Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

CETA: opportunities for the railway sector

17. 1. 2018

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

Content

1. What is CETA?

2. CETA and Czech Republic

3. Changes brought to the railway sector

A.Trade in goods

B.Trade in services

C. Mobility issues

D.Public procurement

4. Information resources

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

What is CETA?

CETA = Comprehensive Economic and Trade Agreement between EU and Canada

Modern set of ambitious and complex rules for EU-Canada trade

Coverage: goods (tariffs, rules of origin, TBT), services, mobility, public procurement

Provisionally applicable since 21st September 2017 for more than 95 % of CETA provisions

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

CETA and the Czech RepublicCETA was ratified by the Czech Republic on 11th October

2017 (notified on 16th November) - 6th MS to ratify

Impact study on effects of CETA on the Czech economy has been conducted by the Technical University in Liberec

Estimated impact:

positive effects

+ 0,0052/0,0072 predicted GDP growth

6,3/7,7 mil. USD welfare benefits

103 and 77/109 mil. CZK of tariff and non-tariff savings

overall rise in Czech exports by up to 23 %

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

Railway sectorCalculated export benefits according to the impact assessment study:

Benefit across the whole agreement

A. Trade in goods

B. Trade in services

C. Mobility issues

D. Public procurement

Subsector Entry into force After 7 years

Metal products + 34,4 % + 43,5 %

Transport equipment + 39,9 % + 47,1 %

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

Trade in goods = preferential access for goods

Benefits presented for these products: Railway/tramway tracks (HS 7302), Metal parts and structures (windows, doors, HS 7308), Screws, bolts, nuts, coach screws and hooks (HS 7318), Engines (HS 8407, 8408, HS 8501-04, HS 8507), Locomotives and rolling-stock and parts (HS 86), Seats (HS 9401)

Tariffs

in general 99 % of tariffs for industrial goods were eliminated, for railway goods tariffs were eliminated at entry into force of CETA

Particular changes:

HS Type of good Tariff change

8507 Electric accumulators 0/7 to 0 %

8601 Electric rail locomotives9,5 to 0 %

8602 Other rail locomotives 9,5 to 0 %

8603 Self-propelled railway or tramway coaches, vans and trucks, 8 to 0 %

8604 Railway or tramway maintenance or service vehicles 0/6 to 0 %

8605Railway or tramway passenger coaches, luggage vans, post office coaches and other special purpose railway or tramway coaches

11 to 0 %

8606 Railway or tramway goods vans and wagons 11 to 0 %

8607 Parts of railway or tramway locomotives or rolling stock: 0-11 to 0 %

8608 Railway or tramway track fixtures and fittings 0/6,5 to 0 %

8609 Containers 0/6,5 to 0 %

9401 Seats 0/9,5 to 0 %

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

Trade in goods = preferential access for goods (2)

Benefits presented for these products: Railway/tramway tracks (HS 7302), Metal parts and structures (windows, doors, HS 7308), Screws, bolts, nuts, coach screws and hooks (HS 7318), Engines (HS 8407, 8408, HS 8501-04, HS 8507), Locomotives and rolling-stock and parts (HS 86), Seats (HS 9401)

Rules of origin

Obligatory declaration of origin in line with Protocol on on rules of origin and origin procedures

Obligation to be a Registered Exporter (REX system) to declare origin for goods of value higher than 6000 EUR

Product specific rules used:

Change of tariff heading

OR for some items

max. 50 % of on-origin materials (calculated from the final product price)

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

Trade in goods - technical barriers

CETA deals not only with tariff but also non-tariff issues by:

Incorporating provisions of the WTO TBT agreement

Including Protocole on mutual acceptance of the results of conformity assessment

Protocol provides for two phases of implementation:

Phase I – Conformity assessment bodies (CABs) can gain accreditaion by the otherParty to preform test and assessments

Phase II – Through cooperation of regulators and accreditation bodies results of CABswill be accepted where accreditation (goals and conditions) for CAB is found to becomparable

Relevant sectors of the Protocol (Annex I):

Electrical and electronic equipment, including electrical installations and appliances, and related components;

Electromagnetic compatibility (EMC);

Construction products;

Machinery, including parts, components, including safety components, interchangeable equipment, and assemblies of machines;

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

Trade in services and investment

Secures undisriminatory treatment with service providers and investors based on national treatment

Reservation to the general commitments are in Annex I basedusually on legal regulation (examples of reservations in AnnexI):

Passenger and freight transportation by road, including courier services

Other transport services – entry into market may require approval by ministeror governer

Systems of passenger transport – possibility of limitation of entry into market

Railroad transportation services in Newfoundland and Labrador– person looking to purchase, operate or construct a rail service within the Province must first obtain Provincial approval

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

Mobility issues

Chapter 10 of CETA including annexes that can modify commitments

Types of mobility:

Contractual service suppliers and independent professionals

Up to 12 months

Highly-educated, with considerable experience

National rules, which differ per MS

Short-term business visitors

Up to 90 days in any 6 month period

covering an extensive list of activities (Annex 10-D)

Business visitors for establishment purposes

Up to 90 days in any 6 month period

without the need of a work permit

Investors

Up to 1 year

Intra-corporate transferees

Managers, specialists (3 years); trainees (1 year)

Canadian implementing rules: https://www.canada.ca/en/immigration-refugees-citizenship/corporate/publications-manuals/operational-bulletins-manuals/temporary-residents/foreign-workers/international-free-trade-agreements/canada-eu.html#wb-cont

https://www.canada.ca/en/immigration-refugees-citizenship/corporate/publications-manuals/operational-bulletins-manuals/temporary-residents/foreign-workers/international-free-trade-agreements/canada-eu.html#wb-cont

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

Public procurement thresholds

Entity levelGoods

(SDR/ ths. CZK)

Services(SDR/ ths.

CZK)

Construction works

(SDR/ ths. CZK)

Centralgovernment

130.0004380

130.0004380

5.000.000168 496

Sub-centralgovernment

200.0006740

200.0006740

5.000.000168 496

Other entities(incl. Crown

corporations)

355 00010 695

355 00010 695

5.000.000168 496

Entitiesoperatingnetworks

including railtransport

400.00013 480

400.00013 480

5.000.000168 496

Public procurement

Unprecedented access to Canadian market

Relevant entities included:

Federal: Department of Transport, Canadian Transportation Agency, Economic Development Agency of Canada for the Regions of Quebec, Federal Economic Development Agency for Southern Ontario

Subfederal (selected): all entities for Alberta, British Columbia, Manitoba, New Brunsvik Transportation, Ontario, Quebec, Saskatchewan,

Excluded at subfederal: Ontario Infrastructure and Lands Corporation

Other selected): all entities for Alberta, British Columbia, Ontario, Quebec, Saskatchewan.

Special rules for procurement of mass transit vehicles forOntario and Québec

Possible requirement to contract up to 25 per cent of the contract value in Canada

Value definition: eligible costs in the procurement of mass transit vehicles for components, sub-components and raw materials produced in Canada, including labour or other related service and final assembly.

Final assembly may be required in Canada

Services included: Engineering services, Integrated engineering services (excluding Integrated engineering services for transportation infrastructure turnkey projects)

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

For further information on CETA

Czech Government

www.businessinfo.cz/CETA (in Czech only)

Contact form is available for direct questions

European Commission:

http://ec.europa.eu/trade/policy/in-focus/ceta/

Canada Global Affairs:

http://www.international.gc.ca/gac-amc/campaign-campagne/ceta-aecg/index.aspx?lang=eng

http://www.businessinfo.cz/CETAhttp://ec.europa.eu/trade/policy/in-focus/ceta/http://www.international.gc.ca/gac-amc/campaign-campagne/ceta-aecg/index.aspx?lang=eng

Matyáš Pelant

Americas Unit

CETA: opportunities for the

railway sector

Thank you for attention!

Matyáš Pelant, Head of Americas Unit, Foreign Economic Policies Department II, Foreign Trade Sectionpelant@mpo.cz

mailto:pelant@mpo.cz