© Patrick Leblond. 6 May 2014

Economic & Political Implications of CETA

Patrick Leblond

ECSA-C Business RoundtableECSA-C Biennial Conference

Montreal, 8 May 2014

© Patrick Leblond. 6 May 2014

Joint Study (Oct. 2008) Results

• Jump in GDP – €11.6 billion in the EU (0.08% of GDP)– €8.2 billion in Canada (0.77% of GDP)

• Increase in trade (€25.7 billion or 22.9%)– Goods (€18.6 billion)

• Canada to EU: €6.3 billion (24.3%)• EU to Canada: €12.2 billion (36.6%)

– Services (€7.0 billion)• Canada to EU: €4.8 billion (14.2%)• EU to Canada: €2.2 billion (13.1%)

© Patrick Leblond. 6 May 2014

What are the key drivers?

• Tariff elimination– Goods will be more competitive on the EU market– EU goods will be cheaper for Canadian firms

• Greater market access– E.g., beef and pork– Subnational public procurement

• New investments– Canadian, European and third-country firms

• Labour (skilled) mobility– Important for professional and after-sale services

• Regulatory cooperation and mutual recognition

© Patrick Leblond. 6 May 2014

Conditions

• Canadian firms must meet EU standards for goods and services and vice versa

• Effective and efficient rules of origin• Provincial and municipal implementation of public

procurement rules• Agreement on the MR of professional qualifications

– Provinces and provincial orders• Obtain necessary working permits rapidly• Cooperation between regulators in trying to

harmonize new rules and regulations• SME capacity to develop the other market

© Patrick Leblond. 6 May 2014

Conclusions

• Who knows exactly what the economic implications will be?– We do know that trade liberalization increases trade and

ultimately GDP• Benefits might be relatively “marginal” but as long as they are

positive on a net basis, then we should do it– Why would we give up a potential of $10-20 billion more

for the Canadian economy?• But many benefits will take time to materialize, if they ever do

(“walk the talk”)– Pressure and monitoring from business and political leaders

will be key to ensure that many conditions are satisfied• Not doing CETA might make things worse if the EU and the US

manage to agree to a TTIP

© Patrick Leblond. 6 May 2014

THANK YOU!