CETA turns four — a look back, and a look ahead

On September 21, 2017, Canada and the European Union (EU) marked the provisional application of the Comprehensive Economic and Trade Agreement (CETA). The occasion was celebrated in Canada with an event at the Port of Montreal. In Toronto, the CN Tower was lit up in the EU’s official colours — blue and gold. On the other side of the Atlantic, the CETA era kicked off with a reception in Brussels. Hundreds of Canadian officials and European partners were on hand for the festivities. Among those in attendance was Stéphane Lambert.

Today, Lambert is Canada’s Senior Trade Commissioner in Paris. At the time, he was the Canadian Trade Commissioner Service’s (TCS) point person at Canada’s Mission to the EU. He was roughly a month into his new job when CETA’s provisional application came into effect after eight years of negotiations. “There was real excitement in the air. My sense was that a new chapter in our trade and economic relations with the EU was opening up,” he says when asked about those early days.

Part of Lambert’s role was to promote trade between Canada and the EU, and to “give life to the Agreement” by educating Canadian companies and European partners about CETA and its opportunities. Doing so enabled “our companies [to] seize the opportunities and take advantage of the hardly fought gains.”

As you will read in this issue, CETA covers virtually every aspect of doing business. The Agreement’s positive impact was profound and immediate. For starters, tariffs on 98 percent of Canadian goods exports to the EU were eliminated, making our products more competitive in the EU marketplace. The result has been a notable expansion of trade with the EU. Lambert also points out that the “expansion has been broad‑based and inclusive. Our exports rose in almost all sectors, [to] almost all Member States, and from most parts of Canada.” More Canadian small and medium‑sized enterprises (SMEs) are now exporting to the EU. And remarkably, our exports to the EU have withstood the impact of the COVID‑19 pandemic. In 2020, despite the challenges and disruptions caused by the pandemic, Canadian SMEs exported $8.0 billion in goods to the EU, a 24 percent increase since CETA's provisional application in 2017. Two‑way merchandise trade in 2020 was 12.5 percent higher than it was pre‑CETA in 2016.

Lambert adds that CETA “was designed with SMEs in mind with specific tools that make exporting to the EU an easier journey for Canadian businesses.” He highlights two time and cost-saving tools that make it easier for SMEs to qualify for and enjoy the benefits of CETA. The first one allows exporters to get advanced binding decisions (called Binding Origin Information) on origin and tariff determination from the EU, which leads to certainty in doing business and can speed things up at the border. The second is a “conformity assessment” tool that allows a Canadian exporter to get its product tested and certified for the EU market in Canada using a Canadian certification body, thereby reducing duplication in testing as well as delays and costs to enter the EU market.

But the benefits of CETA go well beyond trade in goods and the removal of EU import tariffs. This issue of CanadExport will explore what CETA means for Canadian businesses when it comes to trade in services; temporary entry into EU countries for key personnel; and the opening up of opportunities for Canadian companies at all levels of the EU government procurement market.

Lambert notes that the EU is an attractive market for Canadian women exporters in particular. There’s a higher percentage of women-owned companies in services than in other sectors. And the EU — by far the world’s largest importer of services — liberalized its services market under CETA to a greater extent than it ever had before for any trading partner, Lambert says.

Lambert is optimistic about continued future growth, noting that the significant expansion of two‑way trade over the past four years “across nearly all sectors and regions … points to the establishment of durable business links and new supply arrangements between the EU and Canada.”

With Lambert now leading the TCS team in Paris, Karen Kennedy has taken over the reins as the Senior Trade Commissioner responsible for the EU in Brussels. Kennedy is no stranger to CETA. She helped negotiate the Agreement as the lead intellectual property negotiator, and was the director of the CETA Secretariat at Global Affairs Canada. She then served as Senior Trade Commissioner in Madrid, where she helped promote CETA after it went into effect.

“I feel like I’ve been working on CETA in some shape or form since 2011 … so the Agreement is really close to my heart, and it’s especially important for me now that we help companies use it and benefit from it,” she says. In Madrid, “we worked together as a team to find strategies that could make the Agreement real for exporters. We made CETA part of every activity and every initiative that we worked on. We invested time educating local contacts like the local Chambers of Commerce, so they would become CETA advocates as well.”

Her team in Madrid paved the way for Canadian beef to be sold in Costco stores in Spain by taking advantage of CETA quotas. “This was one of our big wins. It took a full four years to realize and it really was a TCS initiative from day one,” she says. With Trade Commissioner Maximo Hurtado’s local contacts and knowledge, Kennedy adds, “we were able to put together a solid plan to get Canadian beef onto Spanish plates. It’s been really exciting (and delicious!) to be a part of that success.” And that success hasn’t stopped with Costco. She notes there are now distributors across Spain selling Canadian beef to the hospitality and restaurant sectors. For more on this success story, read this CanadExport article.

When asked about what she has planned in her current role in Brussels, Kennedy says that in addition to providing information about the Member States, there’s a need to provide clients with information and support on the EU itself, particularly with respect to the many EU regulations that Canadian companies need to understand. She says the Trade Commissioners at the Canadian Mission to the EU have a lot of expertise to share, which is why the CETA Centre of Excellence was created. She describes it as a “business centre” that Canadian companies can turn to if they want to enter the EU market, and which can also provide guidance and support to other TCS offices in the EU. “We want to demystify the EU regulations and make this market easier for Canadian companies to understand.” For contact information and more details, see the sidebar in this article.

Kennedy adds that her team will continue to promote all the benefits of CETA, while also looking at where CETA can be used to address new challenges and opportunities as they arise. “We’re very lucky that we have CETA. It puts us in an enviable position as compared to other trading partners, but we can’t be complacent because there is a lot of competition out there for EU attention.”

EU level procurement will continue to be an area of focus for the Mission, and she’s also excited about opportunities in digital and green technologies. All Canadian clean tech and digital products enter the EU duty‑free under CETA. Canadian service providers are also on equal footing with their EU competitors and receive better treatment than most of their non-EU competitors. These competitive advantages are especially important given the EU’s decision to focus its post-pandemic recovery efforts on key sectors that will all require major investments in digital and green technologies to support their growth.

She encourages Canadian companies to be on the lookout for opportunities in the Eureka network and the EU’s Digital Europe Programme, as well as its flagship European Green Deal. Kennedy notes that the EU “will need a wide range of innovative technology to meet its Green Deal goals,” and she urges Canadian companies to position themselves as “reliable, environment-friendly and safe suppliers and become a part of EU value chains.”

After four years in provisional application, CETA continues to serve Canadian companies in all sectors. And with utilization rates increasing at a steady pace, and Canadian exporters becoming more and more familiar with CETA, and knowing how to use it and take advantage of its benefits, it’s expected that trade between Canada and the EU will continue to grow. As always, our network of Trade Commissioners in Brussels, Paris and throughout the EU will be there to support exporters every step of the way.

Contact a Trade Commissioner, and keep reading to learn more about how the TCS and CETA can help your business expand into the EU market.