Both businesses and consumers will benefit

CETA before the Cabinet Both businesses and consumers will benefit

Practically no more customs duties on industrial products, easier access to the Canadian market, lower costs for European companies – the German government supports CETA, the Comprehensive Economic and Trade Agreement with Canada, because freer trade will help underpin prosperity and jobs in both Europe and Canada.

The flags of Canada and the EU beside the word CETA

The benefits for the EU and its member states are huge: the agreement will eliminate practically all customs duties

Photo: picture alliance / Klaus Ohlenschläger

The German government is strengthening the transatlantic partnership and expanding free trade. The Cabinet has now decided that Germany will sign the Comprehensive Economic and Trade Agreement between the EU and Canada (CETA).

Myriad investment and commercial relations already link Europe and Canada. The EU is Canada’s second largest trading partner, after the USA. This trade deal will take the already good European-Canadian relations to a new level. Both businesses and consumers will benefit, because free trade generates growth and jobs.

CETA: Comprehensive Economic and Trade Agreement
The EU and Canada negotiated the terms of the Comprehensive Economic and Trade Agreement (CETA) between 2009 and 2014. It is intended to help reduce existing customs duties and improve access for both sides to markets for goods and services. The European Parliament and the European Council still have to approve the agreement. Then the process of ratification can begin in member states.

Fair rules – high standards

Agreements like CETA help to make globalisation a positive force. It is synonymous with global trade governed by sustainable, fair rules and high social and environmental standards.

The benefits for the EU and its member states are huge: the agreement will do away with practically all customs duties, saving European exporters up to 470 million euros a year. EU-based businesses will also be granted easier access to public procurement contracts in Canada and to Canada’s markets for services and investment. That will create and secure a great many jobs.

CETA for the first time anchors modern investment protection with transparent, public investment courts. In the social and environmental sectors it protects European and Canadian standards – from regional specialities to basic public services and cultural diversity.

Signing the agreement is a demonstration that the EU can continue to actively shape important aspects of the economy and free trade, and that it will do so in future. The EU is setting standards for other free trade agreements with CETA.

German Bundestag has a say

On 22 September the German Bundestag debated CETA, and came out in favour of signing the agreement and of its provisional application. It did, however, recommend modifications and called on the German government to work for these within the EU. Arrangements between the EU and Canada relating to CETA, for instance, ought to be enshrined in legally binding declarations.

The German government has acted on this. Recently the EU Commissioner for Trade, Cecilia Malmström, and Canada’s Minister of International Trade, Chrystia Freeland, expressed their readiness to agree on further clarifications.

Where do we go from here?

A formal decision must now be taken by all 28 member states with written documents sent out to all member states. The agreement is then to be signed at the EU-Canada summit scheduled for 27 and 28 October, after which the European Parliament will consider and approve the agreement. The sections of the agreement for which only the EU is responsible can then be provisionally applied, preferably in the first half of 2017.

None of the other sections of the agreement can be provisionally applied. Before the agreement as a whole can come into effect it must be ratified by all member states in line with their own national constitutional law provisions. This procedure is expected to take several years.

CETA is a hybrid agreement
The German government has always seen CETA as what is known as a hybrid agreement, i.e. parts of CETA fall within the sphere of responsibility of the EU member states. Alongside Canada and the EU, the EU member states are themselves parties to the agreement. That is why all national parliaments must also approve CETA.