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.
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.
4. How do I know what tariff will be levied on my export?
You can use the Canada Tariff Finder tool to identify what tariff will be levied on your export. You can also ask the Canadian Trade Commissioner Service for information on specific products and services.
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.