Canada & The EU: Setting The Pace On Reducing Tariff Barriers

Canada & The EU: Setting The Pace On Reducing Tariff Barriers

October 23, 2013
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Late last week, Canada and the European Union announced a political agreement on the key elements of a bilateral free trade agreement that will be used by negotiators for both countries to settle all the remaining technical issues.

The “Comprehensive Economic & Trade Agreement” as it is being called is expected to boost two-way trade by 23% and will be Canada’s biggest trade agreement ever.

This is of particular interest to those of us heavily involved in transatlantic trade promotion as it is illustrative of what may and may not be achieved in the Transatlantic Trade and Investment Partnership the EU recently began negotiating with the United States.

Key elements of the draft agreement include:

  • 99% of all tariff lines will be eliminated on all industrial goods.
  • Most tariffs on agricultural goods will also be eliminated as well and special consideration will be given to imports of EU dairy products and exports of Canadian beef, pork and sweet corn.
  • Canada will also recognize a list of EU car standards making it much easier to import cars from the EU toCanada.
  • Non-tariff barriers are also being evaluated so that there will be total transparency between the standard setting bodies in both locations.
  • In the area of services, existing barriers such as citizenship or residency requirements, temporary entry restrictions, and ownership and investment will also be reduced or eliminated.
  • It will also be easier for companies to move staff temporarily between the EU and Canada.
  • All barriers to investment both horizontally and in specific sectors will be removed while preserving the right of each side to regulate and implement their public policy objectives.
  • When it comes to government contracts, both sides have agreed to bilateral opening of their procurement markets with full transparency.
  • Finally the Canadian protection of intellectual property rights will be brought closer to the level of the EU, benefiting the pharmaceutical sector and exporters of agricultural products of specific geographical origin.

What is most important to recognize here is the joint effort being made to open both markets to the products of the other while making every effort to protect the integrity of the producers in each market.

In this age of 24/7 communication and the ability to connect instantly with everyone worldwide, this agreement, when it is approved, may very well be the framework upon which additional bilateral trade agreements are patterned.  In the interdependent world in which we live, maintaining traditional barriers to trade have clearly outlived their usefulness and new paradigms such as this one cry out for development and acceptance.

Former US President Ronald Reagan once said “There are no constraints on the human mind, no walls around the human spirit, no barriers to our progress except those we ourselves erect.”  It seems as though Canada and the EU have taken this to heart.  Hopefully the rest of the world will do so as well