It’s been few weeks that the international newspapers have mentioned and discussed the agreement between Canada and the EU: “Comprehensive Economic and Trade Agreement” (CETA). Let’s see the details in this article.
CETA is important because it could be also the predecessor of a more important and complex agreement (in terms of value and regulation), which is under study and negotiation between the US and EU, the Transatlantic Trade and Investment Partnership (TTIP).
CETA was concluded in August 2014 and in July 2016, the European Commission has formally proposed the signing and conclusion of the agreement to the European Council. The process requires that after the approval of the European Council, this will come into force temporarily. To get the final approval, and be valid permanently, the proposal must have the consent of the European Parliament and ratified by all EU member states.
Specifically, let’s see the content of this agreement (source: European Commission http://ec.europa.eu/trade/policy/in-focus/ceta/index_en.htm):
- Sustain the economic growth and, therefore, employment. It is believed this possible because four years after the agreement with the Republic of Korea, European exports to South Korea grew by 55% for goods and 40% for services. It is estimated that every billion euro of exports creates 14,000 jobs and increases the salary of that specific sector of export.
- There will be no duties on exports and this means a saving of € 600 million a year for EU companies. The products that will benefit the most will be those agricultural and industrial.
- Participation in public tenders at all levels for European companies. To date, this market is 30 billion euro. This opportunity is only given to European companies, in fact there are no other international companies that can join.
- It will create a forum for cooperation and regulatory control between the two parties. The objective is to suggest regulatory measures to improve cooperation. Most important, specific goods such as: electrical equipment, toys, industrial machines and measurement equipment must comply with both parties’ regulations. This means that a European body will test the goods mentioned above to assess the conformity of the supplied market. Special attention is given to the food market and the environment. The Canadian products may be imported and sold in Europe only if they comply with European rules, so they can not contain growth hormones or GMOs. The high quality standard European products, however, will find more opportunities and be more competitive in Canada, which is a country with high wages and which seeking the European quality.
- Protection and preservation of European innovations, artistic and traditional products. Canada will align copyright protection to the world organization rules of intellectual property.
- Canada reduces or cancels barriers also for European services, in particular financial services, telecommunications, energy and maritime transport.
- The agreement promotes and protects investments. Investors of the two blocks will be protected and will have the same legal and economic treatment and shall enjoy the same rights in whatever country they are. Therefore, this agreement is to eliminate any origin discrimination.
CETA supports democracy, public health, safety and the environment. CETA will not affect in any way the right of countries to govern themselves for the public interest.
After NAFTA, for Canada this agreement is the most important they will have. They became favorable to this agreement with Europe, following a careful assessment of the benefits that may result. The deal is done to create economic growth and protection of public interests, environmental and public health.
Private interests in public areas are excluded. For example, if a country wants keep the monopoly of water supply, oil, telecommunications etc, it is free to do so.
Based on official documents available, this agreement is signed in the best intentions to free trade and, therefore, in the interests of the companies. I remember that also the European Economic Community (EEC) was created for the same goals in 1957, and in 1993 the states decided for a stronger integration with creation of a Union of States. This integration created a new supranational administration and a single currency.
Based on the history above, probably it will not surprise if this is the beginning of a Euro – Canadian Union.