With a flurry of press releases and a ceremony at the Port of Montreal, a new chapter in Canada’s economic history has begun to unfold as Canada’s trade deal with Europe came into effect.
The Canada-Europe Trade Agreement (CETA) took provisional effect Sept. 21, even as the third round of the NAFTA renegotiations kicked off in Ottawa.
While the agriculture sector welcomed the news, industry representatives also expressed reservations about the pace of efforts to now clear non-tariff barriers and other unfinished segments.
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Brian Innes, president of the Canadian Agri-Food Trade Alliance urged Ottawa to press ahead on unresolved issues with the EU. Innes cited the slow progress the EU is making to allow real, commercially viable access to the EU for agri-food exporters. This includes progress on meat-processing protocols, crop protection products, country-of-origin labelling and the timely approval of biotechnology traits.
“Our growing export-oriented agri-food sector relies on access to markets,” he said.
There is also apprehensions about recent protectionist initiatives in Europe such as Italy’s country-of-origin labelling of Canadian pasta provisions. These measures are not in the spirit of CETA and threaten to fragment the common EU market.
Still the potential for Canada making greater trade inroads in EU markets is huge, Innes said. It is the fourth-largest export destination for Canadian agri-food products and when fully implemented, the deal will eliminate EU tariffs on almost 94 per cent of Canada’s agri-food products.
While the results won’t be immediate for some agri-food sectors, the agreement presents the potential to drive additional exports of up to $1.5 billion per year, Innes said.
“This includes $600 million in beef, $400 million in pork, $100 million in grains and oilseeds, $100 million in sugar-containing products and a further $300 million in processed foods, fruits and vegetables,” he said.
Chris White, president and CEO of the Canadian Meat Council, said that critical technical barriers to increased meat shipments to Europe still have to be resolved. One provision pertains to the location at which the EU health mark label is applied to boxes of meat. This could be resolved quickly in Canada, he said.
The other issue involves antimicrobials used to treat livestock. The meat industry and the Canadian government “are collaborating on supplemental research to reinforce the existing food safety and antimicrobial efficacy data that has been accepted by food safety authorities in Canada, the United States, Japan and numerous other countries. The industry expectation is that, once the supplemental research has been completed, these antimicrobial interventions will receive timely approval by the EU regulatory authorities.”
While it is anticipated that some niche exports of Canadian beef and pork to the EU will occur in the meantime, it is not expected that the CETA will reach the potential that was envisaged by Canadians until the associated technical requirements become commercially viable, he said.
Meanwhile, the EU has unlimited duty-free access to the Canadian market for pork, beef, veal and prepared meats.
International Trade Minister François-Philippe Champagne marked the launch of the deal at the Viau container terminal in Montreal where 80 per cent container shipments to and from Europe pass through. Joining him were Peteris Ustubs, the European Union ambassador to Canada and Steve Verheul, the chief Canadian negotiator of the European deal, who now is also the chief negotiator for Canada in the NAFTA talks.
Provisional application means 98 per cent of the trade between Europe and Canada is tariff free, which should bring lower prices and more choice for consumers, Champagne said. An additional one per cent will be eliminated over a seven-year phase-out. It will only enter into force fully when all EU member states ratify it.
“Today marks an important moment for progressive trade in the world,” Champagne said. “And with it, Canada and the European Union have made history.”
The EU is the world’s second-largest economy and Canada’s second-largest trading partner after the United States. The trade deal is “a real competitive edge for Canada and significant opportunities for businesses to diversify in the world’s most lucrative market,” he said.
While finalized by the Trudeau government, most of the work on the trade deal with Europe was accomplished under the former Conservative government. It “is a legacy of the Stephen Harper government, which commenced negotiations of this historic and progressive 21st-century gold-standard agreement in 2009,” said former trade minister Ed Fast. “Free and open markets are the bedrock of a strong and prosperous Canadian economy, and I encourage Canadian companies to take advantage of this golden opportunity to grow their businesses.”
Jean-Claude Juncker, president of the European Commission, said the trade deal is “an instrument for growth that benefits European companies and citizens, but also a tool to project our values, harness globalization and shape global trade rules.
“Now it’s time for our companies and citizens to make the most out of this opportunity and for everyone to see how our trade policy can produce tangible benefits for everyone.”
John Manley, president and CEO of the Business Council of Canada, said the trade deal “sets the standard for bilateral trade agreements, promoting trade and investment as well as ensuring sustainable development. It is the most progressive trade agreement ever negotiated by both parties, confirming the sovereign right of governments to regulate in the public interest and reinforcing strong environmental and labour protections.”