EU and Canadian leaders signed the Comprehensive Economic and Trade Agreement (CETA) in Brussels on October 30. The deal brings a substantial reduction in EU-Canada trade barriers, including the removal of 98% of tariffs, and is estimated to increase trade by 20%.
The Consider Canada City Alliance (CCCA), a group of economic development organisations from Canada’s 12 largest cities, congratulated the government on investing in the country’s future by opening trade. In celebration of this groundbreaking deal it issued a CETA Top Five list that outlines the benefits of investing in Canada through CETA.
First, monetary gain: the deal is projected to generate C$12bn in Canada and €12bn in the EU. Second, it builds on the market access granted by NAFTA, providing preferential access to nearly a billion consumers. Third, it improves investor protection through ensured transparency. Fourth, it removes some investment restrictions. Finally, Canada’s trade policies stand in contrast to the protectionist sentiment that has been growing in some developed economies.The success of CETA stands apart from the failure of other major anticipated free trade agreements like the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership, which were proposed between the US and Asia-Pacific countries and the US and EU, respectively.
The deal seems poised to lay the groundwork for future trade agreements. It might be used as a model to negotiate trade between Canada and a post-Brexit UK, or even as a template for the formation of the UK-EU trade deal.
Not all share the optimism of the CCCA. Opponents of the deal assert that it chiefly benefits multinational corporations and could harm citizens by easing protections on workers’ rights and environmental regulations. These sentiments sparked protests across Europe and Canada.
Notably, Wallonia, the French-speaking region of Belgium, single-handedly held up the ratification process of CETA until just a few days before it was signed. Walloons have suffered a sharp increase in unemployment over the past decade and are wary of the effects the new free trade deal could have on their local economy. An addendum was granted at the last minute to address the Walloons’ concerns, and CETA was successfully passed.
Despite these hiccups, the agreement moved forward and Canadian organisations have announced they are ready for business. “Our economic prosperity is built on global trade and investment,” said CCCA chairman Carl Viel.