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CETA: What does the Canada-EU trade deal mean for your business?


The Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union will have a major impact on Canadian business owners. Under CETA, 98% of Canadian goods can now enter the EU duty-free. Gone are customs duties that were as high as 25%.

Also abolished are many non-tariff barriers, such as rules of origin, import quotas and other technical barriers to trade when exporting to the world’s second-largest economy.

“This deal will create jobs, strengthen economic relations and increase opportunities for Canadian businesses,” says Ailish Campbell, Chief Trade Commissioner of Canada and Assistant Deputy Minister for International Business Development at Global Affairs Canada. “The agreement makes it easier for Canadian entrepreneurs to reach over half a billion new consumers. All sectors of the Canadian economy will benefit.”

Here are answers to frequently asked questions about CETA.

1. What is CETA?

The Canada-EU Comprehensive Economic and Trade Agreement came into effect on September 21, 2017. Its main element is the significant reduction of tariffs on Canadian exports to the EU.

With CETA, 98% of Canadian goods are now duty-free, with an additional 1% becoming duty-free over the next seven years. Before CETA, only one in four Canadian products exported to the EU was duty-free.

Beyond tariffs, CETA also has an effect on:

  • Rules of origin: Canadian exporters will benefit from preferential tariff treatment for products that are “made in Canada.”
  • Import quotas: Agricultural and agri-food businesses will benefit from increased access to European markets, allowing for 50,000 tonnes of Canadian beef and 80,000 tonnes of Canadian pork per year. The 20% customs tariff that currently applies to high-quality beef will be eliminated.
  • Red tape: Canadian companies in many sectors will be allowed to test their products and certify them in Canada before export to the EU.
  • Government procurement: CETA gives Canadian businesses access to European government contracts at all levels—a market worth $3.3 trillion annually.
  • Direct investment: CETA’s direct investment rules guarantee Canadian investors secure access to the EU. This should be of interest to the energy, mining and manufacturing sectors as well as financial services, automotive vehicles, aerospace, transportation, business services and professional services.

2. How will CETA affect Canadian entrepreneurs?

CETA will give Canadian businesses an edge over their competitors in the European market. But that competitive advantage will not last forever: The European Union will no doubt sign trade agreements with other countries in the future.

CETA covers virtually all sectors and aspects of Canada-EU trade. See the impact on key sectors of the economy.

Importers will be more competitive

Canada will also abolish customs duties on EU imports, which will benefit Canadian importers. As well, Canada agreed to increase the amount of duty-free EU cheese imports. Learn more about the new cheese tariff rate quotas.

3. Will service providers have better access to the EU market?

Canadian services exporters will be treated the same way as those from the EU (with the exception of reservations in industries such as health care, public education and other social services).

The EU is the largest importer of services in the world. Businesses specializing in management, finance, engineering services, architecture, IT and other technical services are in a good position to benefit from the agreement.

Service exporters can also benefit from access to EU government procurement markets. Nearly 20% of EU government contracts relate to the procurement of business services. This means that Canadian companies in the fields of architecture, construction, environmental services, technology, marketing consulting and research and development, among others, will gain greater access to a huge market.

5. How will CETA affect labour mobility and professional qualifications?

CETA streamlines entry and visa procedures to make it easier for Canadians to do business in the EU and for Canadian companies to hire EU professionals. It also makes it easier to get an intra-company work visa. The agreement provides a framework for professional orders and organizations in both markets to work out equivalencies for qualifications.

6. How can Canadian business owners learn more about CETA?

You can contact the Trade Commissioner Service or Export Development Canada to get free market intelligence, useful contacts to get started and information about upcoming events and trade shows. You can also find out more information on the government’s dedicated CETA website (www.international.gc.ca/CETA).

BDC experts can also help you gear up to gain the maximum benefit from your export project.