What Does CETA Mean For Manitoba

Oct 28, 2013 | Business News and Tips, Chamber News

The Manitoba Chamber of Commerce applauds the recent Federal government’s announcement that after four years of negotiation the Canada-EU Comprehensive Economic & Trade Agreement (CETA) has been signed

The most obvious benefit is a reduction of tariffs (i.e. import taxes) for traded goods. Once CETA is ratified, import duties on 98% of all EU product lines will be eliminated, with an additional 1% subject to phase-outs of up to 7 years. This includes all advanced manufacturing goods, such as machinery & equipment, electrical equipment and medical devices. The majority of agricultural tariffs including those applying to fruits & vegetables and oil seeds will also drop to zero upon entry into force. On the other hand, duty reductions on passenger vehicles, grain and certain fish products will take place over a longer period, as will increased quotas for Canadian beef and pork.

Under CETA, Canadian beef exporters will receive a tariff quota of 50,000 tons, whereas pork exporters received 80,000 tons. These levels are deemed sufficient to justify the investments needed to create a separate supply chain (the EU market will not accept hormone enhanced products, which are common to the Canadian meat industry). These tariff quotas will be phased in over 3-7 years.

Canada’s supply management system remains intact. Chicken and eggs are carved out of the agreement entirely. However, the EU will be given additional tariff quotas for milk concentrates and cheese. For cheese, this amounts to a doubling of the current tariff quota to 30,000 tons, which still represents only 4.2% of the domestic market. In return, Canada has secured access to the entire European dairy market.

The Canadian government does not expect EU cheese imports to harm Canadian producers, but announced the possibility of compensation if that were to be the case

Once the deal is fully implemented, duty free access will apply to all industrial goods and 95% of agricultural products.

Although the tough issues have been resolved, there are still a number of steps until the agreement comes into force. The text needs to be finalized through technical and legal review and translated into multiple European languages. Although Canadian provinces have given their tentative support for the deal as it stands, they will be consulted once again during this process.

Once the text is final, the agreement will be submitted for ratification, which is expected to take 18-24 months. In Canada, this means submitting the agreement to parliament. In Europe, ratification requires the support of a qualified majority of EU member states, as well as an affirmative vote from the European Parliament. Finally, provinces and member states will likely need to adjust their current laws and regulations before the agreement can go into effect.

The Chamber looks forward to working with the government and our membership to make sure that the opportunities opened up by this agreement are fully realized. We also hope that the momentum generated by signing this deal will help push forward Canada’s other major trade talks, including with Japan, India, Korea and the Trans-Pacific Partnership countries.

To see all of the benefits please click here.

Recently, the Manitoba Chambers of Commerce was invited by the Honourable Shelly Glover, Minister Responsible for Manitoba, to take part in a stakeholder roundtable and press conference to discuss the benefits that this agreement will bring to workers and businesses in key sectors across Canada.

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