27 October, 2016
category: Trade & Policy
Would CETA boost further the EU – Canada trade relations or would it vanish and leave things as they are?
Canadian Chamber of Commerce in Belgium and Luxemburg has long planned an extended discussion on CETA and finally it took place at the Federation of Enterprises in Belgium offices. By coincidence it happened right during the tipping point negotiations between Canadian and Belgian Governments intended to facilitate the last minute refusal to sign the agreement by the Wallonia Government. 27 EU Member states have given their approval and go ahead for the CETA. Now the last word has to be said by Belgium.
“I could not imagine that my country would block CETA”, with these words Pieter Timmermans, CEO of Federation of Enterprises in Belgium (VBO-FEB) opened the event.
Belgium and Canada have a very long and fruitful relationship, dating back to the time when Canada was just forming over 200 years ago, said the Vice-President of CanCham Belux, Honorary Consul of Canada for Flanders Frederic Agneessens. Today these relationships flourish. In 2014 Canada Belgium trade has brought 59 Bln Euros with Belgium being the 5th trade partner in EU for Canada, stated Peter Robberrecht, Diplomatic Adviser of the Belgian Secretary of State for Foreign Trade.
The history and current state of relations between all EU countries and Canada made possible negotiations on the vastly ambitious agreement CETA, the first of such scale and level agreement in G7. On the Canadian side there was a great disappointment in the last minute surprise objection of the Trade agreement that has been prepared since 2009. John Manley, President and CEO of the Business Council of Canada has emphasised once again that CETA will boost economic growth of both Canada and European Union. “In today’s global economic situation, the only remaining tool for growth is Trade”, he said in his speech. John Manley has strongly criticised parts of media that confuse and mix Canada and United States. “Canada is not United States! We are an independent sovereign country!”
A lot of hope was put in tomorrow’s final decisions in Belgium and European Commission that the agreement will be signed. This agreement has about 1500 pages that were available on the Canadian and European official web-sites for many months. There is a lot of thought and respect in CETA for existing regulation in relation to food and agriculture: European regulations will be followed for goods intended for sale in Europe, and in reverse Canadian food safety standards will be followed for Canada destined goods. Briefly speaking some major benefits of CETA are formulated below:
- Products that brought a lot of controversial debates in the media will be excluded, chicken is one of the examples.
- If CETA is ratified then 98% of trade tariffs will set to zero immediately while for certain goods they will be gradually dropped.
- This trade agreement will allow both sides to make the most of global value chains
- It will help generate more jobs and growth
- There will be no double certification, therefore much less time and money will be required to obtain product certificate.
- Transaction costs will diminish and clearance of goods will become more transparent
- CETA will make it easier to move personnel between Canada and Europe.
- While the agreement is very comprehensive it fully preserves the right of governments to regulate.
- CETA will finally open to Europeans currently closed for them Canadian government procurement market. It will equalize the situation because so far Canada had access to a very open government procurement European market.
And it could be very timely agreement, according to Jason Langrish, Chairman of Canada Europe Roundtable for Business. Particularly he stated that even though Canada has a heavy reliance on NAFTA which for many years had been a very lucrative and successful agreement for the country, it is no longer as useful as it used to be. He also noted that at the same time WTO is losing its appeal and usefulness as a vehicle for trade it does not give intended IP and investor protection. Mr. Langrish stressed, that Europe saw that there was an opportunity to create a new innovative agreement and the best partner to start was the closest in mentality and legislation – Canada.
While answering the question, what are the measurable losses will both side incur if CETA is not signed, he regrettably pointed at EU’s inability to complete a comprehensive trade agreement. In his opinion in this situation EU shows itself as an inward looking protectionist union. While Canada will also incur losses, but it always can go back to NAFTA and sign individual agreements with each European country.
Obviously both sides with the exception of Wallonia region in Belgium are very much interested in signing the agreement, but democracy is Democracy, and EU cannot ignore the opinion of this region no matter how many countries voted yes to CETA. So there are few scenarios to foresee. The best case scenario – CETA will be signed according to the schedule if both sides will compromise in their arguable positions, average scenario – it will take some additional work and time (who knows how long!) to address all existing controversies, and the worst scenario – it will not be signed. In this case nine years of hard work from both sides will be wasted and both sides definitely will not acquire those benefits which could help their countries to grow economies, jobs and boost their competitiveness in a globalized world. Should it be signed apart from apparent pluses for the participants it would serve as a role model for many other regions and countries.