Comprehensive Economic and Trade Agreement
Encyclopedia
The Comprehensive Economic and Trade Agreement (CETA) is a proposed free trade agreement between Canada
and the European Union
.
CETA is Canada's biggest bilateral initiative since NAFTA.
It was hatched as a result of a joint study "Assessing the Costs and Benefits of a Closer EU-Canada Economic Partnership" which was released in October of 2008. Officials announced the launch of negotiations on May 6, 2009 at the Canada-EU Summit in Prague.
This after the Canada-EU Summit in Ottawa on March 18, 2004 where leaders agreed to a framework for a new Canada-EU Trade and Investment Enhancement Agreement (TIEA). The TIEA was intended to move beyond traditional market access issues, to include areas such as trade and investment facilitation, competition, mutual recognition of professional qualifications, financial services, e-commerce, temporary entry, small- and medium-sized enterprises, sustainable development
, and sharing science and technology.
The TIEA was also to build on a Canada-EU regulatory cooperation framework for promoting bilateral
cooperation on approaches to regulatory governance, advancing good regulatory practices and facilitating trade and investment. In addition to lowering barriers, the TIEA was meant to heighten Canadian and European interest in each other’s markets.
The TIEA continued until 2006 when Canada and the EU decided to pause negotiations. This led to negotiations on a Comprehensive Economic and Trade Agreement (CETA), and this agreement will go beyond the TIEA toward an agreement with a much broader and more ambitious scope.
The EU-Canada Trade Sustainability Impact Assessment (SIA), a three-part study commissioned by the European Commission to independent experts and completed in September 2011, provides a comprehensive prediction on the impacts of CETA.
It predicts a number of macro-economic and sector-specific impacts, suggesting the EU may see increases in real GDP of 0.02-0.03% in the long-term from CETA, whereas Canada may see increases of 0.18-0.36%; the Investment section of the report suggests these numbers could be higher when factoring in investment increases. At the sectoral level, the study predicts the greatest gains in output and trade to be stimulated by services liberalization and by the removal of tariffs applied on sensitive agricultural products; it also suggests CETA could have a positive social impact if it includes provisions on the ILO’s Core Labour Standards and Decent Work Agenda. The study details a variety of impacts in various “cross-cutting” components of CETA: it advocates against controversial NAFTA-style ISDS
provisions; predicts potentially imbalanced benefits from a government procurement (GP) chapter; assumes CETA will lead to an upward harmonization in IPR regulations, particularly changing Canadian IPR laws; and predicts impacts in terms of competition policy and several other areas.
Canada
and the EU have a long history of economic cooperation. Comprising 27 Member States with a total population of nearly 500 million and a GDP of over C$19 trillion last year, the European Union (EU) is the world’s largest single market, foreign investor and trader. As an integrated block, the EU represents Canada's second largest trading partner in goods and services. In 2008, Canadian goods and services exports to the EU totalled $52.2 billion, an increase of 3.9% from 2007, and imports from the EU amounted to $62.4 billion.
According to Statistics Canada
, the EU is also the second largest source of foreign direct investment
(FDI) in Canada, with the stock of FDI amounting to $133.1 billion at the end of 2008. In 2008, the stock of Canada's direct investment in the EU totalled $136.6 billion, and the EU is the destination of 21.4% of Canadian direct investment abroad. According to Eurostat
, the EU identified Canada as its third largest destination and its fourth largest source of FDI in 2007.
According to a report in the Globe and Mail, implementation of the agreement would have serious negative consequences for the environment in both Canada and the European Union.
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
and the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
.
CETA is Canada's biggest bilateral initiative since NAFTA.
It was hatched as a result of a joint study "Assessing the Costs and Benefits of a Closer EU-Canada Economic Partnership" which was released in October of 2008. Officials announced the launch of negotiations on May 6, 2009 at the Canada-EU Summit in Prague.
This after the Canada-EU Summit in Ottawa on March 18, 2004 where leaders agreed to a framework for a new Canada-EU Trade and Investment Enhancement Agreement (TIEA). The TIEA was intended to move beyond traditional market access issues, to include areas such as trade and investment facilitation, competition, mutual recognition of professional qualifications, financial services, e-commerce, temporary entry, small- and medium-sized enterprises, sustainable development
Sustainable development
Sustainable development is a pattern of resource use, that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come...
, and sharing science and technology.
The TIEA was also to build on a Canada-EU regulatory cooperation framework for promoting bilateral
Bilateralism
Bilateralism consists of the political, economic, or cultural relations between two sovereign states. For example, free trade agreements signed by two states are examples of bilateral treaties. It is in contrast to unilateralism or multilateralism, which refers to the conduct of diplomacy by a...
cooperation on approaches to regulatory governance, advancing good regulatory practices and facilitating trade and investment. In addition to lowering barriers, the TIEA was meant to heighten Canadian and European interest in each other’s markets.
The TIEA continued until 2006 when Canada and the EU decided to pause negotiations. This led to negotiations on a Comprehensive Economic and Trade Agreement (CETA), and this agreement will go beyond the TIEA toward an agreement with a much broader and more ambitious scope.
The EU-Canada Trade Sustainability Impact Assessment (SIA), a three-part study commissioned by the European Commission to independent experts and completed in September 2011, provides a comprehensive prediction on the impacts of CETA.
It predicts a number of macro-economic and sector-specific impacts, suggesting the EU may see increases in real GDP of 0.02-0.03% in the long-term from CETA, whereas Canada may see increases of 0.18-0.36%; the Investment section of the report suggests these numbers could be higher when factoring in investment increases. At the sectoral level, the study predicts the greatest gains in output and trade to be stimulated by services liberalization and by the removal of tariffs applied on sensitive agricultural products; it also suggests CETA could have a positive social impact if it includes provisions on the ILO’s Core Labour Standards and Decent Work Agenda. The study details a variety of impacts in various “cross-cutting” components of CETA: it advocates against controversial NAFTA-style ISDS
Investor state dispute settlement
Investor State Dispute Settlement provisions in international trade treaties grant investors covered by provisions with a right to initiate dispute settlement proceedings against foreign governments in their own right under international law....
provisions; predicts potentially imbalanced benefits from a government procurement (GP) chapter; assumes CETA will lead to an upward harmonization in IPR regulations, particularly changing Canadian IPR laws; and predicts impacts in terms of competition policy and several other areas.
Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
and the EU have a long history of economic cooperation. Comprising 27 Member States with a total population of nearly 500 million and a GDP of over C$19 trillion last year, the European Union (EU) is the world’s largest single market, foreign investor and trader. As an integrated block, the EU represents Canada's second largest trading partner in goods and services. In 2008, Canadian goods and services exports to the EU totalled $52.2 billion, an increase of 3.9% from 2007, and imports from the EU amounted to $62.4 billion.
According to Statistics Canada
Statistics Canada
Statistics Canada is the Canadian federal government agency commissioned with producing statistics to help better understand Canada, its population, resources, economy, society, and culture. Its headquarters is in Ottawa....
, the EU is also the second largest source of foreign direct investment
Foreign direct investment
Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...
(FDI) in Canada, with the stock of FDI amounting to $133.1 billion at the end of 2008. In 2008, the stock of Canada's direct investment in the EU totalled $136.6 billion, and the EU is the destination of 21.4% of Canadian direct investment abroad. According to Eurostat
Eurostat
Eurostat is a Directorate-General of the European Commission located in Luxembourg. Its main responsibilities are to provide the European Union with statistical information at European level and to promote the integration of statistical methods across the Member States of the European Union,...
, the EU identified Canada as its third largest destination and its fourth largest source of FDI in 2007.
According to a report in the Globe and Mail, implementation of the agreement would have serious negative consequences for the environment in both Canada and the European Union.