E.U. Votes for Canada Trade Agreement

CETA

By MarEx 2017-02-15 18:28:59

On February 15, the European Parliament granted its final endorsement to the EU-Canada Free Trade Agreement (CETA), eight years after negotiations began. The landmark trade deal could apply provisionally from as early as April 2017.

CETA will remove tariffs on most traded goods and services. It also provides for the mutual recognition of certification for a wide range of products. Canada is to open up its federal and municipal public procurement markets, which are already open in Europe. E.U. suppliers of services ranging from sea shipping through telecoms and engineering to environmental services and accountancy will get access to the Canadian market.

The CETA deal will not remove tariff barriers in the fields of public services, audiovisual and transport services and a few agricultural products, such as dairy, poultry and eggs.

The CETA vote follows a long and difficult process, in which the Belgian region of Wallonia threatened to capsize the whole agreement. A majority of the European Parliament stuck with the view that CETA is the most modern and progressive trade agreement that the E.U. has ever negotiated, and thus voted in favor of the agreement.

The approval of CETA by the European Parliament provides a much needed victory for positive globalization and the wider E.U. trade policy, says Simon Bergulf, Director of E.U. Affairs at Danish Shipowners’ Association. He emphasizes that the agreement contains an ambitious maritime chapter that will ensure continued free and fair access for European
shipping companies to Canadian ports and present new opportunities for feeder and dredging services.

“Today’s vote comes at a crucial time for the E.U.’s trade relations as anti-globalization sentiments are gaining ground in the political debate in Europe. Furthermore, the shipping community stands to benefit from the agreement, as our members have maritime business in Canada worth roughly 350 million euro ($371 million). If trade in goods increases as we have seen in the aftermath of the free trade agreement with South Korea, this figure will grow considerably,” he said.

Discussions in the European Parliament have been intense, especially on the environmental chapter where some have voiced concerns that CETA would be an obstacle to retaining high European standards for environmental regulation. Proponents, on the other hand,  argue that it will not only help cement high European standards at a global level, but also display a continued commitment to a trade policy that is constructive and benefits both the E.U. and Canada. 

“CETA is not just a good agreement in itself. While previous trade agreements have been based on a positive list of topics to be included, this is the first European agreement based on a negative list. This means that all kinds of trade are part of the agreement, except those that are explicitly exempt. This fundamentally changes the approach of the E.U. to free trade and enables a far more ambitious text, creating more benefits for businesses and citizens in the E.U. and Canada” says Bergulf.

In 2015, E.U.-Canada trade accounted for more than €60 billion ($64 billion) and CETA is expected to boost this by 20 percent. If Canada were in the E.U., it would rank seventh in terms of population and fifth in terms of gross domestic product.

The E.U. members of parliament also gave their consent to the conclusion of an E.U.-Canada Strategic Partnership Agreement (SPA). Complementing the CETA, this deal aims to step up E.U.-Canada bilateral cooperation on a wide range of non-trade issues such as foreign and security policy, counter-terrorism, fighting organised crime, sustainable development, research and culture. The E.U.-Canada SPA was approved by 506 votes to 142, with 43 abstentions.