EU and Canada agree on free trade
23 October 2013
ROME - On Oct. 18, the EU and Canada reached a political agreement on concluding an ambitious free trade agreement. Negotiations on the Comprehensive Economic and Trade Agreement (CETA) between the EU, its Members States, and Canada have continued since their launch in 2009. Honing of the agreement details will continue before it can be given final approval.
The agreement will foster economic growth and employment on both sides of the Atlantic. It is expected to increase bilateral trade in goods and services by 23 percent or by €26 billion and boost the EU gross national product by approximately €12 billion each year. The economic impacts of the agreement will become clearer once the final text of the agreement has been formulated.
"This solution demonstrates the EU's ability to negotiate. The agreement may also have a positive impact on the negotiations conducted between the EU and the United States," stated Finnish Minister for European Affairs and Foreign Trade Alexander Stubb.
The agreement is expected to significantly lower the level of tariffs in bilateral trade between the contracting parties and create new market access opportunities in services and investment. In the public procurement market, Canada will open access for European companies to engage in tenders at a regional level, and will do so to a larger extent than it has done with any other agreement partner.
In the future, negotiations will continue on the closer details of the agreement. Once these technical discussions are over, the parties will initialize the agreement. Decisions on signing the agreement and concluding it will become topical at a later date, and they will be made on the basis of the Commission proposals. In addition to the approval of all EU Member States, the agreement also requires the approval of the European Parliament.
· In 2012, Canada was the EU's 12th most important trading partner, accounting for 1.8 percent of the EU's total external trade. In the same year, the EU was Canada's second most important trading partner, after the U.S., with around 9.5 percent of Canada's total external trade.
· The value of bilateral trade in goods between the EU and Canada was €61.6 billion in 2012. Machinery, transport equipment, and chemicals dominate the EU's exports of goods to Canada, and also constitute an important part of the EU's imports of goods from Canada.
· Trade in services is an important area of the EU-Canada trade relationship. The value of bilateral trade in services between the two partners amounted to an estimated €26.8 billion in 2012. Examples of often traded services between Canada and the EU are transportation, travel, insurance, and communication.
· The investment relationship is equally important. In 2011, European investors held investments worth more than €221.6 billion in Canada, while Canadian direct investment stocks in the EU amounted to almost €137.6 billion.