Question

What do you think about free trade agreements Canada has entered into? Recently, we signed a new agreement with several European countries - comments, opinion, thoughts?

Answer 1

Canadian businesses looking to expand into new markets have a distinct competitive advantage in countries governed by one of Canada’s 14 free trade agreements (FTAs). By removing tariffs on goods and services, FTAs open doors of opportunity around the globe for Canadian companies in various sectors. Canada’s top 10 best countries to do business are those with which Canada has comprehensive FTAs. Canada has also established foreign investment promotion and protection agreements (FIPAs) with a number of countries, making them the best countries for Canadian investment.

Four of Canada’s top 10 export markets are part of the European Union (EU) – the UK, Germany, Netherlands and France. The recent provisioning of the Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA) opens up free trade to 28 countries, approximately 500 million people and represents $22 trillion in economic activity.

The largest free trade deal since NAFTA, CETA will create enormous trade and investment opportunities for Canadian companies by eliminating 98.4% of tariffs on all non-agricultural Canadian goods entering the EU. This will create many new growth opportunities for small and medium-sized Canadian exporters.

CETA is comprehensive. Beyond the removal of tariffs on goods and services, CETA demands consistency of rules governing product standards and professional certifications required by both Canada and the EU.

The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is helping to create jobs, strengthening economic relations and boosting Canada's trade with the world’s second-largest market. CETA is a progressive free trade agreement which covers virtually all sectors and aspects of Canada-EU trade in order to eliminate or reduce barriers. For example, prior to CETA’s entry into force, only 25 percent of EU tariff lines on Canadian goods were duty-free. With CETA, 98 percent of EU tariff lines are now duty-free for Canadian goods. Once CETA is fully implemented, the EU will have eliminated tariffs on 99 percent of its tariff lines.

In March 2019, Britain is scheduled to leave the 28-country European Union. How the U.K. will relate to the EU after its departure will depend on the results of the exit negotiations and how much can be preserved of the existing trade relationship. Until the March deadline passes, however, Britain will remain a full EU member and CETA’s rules will continue to govern Canada-U.K. trade.

Both Canada and the U.K. have voiced their intentions to seek out a bilateral trade deal once the U.K. exits the EU.