by Katelyn Petersen and Benno Weissner
The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) has been in place since autumn 2017. Three years into the Agreement, we can already see some of the huge benefits the Agreement has brought to European and Canadian Small and Medium-sized Enterprises (SMEs). German Network adviser Benno Weissner from ZENIT/NRW and Canadian Network adviser Katelyn Petersen guide you in discovering everything you need to know about CETA.
Opening new horizons
The cooperation with the new Enterprise Europe Network international partner in Canada (EEN-Canada) offers countless opportunities for both European and Canadian SMEs to build cross-border business relations. It does so by initiating new fruitful contacts, providing information on markets and regulations, and assisting in finding business partners. Canada has proven to be a very exciting market for export-oriented European companies. Similarly, many innovative Canadian companies offer real benefits for the European economy thanks to their products.
The EEN-Canada team recently took part in an online conference, hosted by the Canadian Trade Commissioner Service, where Canadian SMEs shared their experiences with CETA and described how they benefited from entering the European market. The examples ranged from salted fish to cutting-edge technologies, and it became clear that for almost every SME with international ambitions, CETA represents a great opportunity. EEN-Canada would like to refresh your knowledge of CETA, as well as other supportive services that are available, in the hope that more companies will take advantage of this great trade agreement.
The key benefits for SMEs
The eight key benefits that CETA provides for European and Canadian SMEs are as follows:
- Goods (e.g. tariffs) – CETA removes 98% of all tariffs that were previously in place. This will save companies billions in euros/dollars and allows SMEs a much easier and more competitive entry into each other’s respective markets. Consumers, on the other hand, benefit from more competition and a broader choice of products.
- Labour mobility – CETA introduced a concept called Temporary Entry. This makes it easier for short-term business visitors, intra-company transferees, investors, contract service suppliers, and independent professionals to conduct business in Canada and vice versa.
- Investment – The trade agreement removed caps for foreign investments. It further allows EU investors to transfer their capital in Canada back to the EU, and vice versa. In addition, CETA established predictable rules that govern and protect investments. For example, CETA prohibits Canada from discriminating against EU investors in favour of Canadian investors or investors from a third country. Investors also enjoy increased protection from expropriation or the nationalisation of their investments.
- Public Procurement – EU companies are now able to bid on Canadian public contracts and vice versa.
- Services – Whenever people think about trade agreements, physical goods often come to mind first. However, CETA also significantly reduces cross-border restrictions on trading services. Services make up three-quarters of Europe’s economy. The fact that many of them are now easily exportable to Canada creates manifold new opportunities for European SMEs.
- Conformity Assessment – The CETA Protocol on Conformity Assessment establishes a framework for the acceptance, by Canada and the EU, of product certifications/testing in certain product categories by recognised bodies in the other party. This means that a designated conformity assessment body in the EU can test EU products for export to Canada according to Canadian rules and vice versa. This will dramatically reduce costs of doing business and will be particularly helpful to SME’s on both sides of the Atlantic.
- Mutual Recognition of Professional Qualifications – CETA has created a framework that would allow Canada to recognise professional qualifications earned in the EU and vice versa. This means that professionals, such as accountants, architects, and engineers on both sides of the Atlantic could practise in each other’s territory. CETA has assigned the relevant professional bodies and authorities in the EU and Canada to negotiate a proposal on so-called mutual recognition that can then be integrated into CETA.
- Environmental Protection – The trade agreement also includes a chapter on the environment. The parties committed to help ensure that trade and environmental protection are mutually supportive and reinforcing. CETA ensures that domestic environmental laws can be enforced and that the parties will promote public awareness and transparency for those laws. CETA also aims to advance sustainable resource management and includes a general commitment to maintain high environmental standards
How can the Enterprise Europe Network help?
In its role of supporting SMEs and helping them thrive, the Network can help companies with questions regarding the Canadian market (size, structures). It can ease entry into the new market by providing information on taxes and regulations. Furthermore, it can support you with its tailored partnering services related to business contacts, such as distribution partners. Finally, networking and technology transfer events are excellent ways to kick-off and encourage common proposals for cross-border projects.
Canada just recently became part of the Enterprise Europe Network in June 2020. While the Network is a well-known resource for European companies who are interested in entering the Canadian market, there is also a unique supportive service in place that many European companies may not know about – the Canadian Trade Commissioner Service. The Canadian Trade Commissioner Service is a network of more than 1000 trade professionals working in Canadian embassies, high commissions, and consulates around the world. Some of these trade experts are also distributed across Canada, and many of them have thorough sector- and regionally-specific knowledge when it comes to trading goods and services.
Thanks to CETA and the Enterprise Europe Network Canada partner, starting to trade between Canada and Europe could not have become easier.
About the authors
Katelyn Petersen is the Executive Director of the German-Canadian Centre for Innovation and Research (GCCIR). Prior to assuming her role at
the GCCIR in 2014, Katelyn worked as Regional Coordinator for Europe at the University of Alberta International, where she managed the university’s partnerships and initiatives with European institutions. Katelyn completed a Doctorate in contemporary German literature in 2013 at the University of Alberta and the Ludwig-Maximilians University in Munich.
Benno Weissner has been working for the Enterprise Europe Network for more than 12 years. He is an expert in advisory services and international partnering. He also worked for the German National Contact Points (NCP) for ICT. He is a member of the Network’s group of experts in ICT.
*This blog post was also published on the Enterprise Europe Network’s blog here.