuels showing strong growth. In Europe, major export sectors such as machinery, pharmaceuticals and agricultural products have all performed well under CETA.
In which areas does CETA lead to opportunities for European companies in Canada and vice versa?
Nigro: CETA has facilitated foreign direct investment in Canada. We expect to see continued growth by EU companies investing into Canadian industries such as manufacturing, chemicals, food and agriculture. For example, the thresholds for acquisition review under the Investment Canada Act have been substantially increased and CETA provides robust investment protection and dispute resolution systems.
What can Europeans do when they want to bid on public procurement contracts – how can they participate?
Nigro: CETA has provided European companies access to Canada’s public procurement market. Prospective European companies should look at all levels of the Canadian governments (federal, provincial and municipal) for opportunities to bid for tenders. Participation has been simplified as Canada has increased transparency in the tendering process. EU companies, particularly smaller businesses, should take advantage of this access to information by following Canada’s public tenders market for new opportunities.
To what extent has CETA led to greater mobility for employees?
Nigro: The mutual recognition of professional qualifications under CETA has improved the recruitment ability of companies. European professionals can more easily work in Canada and vice versa. CETA has made transferring company staff and other professionals between their EU and Canadian locations easier. Further, the temporary entry provisions under CETA have improved labour mobility for a wide range of businesses.
In your view, what role does and will CETA play in light of the economic tensions between the U.S. and Europe?
Nigro: CETA is important for the EU because it represents the first trade deal between the EU and a major industrialized country based in North America. CETA serves as a bridge by allowing EU companies to trade in North America as investments into Canada provide opportunities to access the U.S. and Mexico through NAFTA.
