Comprehensive Economic and Trade Agreement

The Comprehensive Economic and Trade Agreement (CETA) is a proposed free trade agreement between Canada and the European Union.^{[1] [2]}

CETA is Canada's biggest bilateral initiative since NAFTA. It was hatched as a result of a joint study "Assessing the Costs and Benefits of a Closer EU-Canada Economic Partnership"^[3] which was released in October of 2008. Officials announced the launch of negotiations on May 6, 2009 at the Canada-EU Summit in Prague.^[2] This after the Canada-EU Summit in Ottawa on March 18, 2004 where leaders agreed to a framework for a new Canada-EU Trade and Investment Enhancement Agreement (TIEA). The TIEA was intended to move beyond traditional market access issues, to include areas such as trade and investment facilitation, competition, mutual recognition of professional qualifications, financial services, e-commerce, temporary entry, small- and medium-sized enterprises, sustainable development, and sharing science and technology. The TIEA was also to build on a Canada-EU regulatory cooperation framework for promoting bilateral cooperation on approaches to regulatory governance, advancing good regulatory practices and facilitating trade and investment. In addition to lowering barriers, the TIEA was meant to heighten Canadian and European interest in each other’s markets.^[4] The TIEA continued until 2006 when Canada and the EU decided to pause negotiations. This led to negotiations on a Comprehensive Economic and Trade Agreement (CETA), and this agreement will go beyond the TIEA toward an agreement with a much broader and more ambitious scope.

The EU-Canada Trade Sustainability Impact Assessment (SIA), a three-part study commissioned by the European Commission to independent experts and completed in September 2011, provides a comprehensive prediction on the impacts of CETA.^{[5] [6] [7]} It predicts a number of macro-economic and sector-specific impacts, suggesting the EU may see increases in real GDP of 0.02-0.03% in the long-term from CETA, whereas Canada may see increases of 0.18-0.36%; the Investment section of the report suggests these numbers could be higher when factoring in investment increases. At the sectoral level, the study predicts the greatest gains in output and trade to be stimulated by services liberalization and by the removal of tariffs applied on sensitive agricultural products; it also suggests CETA could have a positive social impact if it includes provisions on the ILO’s Core Labour Standards and Decent Work Agenda. The study details a variety of impacts in various “cross-cutting” components of CETA: it advocates against controversial NAFTA-style ISDS provisions; predicts potentially imbalanced benefits from a government procurement (GP) chapter; assumes CETA will lead to an upward harmonization in IPR regulations, particularly changing Canadian IPR laws; and predicts impacts in terms of competition policy and several other areas.^[8]

Canada and the EU have a long history of economic cooperation. Comprising 27 Member States with a total population of nearly 500 million and a GDP of over C$19 trillion last year, the European Union (EU) is the world’s largest single market, foreign investor and trader. As an integrated block, the EU represents Canada's second largest trading partner in goods and services. In 2008, Canadian goods and services exports to the EU totalled $52.2 billion, an increase of 3.9% from 2007, and imports from the EU amounted to $62.4 billion.

According to Statistics Canada, the EU is also the second largest source of foreign direct investment (FDI) in Canada, with the stock of FDI amounting to $133.1 billion at the end of 2008. In 2008, the stock of Canada's direct investment in the EU totalled $136.6 billion, and the EU is the destination of 21.4% of Canadian direct investment abroad. According to Eurostat, the EU identified Canada as its third largest destination and its fourth largest source of FDI in 2007.

According to a report in the Globe and Mail, implementation of the agreement would have serious negative consequences for the environment in both Canada and the European Union. ^[9]

References

1. ^ European Commission, EU-Canada, http://ec.europa.eu/enterprise/policies/international/cooperating-governments/canada/, retrieved 20 December 2009, "Launched at the May 2009 EU-Canada Summit in Prague, the CETA aims to eliminate trade and investment barriers between the two territories. The CETA has established a historic precedent by including the Canadian provinces directly in the negotiations." 
2. ^ ^{a b} Department of Foreign Affairs and International Trade (Canada), Canada-European Union: Comprehensive Economic and Trade Agreement (CETA) Negotiations, http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/eu-ue/can-eu-report-intro-can-ue-rapport-intro.aspx, retrieved 20 December 2009 
3. ^ Department of Foreign Affairs and International Trade (Canada), Assessing the Costs and Benefits of a Closer EU-Canada Economic Partnership, http://www.international.gc.ca/trade-agreements-accords-commerciaux/assets/pdfs/EU-CanadaJointStudy-en.pdf, retrieved 18 October 2008 
4. ^ Department of Foreign Affairs and International Trade (Canada), Canada-European Union Trade and Investment Enhancement Agreement, http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/eu-ue/tiea.aspx?lang=en, retrieved 10 August 2010 
5. ^ Kirpatrick, C.; Raihan, S., Bleser, A.; Prud’homme, D.; Mayrand, K.; Morin, JF.; Pollitt, H.; Hinjosa, L.; Williams, M. (September 2011). “EU-Canada SIA Final Report.” pgs 1-468 http://trade.ec.europa.eu/doclib/docs/2011/september/tradoc_148201.pdf]
6. ^ EU-Canada SIA Annexes to Final Report (September 2011), pgs 1-106 http://trade.ec.europa.eu/doclib/docs/2011/september/tradoc_148202.pdf
7. ^ EU-Canada SIA Briefing Document (September 2011), pgs 1-5 http://trade.ec.europa.eu/doclib/docs/2011/september/tradoc_148203.pdf
8. ^ Ibid
9. ^ What you don’t know about a deal you haven’t heard of - The Globe and Mail