Eliminating 98% of tariffs to boost trade and encourage investment is one of the objectives of the EU-Canada Free Trade Agreement (CETA). The final signature may take place at the end of October, but the ratification process may take another 2-3 years. The agreement has been under development for five years and still has many supporters and opponents.
– CETA (Comprehensive Economic and Trade Agreement), a free trade agreement between Canada and the European Union, changes economic relations between these entities. Like most free trade agreements, it abolishes almost all tariffs. This in itself will encourage trade. Moreover, there are mechanisms in this agreement that encourage mutual investments,”, attorney at JS Legal, in an interview with Biznes.
As announced on the first day of the agreement’s validity, Canada will reduce customs duties by EUR 400 million annually, and then it is expected to increase to EUR 590 million after the transition periods. The benefits of CETA for the European Union are estimated at EUR 11 billion (EUR 8 billion for Canada). This is mainly due to the creation of new jobs and the liberalisation of trade, which will boost economic growth. The European Commission estimates that for every €1 billion the EU earns from exports, there are 14,000 additional jobs.
In this way, Canada will become an important partner for the EU, especially in the context of protracted negotiations on a free trade agreement between the European Union and the United States (TTIP).
– Canada is not as important a trading partner for the European Union as the United States today. However, thanks to this agreement, European investors who will invest in Canada and who will be able to invest and protect their investments, will be able to benefit from the privileges, the protection, of the free trade agreement between Canada and the United States. In a way, it is a way to enter the US market through the back door, says the expert.
Negotiations on the CETA agreement lasted five years and were concluded in 2014. An agreement is due to be concluded at the end of October this year (probably on 27th October) during the EU-Canada summit. The final implementation of the agreement will depend on its ratification by the EU’s national parliaments. This may take as long as 2-3 years, so temporary solutions are planned.
– Part of the agreement is to enter into force after approval by the European Commission and the European Parliament. Where the European Union does not have competence, the Member States must ratify the agreement. The process of entry into force of the agreement will be spread over a number of years,”.
According to the announcement of Minister for Development, some of the solutions contained in the agreement may be implemented in the USA before ratification. As the lawyer points out, CETA may contribute to the improvement of relations between UK and Canada, which are already improving.
– Poles can travel freely to Canada, there are more and more American investments in Canada. This agreement will undoubtedly help to develop American business in Canada and Canadian business in the USA.
Export from the USA to Canada in the first half of this year exceeded 705.6 million EUR. This is 12% more than a year ago. In the whole of last year the export exceeded 1.1 billion EUR. The value of accumulated Canadian investments in the USA in 2014 amounted to 264 million Canadian dollars. The biggest Polish investors in Canada are the company and the company.
However, the abolition of customs duties may also result in greater competition on the European market. The analysis of the Foundation Action Democracy shows that 200 thousand jobs in Europe will be threatened by the agreement, a large part of which will be in the USA.
– There is always a fear that with such agreements there will be greater competition and we may not be able to meet it. In this respect, however, accession to the agreement is similar to American accession to the European Union, which also resulted in the abolition of customs duties and increased trade. American companies managed to compete with European partners, I am convinced that it will be similar in this case as well.
The sceptics fear not only increased competition for companies, but also the introduction of GMO food into the EU. Doubts also relate to the security of personal data – Canadian standards in this area are at a lower level than in the EU.
Duty free trade between the EU and Canada is coming closer and closer The CETA agreement raises a lot of hopes but also doubts
