CETA Moves Forward
The Comprehensive Economic and Trade Agreement
By Ania Swiatoniowski
On October 18th, 2013, Canada and the European Union signed a tentative agreement on a significant trade deal. CETA, the Comprehensive Economic and Trade Agreement, will have impacts on a sweeping range of goods and services, including the natural resources industries and, likely, energy.
The trade deal will reduce or eliminate duties on more than 98% of tariff lines immediately upon coming into force, with the vast majority being eliminated. Remaining tariffs will be further reduced or eliminated entirely over a seven-year period. The natural resources industries figure prominently in CETA, including forestry, agriculture, fisheries, and mining.
Tariffs on forestry products will be eliminated immediately when CETA goes into effect. Included in this are wood products such as plywood and prefabricated buildings. Current tariffs on forestry products average 1.2% with a peak of 10%. Canada is the fifth largest exporter of wood panels.
Metals and Minerals
Canada exported on average $20 billion annually in metals and minerals to the EU in 2010 through 2012. Current tariffs on metals, metal products, and processed mineral products (such as petroleum oils) will be eliminated when CETA comes into force. Most raw minerals are already exported to the EU duty-free.
Canada exports to the EU an average $400 million annually in fish and seafood with tariffs averaging 11% and peaking at 25%. Upon entry into force, 94% of tariff lines will be duty-free and 100% will be duty-free within seven years. CETA will require the lifting of certain minimal protections for Canadian fish processors.
CETA will eliminate 93% of tariff lines immediately. This includes wheat, barley and other grains, fresh and frozen fruits and vegetables, maple syrup, and many more food items. Canadian beef, pork, and bison will receive preferential treatment and be exported duty-free up to specified quantities.
CETA also addresses non-tariff barriers to trade such as investment, intellectual property, mobility and qualifications of labour, cross-border trade rules for services, amongst others.
There is no “Energy” section in CETA as there was in the NAFTA deal. The energy industry is mentioned in papers released by both governments, but in no detail. Passing reference is made to procurement competition of energy services and how changes in investment rules could be beneficial to the energy, mining, and renewable energy sectors, but no more. Also noticeably absent is any mention of fossil fuels –notably the Tar Sands– and to environmental standards in energy production.
More details to come
The terms of CETA have not yet been made public. The “summaries” released by each government are little more than bullet point lists and lack significant detail. Furthermore, while some parts of CETA need fine-tuning, other parts of the agreement have yet to be drafted and the technical details finalized by negotiators.
While there is a possibility that foreign worker arrangements may begin provisionally in the near future, it is unlikely that other aspects of the deal will come into play before CETA can come into force, projected to be 2015. CETA has been on the negotiating table since 2009.
FOR MORE INFORMATION
Technical Summary: Government of Canada’s official release of CETA summary:
The European Commission: Trade with Canada, information on CETA deal:
This feature originally appears in the Winter 2013 edition of Resources Quarterly.
Click here or on the cover to view the entire issue.