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Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA)

Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA). September 9, 2014. Timelines. CETA Agreement Agreement in Principle – October 18, 2013 Completion of negotiations announced August 5, 2014 Final Agreement Canada-EU Summit – anticipated for September 2014

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Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA)

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  1. Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA) September 9, 2014

  2. Timelines • CETA Agreement • Agreement in Principle – October 18, 2013 • Completion of negotiations announced August 5, 2014 • Final Agreement • Canada-EU Summit – anticipated for September 2014 • Entry into Force • Ratification required for Canada and European Union • Provinces-Territories and EU Member States reviewing • Legal review + translation (23 languages) • Anticipate entry into force within 2 years • Spring or Summer of 2016

  3. EU Overview • 28 Member States • 510 million people • $17 trillion in GDP • Germany, France, UK, Italy • EU indicating CETA boost trade by 23% (~37Bn CND) • Canada forecasting $12 billion boost to GDP --- low estimate

  4. Economies By GDP (Trillions $CDN) (1) • Canada will have bilateral trade agreements with 2 largest economies. • Plus, in negotiations or discussions with Japan and China • European Union:: CETA - Agreement in Principle • United States : NAFTA; TPP (negotiating) • Japan: EPA (negotiating); TPP (negotiating) (2) (3)

  5. Areas Under Provincial Jurisdiction • Government Procurement • Services • Investment • Technical Barriers to Trade & Regulatory Cooperation • Environment • Labour • Examples of other areas of interest under Federal Jurisdiction: • Goods / Market Access / Tariffs; Subsidies; Financial Services; Intellectual Property; Rules of Origin; Wines/Spirits; Temporary Entry

  6. PEI-EU Trade Total exports to EU = >$80 million / year • France, UK, Germany account for ~ 60% • Top Export Products: Fish/Seafood (Lobster), Bioscience, Aerospace PEI Exports to European Union ($Millions Cdn) Witnessing 5 yr growth in exports to EU. Diversification of exports

  7. CETA Benefits TARIFF PACKAGE: 98% immediately; 99% 7 years • Agriculture: 93.6% of tariff lines at 0% immediately • 95% + of tariffs will be duty-free after 7 years • Fish / Seafood: 95.5% of tariff lines at 0% immediately • 100% of tariffs at 0% no later than 7 years • Industrial Products: 99.3% of tariffs at 0% immediately • 100% of tariffs at 0% no later than 7 years

  8. Agriculture & Agri-Food • Immediate tariff elimination • Frozen potato: range from 14.4% to 17.6% • Fresh/frozen fruits: • Blueberries – up to 14.4% • Apples – 9% • Cherries – 12% • Processed products: • Oils – including canola 3.2% to 9.6% • Miscellaneous food prep: start at 12.8% • Processed pulses/grains; confectionary, etc • Start at 7.7% • Beef and Pork access: transitional quota • Beef: 50k tonnes – 35k fresh; 15k frozen • Pork: 75k tonnes • Duty-free in-quota access

  9. Agriculture and Agri-Food • Supply-Managed Industries remain intact • No reduction in over-quota tariffs • Poultry and eggs excluded • Quota: 17,700 tonnes of cheese • Geographical Indications: • Protection for 180 products --- meats, cheese • Feta, Asiago, Munster, Gorgonzola, Fontina • Grandfather clause for existing producers in Canada

  10. Processed Food • Favourable Rules of Origin • Allows Canadian products to qualify for tariff elimination • Recognizes global value chains • Encourages use of Canadian inputs • Derogations (more liberal for high use of imported goods) • Processed foods: baked goods, rice, cereals – 35k tonnes • High sugar containing: drink mixes, etc – 30k growing to 50k tonnes • Chocolate and confectionary: chocolate prep – 10k tonnes • Cat and dog food: 60k tonnes • Quota volumes at 3 times current trade • Review every 5 years

  11. Fish & Seafood FISH PACKAGE: • 95.5% of all tariffs at 0% - entry into force • 100% of tariffs at 0 after 7 years • Immediate tariff elimination • Live lobster: rates of 8% • Oysters: rates of 0 to 9%, • Most other species (ex. Scallops, shrimp): from 5.5% - 20% • Phased-out tariffs • Frozen lobster: 6% and 16% - 3yr & 5yr • Mussels: 20% - 7 yrs • Transitional quotas (TRQ) – shrimp and cod

  12. Industrial Goods • 99.3% of tariff lines at 0% – entry into force • Immediate tariff elimination • Chemicals: average rates of 5% • Forestry products: range from 0% - 10% • Autos: range from 3% - 22% • 3, 5, and 7 year phase-outs • Origin quota of 100k vehicles --- currently exporting 10k • US-EU provisions • Canada has transition periods • Ships (3 and 7 years) • Autos (3, 5, and 7 years)

  13. Other Benefits • GOVERNMENT PROCUREMENT • Access to $2.7 trillion procurement market • Broad coverage of goods, services and construction • Services • Broad coverage – most ambitious offer by EU in FTA • Professional services: legal, architectural, engineering, urban planning • Environmental, ICT, R&D, etc

  14. Key Sources of Information • Overview of CETA Agreement http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/index.aspx?lang=eng • CETA – Technical Summary http://international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/understanding-comprendre/technical-technique.aspx?lang=eng • CETA Benefits for Prince Edward Island http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/benefits-avantages/pei-ipe.aspx?lang=eng

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