Canada-European Union (EU)

Comprehensive Economic and Trade Agreement (CETA)

Canada-European Union (EU)

Comprehensive Economic and Trade Agreement (CETA)

September 9, 2014

2

Timelines

CETA Agreement• Agreement in Principle – October 18, 2013• Completion of negotiations announced August 5, 2014

Final Agreement• Canada-EU Summit – anticipated for September 2014

Entry into Force• Ratification required for Canada and European Union• Provinces-Territories and EU Member States reviewing• Legal review + translation (23 languages)• Anticipate entry into force within 2 years

• Spring or Summer of 2016

3

EU Overview

28 Member States

510 million people

$17 trillion in GDP

• Germany, France, UK, Italy

EU indicating CETA boost trade by 23% (~37Bn CND)

• Canada forecasting $12 billion boost to GDP --- low estimate

4

Economies By GDP (Trillions $CDN)

Canada will have bilateral trade agreements with 2 largest economies.

Plus, in negotiations or discussions with Japan and China

1)European Union:: CETA - Agreement in Principle

2)United States : NAFTA; TPP (negotiating)

3)Japan: EPA (negotiating); TPP (negotiating)

(1)(2)

(3)

5

Areas Under Provincial Jurisdiction

Government Procurement

Services

Investment

Technical Barriers to Trade & Regulatory Cooperation

Environment

Labour

Examples of other areas of interest under Federal Jurisdiction:• Goods / Market Access / Tariffs; Subsidies; Financial Services;

Intellectual Property; Rules of Origin; Wines/Spirits; Temporary Entry

6

PEI-EU Trade

Total exports to EU = >$80 million / year• France, UK, Germany account for ~ 60%• Top Export Products: Fish/Seafood (Lobster), Bioscience, Aerospace

PEI Exports to European Union ($Millions Cdn)

Witnessing 5 yr growth in

exports to EU.

Diversification of exports

7

CETA Benefits

TARIFF PACKAGE: 98% immediately; 99% 7 years

Agriculture: 93.6% of tariff lines at 0% immediately

• 95% + of tariffs will be duty-free after 7 years

Fish / Seafood: 95.5% of tariff lines at 0% immediately

• 100% of tariffs at 0% no later than 7 years

Industrial Products: 99.3% of tariffs at 0% immediately

• 100% of tariffs at 0% no later than 7 years

8

Agriculture & Agri-Food

Immediate tariff elimination• Frozen potato: range from 14.4% to 17.6%• Fresh/frozen fruits:

• Blueberries – up to 14.4% • Apples – 9%• Cherries – 12%

• Processed products:• Oils – including canola 3.2% to 9.6%• Miscellaneous food prep: start at 12.8%• Processed pulses/grains; confectionary, etc

– Start at 7.7%

Beef and Pork access: transitional quota• Beef: 50k tonnes – 35k fresh; 15k frozen

• Pork: 75k tonnes

• Duty-free in-quota access

9

Agriculture and Agri-Food

Supply-Managed Industries remain intact• No reduction in over-quota tariffs

• Poultry and eggs excluded

• Quota: 17,700 tonnes of cheese

Geographical Indications:• Protection for 180 products --- meats, cheese

• Feta, Asiago, Munster, Gorgonzola, Fontina • Grandfather clause for existing producers in Canada

10

Processed Food

Favourable Rules of Origin• Allows Canadian products to qualify for tariff elimination

• Recognizes global value chains

• Encourages use of Canadian inputs

Derogations (more liberal for high use of imported goods)• Processed foods: baked goods, rice, cereals – 35k tonnes

• High sugar containing: drink mixes, etc – 30k growing to 50k tonnes

• Chocolate and confectionary: chocolate prep – 10k tonnes

• Cat and dog food: 60k tonnes

Quota volumes at 3 times current trade

Review every 5 years

11

Fish & Seafood

FISH PACKAGE: 95.5% of all tariffs at 0% - entry into force

• 100% of tariffs at 0 after 7 years

Immediate tariff elimination• Live lobster: rates of 8%

• Oysters: rates of 0 to 9%,

• Most other species (ex. Scallops, shrimp): from 5.5% - 20%

Phased-out tariffs• Frozen lobster: 6% and 16% - 3yr & 5yr

• Mussels: 20% - 7 yrs

Transitional quotas (TRQ) – shrimp and cod

12

Industrial Goods

99.3% of tariff lines at 0% – entry into force

Immediate tariff elimination• Chemicals: average rates of 5%• Forestry products: range from 0% - 10%

Autos: range from 3% - 22%• 3, 5, and 7 year phase-outs• Origin quota of 100k vehicles --- currently exporting 10k• US-EU provisions

Canada has transition periods • Ships (3 and 7 years)• Autos (3, 5, and 7 years)

13

Other Benefits

GOVERNMENT PROCUREMENT• Access to $2.7 trillion procurement market

• Broad coverage of goods, services and construction

Services• Broad coverage – most ambitious offer by EU in FTA

• Professional services: legal, architectural, engineering, urban planning

• Environmental, ICT, R&D, etc

14

Key Sources of Information

Overview of CETA Agreement

http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/index.aspx?lang=eng

CETA – Technical Summary

http://international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/understanding-comprendre/technical-technique.aspx?lang=eng

CETA Benefits for Prince Edward Island

http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/benefits-avantages/pei-ipe.aspx?lang=eng