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Steve Verheul Chief Trade Negotiator Canada-European Union Jeff Loder NL Chief Trade Negotiator Director of Trade Policy 1
Canada-EU Comprehensive Economic and Trade Agreement World GDP*, 2015 ROW 50. 7% EU 22. 6% The EU is the world’s largest integrated economy, with more than 500 million consumers and a GDP of CAD 21 trillion. NAFTA* 26. 7% * Excludes Canada Source: CETA Secretariat, DFATD Data: IMF, WEO 2
CETA – Setting New Standards Eliminates Most Tariffs Promotes and Protects Investment Addresses Non-tariff Barriers CETA Confirms Access to public contracts at all levels Enhances Labour Mobility Streamlines Trade in Services
CETA – Outcomes for Newfoundland & Labrador Trade in Goods Ambitious tariff elimination: • • Comprehensive tariff elimination across all sectors 98% of all EU tariff lines eliminated on day one of CETA’s entry into force Duty-free access across 99% of all tariff lines once fully implemented Duty-free access for 100% of Canadian industrial goods once CETA fully implemented. Clear and favourable rules of origin: • Reflects the real-world sourcing patterns of Canadian and EU companies while encouraging production to take place in Canada or the EU Customs and trade facilitation: • Advance rulings on the origin and tariff classification of products • Automated border procedures will be implemented where possible
CETA – Outcomes for Newfoundland & Labrador Metal and Mineral Products Between 2013 and 2015, Newfoundland & Labrador exported an average of $1. 8 billion in metal and mineral products to the EU. CETA will eliminate tariffs on • • Non crude petroleum products and light oils current tariffs of up to 4. 7% Metal products such as - Iron and steel tube or pipe fittings current tariffs of up to 3. 7% - Iron and steel tanks current tariffs of 8% to 20% 5
CETA – Outcomes for Newfoundland & Labrador Fish and Seafood From 2013 to 2015, Newfoundland & Labrador exported an average of $153 million worth of fish and seafood to the EU • Current tariffs of up to 25% CETA will eliminate tariffs on all fish and seafood products, including value-added goods like cooked and peeled shrimp, frozen cod fillets, and processed crab and lobster • • • Frozen shrimp, current tariff of 12% Cooked and peeled shrimp, current tariff of 20% Snow crab, current tariff of up to 8% Dried and salted cod, current tariff of 13% Frozen scallops, current tariff of 8% 6
CETA – Outcomes for Newfoundland & Labrador Forestry and Wood Products From 2013 to 2015, Newfoundland & Labrador exported an average of $12 million worth of forestry and wood products to the EU • Current tariffs of up to 10% Comprehensive duty-free, quota-free access to the EU on all forest products, including value-added products • • Maple and ash wood, current tariffs of 2. 5% Plywood, current tariffs of 7% to 10% Oriented strand board, current tariffs of 7% Fibreboard, current tariffs of 7% 7
CETA – Outcomes for Newfoundland & Labrador Government Procurement Access to $3. 3 trillion EU procurement market Goods Services Construction Services EU-level institutions / Member State government entities * Improved Access Regional government entities ** Improved Access Local government entities and bodies governed by public law New Access Utilities New Access Procurement funded by EU cohesion funds at local government level New Access Entity / Procurement Type * Removal of reciprocity notes / ** Lowering of thresholds
CETA – Outcomes for Newfoundland & Labrador Non-Tariff Barriers facilitating recognition of equivalency in technical regulations to reduce manufacturing costs for exports; CETA seeks to reduce the trade distorting impact of non-tariff barriers by: establishing a protocol on conformity assessment that will allow Canadian companies to have their products tested and certified for the EU market in Canada; encouraging Canadian and EU standard-setting bodies to cooperate on joint initiatives; and creating mechanisms where trade irritants can be discussed with the goal of speedy resolution.
CETA – Outcomes for Newfoundland & Labrador Trade in Services Negative List Approach: Ratchet Mechanism: All service sectors are subject to CETA obligations unless explicitly listed as reservations in the Annexes. Future regulatory or legal changes that make it easier for Canadian service suppliers to access the EU market are automatically locked in under CETA. MFN Treatment: National Treatment: If the EU offers better treatment to another country under an FTA, Canada would automatically receive the same treatment. Canadian service providers in sectors covered by CETA will be treated the same way as service providers from the EU.
CETA – Outcomes for Newfoundland & Labrador Temporary Entry CETA provides greater certainty and predictability for Canadian service providers • CETA’s temporary entry provisions facilitate trade by improving labour mobility for a wide range of business persons and business activities. • CETA establishes a framework for the mutual recognition of professional qualifications as well as a Chapter on domestic regulation. • CETA does not impact permanent employment or migration.
CETA – Outcomes for Newfoundland & Labrador Investment • Canadian and EU investors will benefit from the predictable investment climate established under CETA, which includes: - treatment no less favourable than that granted to their domestic counterparts or any other investor from a third country investor protections related to treatment of investors/covered investments, expropriation and transfers; and a recourse for breaches of investment protections • Furthermore, the net benefit review threshold under the Investment Canada Act will be raised to $1. 5 billion for EU investments following CETA’s entry into force. • Access to the EU market, along with existing access to the U. S. market, is expected to attract new volumes of investment to Canada.
CETA – Next Steps Canada and the EU are committed to seeing CETA signed in 2016 and enter into force in early 2017 Legal Review Translation Signature (Provisional Application) Ratification 13