WHAT IS CETA AND WHAT DOES IT MEAN TO CANADABY: PAUL YOUNG, CPA, CGADATE: NOVEMBER 10, 2016

AGENDA

• What is CETA?• Canada Trade with Europe• Key Quotes/Comments on CETA

WHAT IS CETA?• The Comprehensive Economic and Trade Agreement (CETA) is a recently signed free-trade agreement between 

Canada and the European Union.[1][2] When implemented, the agreement will eliminate 98% of the tariffs between Canada and the EU.

• The negotiations were concluded in August 2014. All 28 European Union nations have approved CETA with Belgium being the final country to approve.[3] Currently CETA is awaiting signing. The European Council has confirmed it has adopted the decision to sign.[4] Justin Trudeau, Prime Minister of Canada traveled to Brussels on 30 October 2016 to sign on behalf of Canada.[5]

• The EU claims the treaty will lead to savings of just over half a billion euros in taxes for EU exporters every year, mutual recognition in regulated professions such as architects, accountants and engineers, and easier transfers of company staff and other professionals between the EU and Canada. The European Commission claims CETA will create a more level playing field between Canada and the EU on intellectual property rights.[6]

• Critics oppose the treaty on the grounds that it will weaken European consumer rights, including those concerning food safety, and that tariffs are already very low.[7] It has also been criticized as a boon only for big business and multinational corporations, while risking net-losses, unemployment, and environmental damage impacting individual citizens.[8][9] The deal also includes a controversial investor-state dispute settlement mechanism. The agreement has prompted protests in Europe and Canada.[10]

Source - http://waronwant.org/what-ceta and https://en.wikipedia.org/wiki/Comprehensive_Economic_and_Trade_Agreement

TRADE AND CANADA• Canada needs to exports in order for Canadian businesses to

access new markets.

Source – Stats Canada

CETA AND CANADA

CANADA TRADE WITH EUROPE

Source - http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113363.pdf

CANADA TRADE WITH EUROPE

Source - http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113363.pdf

COMMENTS / CETA• Chamber of Commerce – Source -

http://www.chamber.ca/media/news-releases/160229-canadian-chamber-congratulates-government-on-moving-ceta-towards-ratification/ - Key Quote “The CETA agreement will be a critical achievement when it’s ratified, giving Canada excellent access to a massive market of over 500 million people,” said the Hon. Perrin Beatty, President and CEO of the Canadian Chamber of Commerce. “Completing the legal agreement is a major step towards closing the deal.” Today’s announcement also signifies an agreement has been reached on the important issue of investor-state dispute settlement (ISDS). The new form of ISDS will ensure governments do not discriminate against foreign investors, while maintaining the independence to adopt new laws and regulations in areas like the environment, labour rules and health standards.”

• Canadian Manufacturing Association – Source - http://www.canplastics.com/economy/manufacturing-associations-praise-new-canada-eu-trade-agreement/1002668180/ - Key Quote – “The Conservative government says the deal will provide a $12 billion boost to the Canadian economy and create 80,000 new jobs; and industry leaders predict Canadian firms will take full advantage of what amounts to the dismantling of barriers – both tariffs and stifling rules and regulations – that have helped keep trade between the two entities relatively modest. On the automotive side of the CETA pact, the EU will phase out its 10 per cent tariff on imports, and Canadian automakers will be able to ship as many as 100,000 duty-free vehicles, up from the current 8,000, under relaxed rules-of-origin requirements – developments that drew praise from the Automotive Parts Manufacturers Association (APMA). “Canada’s automotive sector is a net exporter of products and services for the global automotive industry and stands to benefit from a Canada – EU free trade agreement,” said APMA president Steve Rodgers. “We view this agreement as very positive for Canada’s position in the global automotive industry and applaud our government.”

COMMENTS / CETA• Unifor – Source -

http://www.unifor.org/en/whats-new/news/unifor-calls-release-ceta-details-warns-repercussions-key-economic-sectors - Key Quote ““Much the same is true in forestry. Canada already has tariff-free status for our main exports of cut lumber and newsprint, and there are limited markets for the plywood and oriented strand board where tariffs will be cut. We import, however, 10 times the amount of furniture from Europe as we sell them.” “We mostly sell Europe raw materials. And they mostly sell us high-value, manufactured goods. We have a nearly 30 billion dollar manufacturing trade deficit with Europe.  And that deficit will likely expand, not shrink, under a free trade pact,” Dias told the committee.”

• Canada Forestry Sector – Source -http://politheor.net/positive-implications-of-ceta-on-the-wood-industry-sector-in-the-eu-and-canada/ - Key Quote “When thinking about Canada most of us would probably think about vast forest landscapes, right? Indeed, almost 9% of the world’s forests is growing in Canada! Obviously, forestry and wood industry are essential contributors to the national economy, as a matter of fact, Canada has the world’s largest forest product trade balance – 19.3 billion dollars. On the other side, EU numbers are slightly lower. In terms of the world’s forests EU accounts for 5% and the size and productivity of forestry-related industries is diverse, being the leaders in this field Finland and Sweden. It is clear that the business without tariffs, as imposed by CETA, would certainly facilitate trade by reducing the costs for companies on both sides of the Atlantic. Moreover, this could be a good opportunity for companies of all sizes to enter the market in an easier way and start their businesses across the ocean, but it would be especially beneficial for small and medium-sized manufacturers.

•

ISSUES FOR CANADA

• Port capacity• Pipelines• Lawsuits• All trade deals include the ability to sue

• How do you mitigate lawsuits• All government need to reduce the red tape as part of supporting Foreign

Direct Investment

SUMMARY• CETA -

http://www.cbc.ca/news/politics/canada-europe-trade-signing-sunday-1.3827903 • What’s next

• It will take time to bring down tariffs as part of flow of goods• Who will see the benefits?

• Exports could grow by $12B. For each $1B of exports there could 5,500 jobs. • Biggest winner will be manufactured goods -

http://www.inews880.com/syn/110/131652/alberta-would-benefit-from-new-eu-trade-deal

COMPENSATION / DAIRY INDUSTRY• Harper “In October 2015, the Conservatives promised Canadian dairy, egg and poultry farmers

$4.3 billion in compensation over 15-years funding, to cover concessions made on supply management under CETA and the Trans Pacific Partnership.: – Source - http://ipolitics.ca/2016/05/02/dairy-industry-government-to-meet-on-ceta-compensation/• Freeland “Under the pair of initiatives, the government will set aside $250 million over five years

to support new technologies, such as robotic milkers and automated feeding systems, on dairy farms. It will also invest $100 million to help dairy processors modernize the equipment in their plants. - http://www.canadianmanufacturing.com/financing/preparing-for-ceta-fallout-feds-pump-350m-into-dairy-industry-178682/

• Summary:• Harper had promised approximately $286M/year for 15 years. • Liberals promised only $250M?

• So, why was this ignored in the post?