Talks between EU, Canada on new free trade agreement in final phase, says EU; deal would mean annual income gains of roughly €11.6B for EU, €8.2B for Canada
June 17, 2013
– The EU and Canada are currently negotiating the Comprehensive Economic and Trade Agreement (CETA) in order to take their trade and investment relationship to a new level. This EU-Canada FTA will cover the key issues relevant to a modern trade and investment environment, from ambitious new market access opportunities to clear rules for European and Canadian businesses and investors. Negotiations were launched in May 2009 and are now in their final phase.
The negotiations for a Comprehensive Economic and Trade Agreement cover among others:
access to each other's markets, for goods, services, investment and for public procurement contracts;
technical standards and regulations, rules on health and hygiene standards;
the rules that frame trade, such as intellectual property rights and competition;
sustainable development, making sure that growth in trade does not come at the expense of the environment or social and labour rights.
A EU-Canada Joint Study of October 2008 predicts annual income gains of approximately €11.6 billion for the EU and €8.2 billion for Canada thanks to an agreement. Half of the total expected GDP gains for the EU are related to trade in services, a quarter to the removal of tariffs and the remaining quarter from dismantling Non-tariff barriers. The benefits from the Agreement in this area of non-tariff barriers are estimated to result in a €2.9 billion gain for the EU and €1.7 billion for Canada.
Current Trade flows
In 2012 Canada was the EU's 12th most important trading partner, accounting for 1.8% of the EU's total external trade. Based on 2011 figures, the EU was Canada's second most important trading partner, after the US, representing 10.4% of Canada's total external trade.
The value of bilateral trade in goods between the EU and Canada was €61.8 billion in 2012. Machinery, transport equipment and chemicals dominate the EU's exports of goods to Canada, and also constitute an important part of the EU's imports of goods from Canada.
Trade in services, e.g. financial services and insurances, is an important area of the EU-Canada trade relationship. Equally, the investment relationship is of high importance. In 2011, the EU’s investment stock in Canada was around €220 billion while Canadian investment in the EU amounted to almost €140 billion.