What is CETA?
The Canada-European Union Comprehensive Economic Trade Agreement (CETA) is a new free trade agreement that came into effect on September 21, 2017. CETA addresses all aspects of the trading relationship, including goods, services, investment, government procurement and regulatory co-operation.
Throughout the negotiation process, CFIB has ensured that small business interests were kept front and center for both Canadian and European policy makers, focused on reducing the top barriers for SMEs looking to trade with Europe, including red tape. We’ve been able to participate in discussions both at home and overseas.
What CETA means for your business
The European Union (EU) is the world’s second-largest economy and Canada’s second largest-trading partner after the United States. The EU is an opportunity for small businesses looking for new trade opportunities amid the uncertainties around renegotiations on the North American Free Trade Agreement (NAFTA).
Here are six ways that CETA will make it easier to do business in the EU:
- Cutting red tape through better regulatory co-operation
Red tape is one of the biggest barriers to trade for SMEs—and governments now recognize that. CETA is the first trade agreement that specifically seeks to streamline regulatory approaches between Canada and the EU, which will make it easier for you to do business in Europe.
CETA will also allow businesses in certain sectors to have products tested and certified in Canada before exporting them to the EU, which will save you both time and money!
- Improving market access by removing tariffs
One of the benefits to CETA is that many tariffs currently in place between Canada in the EU will either be phased out over time or be completely eliminated right away. Currently, only 25% of Canadian goods are duty-free, but once CETA enters into force, that will grow to 98% (plus another 1% to be phased out over seven years).
If your business exports certain products, including fish and seafood, grains and beef, you will be better able to compete when selling to European consumers. It will also be less expensive for Canadian companies to import certain European products.
- Ensuring preferential tariff treatment through new rules of origin
Rules around which products are considered to be “made in Canada” will be much clearer, making it easier to know whether the products you export will be eligible for lower tariffs.
- Allowing higher import quotas on certain products
If your business exports agricultural or agri-food products, you will have increased guaranteed access to European markets. For example, CETA will now allow Canadian beef producers to export 50,000 tonnes of beer per year while eliminating the 20% tariff.
- Ensuring better access to government contracts
Your business will now have access to European government contracts to supply goods and services to all levels including all EU members’ national governments, as well as regional and local governments. This means that you will have better access to government contracts for services such as architecture, construction, technology, consulting, and research and development.
- Creating more opportunities to work in Europe
If you are a skilled professional, such as an engineer, it will be easier for you to travel and work temporarily in EU countries, allowing you to access more business opportunities.
How you can start trading with the EU
- CFIB members can get more information by contacting our Business Counsellors at 1-888-234-2232 or by e-mail at firstname.lastname@example.org.
- Find out more about CETA in the Government of Canada’s CETA Toolkit here.
- Get help trading through the Canadian Trade Commissioner Service, which provides advice to small business owners looking to start trading with the EU.
Check out the new Canada Tariff Finder, an online tool that can help you find the Harmonized System codes for products and the corresponding EU preferential tariff rate.
Not a member yet? Join CFIB today for more help and information.