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Agreement comes into effect provisionally

CETA brings the EU many advantages

CETA, the free trade agreement between the EU and Canada, has provisionally come into effect. According to the calculations of the European Commission, the agreement will save European businesses 590 million euros every year. EU consumers too will benefit.

Canada is to abolish customs duties on 98 per cent of all goods traded with the EU. Consumers in the EU will enjoy a greater choice of goods with the same high EU standards applying as before. EU businesses too will have the best access to public procurement contracts in Canada ever extended to foreign companies, not only at national level, but also in Canada’s provinces and at local authority level.

Small businesses will benefit

Small companies in particular will benefit from the agreement, because they were least able to tackle the red tape formerly needed to export to Canada. In future businesses will save time and money, when, for instance, two sets of standards, lengthy customs procedures and high legal costs cease to apply.

They will be given support by the member state authorities responsible for export promotion. These bodies will help companies as they establish a foothold in overseas business, stepping up trading relations and attracting investment.

New export markets for agricultural produce

CETA will offer European farmers and food producers new opportunities as well, while offering sensitive branches in the EU full protection.

The EU has opened its markets to some extent for certain competing products from Canada. At the same time, access to the Canadian market will be improved for important European exports, including cheese, wine and spirits, fruit and vegetables, and processed items. CETA will protect 143 of the EU’s so-called protected geographical indications for high-quality regional food and drink products.

European regulations will be respected

Goods and services can only be offered for sale on the EU market if they comply with EU regulations. The procedure used by the EU to regulate food safety will not be changed by CETA. That also applies to genetically modified products and to the ban on hormone-treated beef.

The agreement improves legal certainty in the services sector. Employees within companies will enjoy greater mobility. And CETA will provide a framework for the mutual recognition of occupational qualifications.

In addition, member states will be able to organise public services at their own discretion in future. These and other matters are regulated in more detail in a joint declaration on the interpretation of the agreement, which is legally binding.

Provisional application of the agreement

Once all EU member states and the European Parliament had approved the agreement, it was signed by the EU and Canada on 30 October 2016. The provisional application of CETA begins on 21 September 2017. It applies only to matters falling within the jurisdiction of the EU. The most important exception is regulations relating to investment protection.

CETA will only come into effect in full once it has been ratified by all member states, each of which must do so in line with its own constitutional requirements.

Once CETA comes into effect in full, a new investment court system will replace the existing investor-state arbitration mechanism. This is provided for in numerous bilateral trade agreements negotiated in the past by the governments of EU member states. The new mechanism will be transparent and will not be based on ad hoc arbitration courts.

Thursday, 21 September 2017