The Comprehensive Economic Trade Agreement (CETA) entered into force provisionally from 21 September 2017. This means that Irish companies may now take advantage of the all important provisions of CETA including the elimination of tariffs on almost all key exports, access to the Canadian procurement market, the easing of regulatory barriers and more transparent rules for market access. It is of interest to Irish business and consumers as it removes over 98% of tariffs. This will make imports cheaper and our exports more competitive.
New opportunities will arise for Irish business and professionals to work and provide services in Canada.
How do Irish exporters take advantage of the preferential tariff treatment in CETA?
Where can my business find practical guidance on CETA?
How will Small and Medium Enterprises (SMEs) benefit?
What are the benefits to business?
What about farmers and food producers?
How will consumers benefit?
How will CETA make it easier for European firms to invest in Canada?
How will CETA help Europe's creative industries, innovators and artists?
What is Regulatory Cooperation?
How will CETA affect people's rights at work and the environment?
What's the Joint Interpretative Instrument?
Text of CETA
Queries and further information
How do Irish exporters take advantage of the preferential tariff treatment in CETA?
From 21 September 2017, the duty rates were reduced or eliminated for the majority of EU consignments exported to Canada. If you export goods over €6,000, you need to be registered in the Registered Exporter System (REX) to benefit from CETA’s reductions in customs duty. Registered Exporters must include their REX number in their origin declaration. If the value of your exports never exceeds €6,000 you do not need to be registered, but you still have to complete an origin declaration.
To benefit from preferential tariff treatment under CETA, you should apply as soon as possible to the Origin Unit in the Revenue Commissioners for registration in REX. Further information on the REX and the application form are available on the Revenue Commissioner’s website at EU-Canada preferential origin.
You may may consult the Tariff Section in the European Commission’s Market Access Database (MADB), which provides information on import duties and taxes on exports Canada, to see if their product benefits from CETA’s preferential duty rates.
The EU Canada Comprehensive Economic Trade Agreement—What it means for Irish Exporters
Where can my business find practical guidance on CETA?
A Guide to CETA is available on the European Commission’s website which serves as a handbook on the Agreement for business.
The European Commission’s Market Access Database (MADB) provides information to companies exporting from the EU about import conditions in third country markets including Canada. This information includes product specific information that applies under CETA and practical information for EU businesses to trade with Canada such as procurement opportunities and practicalities in relation to rules of origin and certification.
Also, the Commission’s online portal Export Helpdesk provides general and product-specific rules of origin for CETA informing European and Canadian companies on the EU’s import conditions under this Agreement.
How will Small and Medium Enterprises (SMEs) benefit?
The benefits and opportunities to business in the agreement will be especially valuable for SMEs, given that trade barriers tend to disproportionately burden smaller firms, which have fewer resources to overcome them than larger firms. These include the following important benefits to business:
What are the benefits to business?
European producers, manufacturers and exporters will have unprecedented access to the Canadian market.
Removal of customs duties
The majority of customs duties disappeared as soon as CETA entered into force provisionally. This gives EU exporters an advantage over other exporters still facing Canadian tariffs.
Eventually 100% of the tariff lines on industrial products for both sides will be fully eliminated, of which 99.6% upon entry into force in the case of Canada and 99.4% upon entry into force in the case of the EU.
Canada will eliminate duties for 90.9% of all its agricultural tariff lines upon entry into force of CETA. After 7 years, the tariffs for 91.7% of agricultural lines will be eliminated. The EU, for its part, will eliminate 92.2% of its agricultural tariffs at entry into force and 93.8% after 7 years.
Customs and trade facilitation
Cost savings may be made on customs and trade facilitation, which are aimed at reducing processing times at the border and making movement of goods cheaper, faster, more predictable and efficient.
This includes issuing, upon request, advance rulings on the tariff classification of goods, the automation of border procedures where possible and providing for an impartial and transparent system for addressing complaints by operators about customs rulings and decisions.
There are provisions on transparency ensure that legislation, decisions and administrative policies, fees and charges related to the import or export of goods and governing customs matters are made public.
Trade in services
In services and investment CETA is the most far reaching agreement the EU has ever concluded. Almost half of the benefits anticipated from CETA are expected in the services sector. CETA make it easier for EU individuals and companies to provide services to Canadian customers and vice versa. It covers services such as legal services, accountancy, transport and telecom services.
There is a huge opportunity for Ireland given its strengths in services. Ireland has been particularly successful in expanding its share of the world’s services market in recent years – in fact our share has tripled in the last 15 years - and services exports account for more than half of all Irish exports.
Access to Canadian public tenders
This is one of the big gains for EU businesses from CETA. Canada has opened up its government tenders to EU companies more than with any of its other trading partners. Irish and EU firms will be able to bid to provide goods and services not only at federal level but also to Canadian provinces and municipalities, the first non-Canadian firms to be able to do so. Canada’s provincial procurement market is estimated to be double the size of its federal equivalent.
Canada has also agreed to make the tendering process more transparent by publishing all its public tenders on a single procurement website. Access to information is one of the biggest obstacles for smaller companies in accessing overseas markets, so this will help smaller businesses in Europe. While this website is in preparation there is the list of websites which you can look up for tendering opportunities in Canada on the European Commission’s website.
Avoiding costs related to double testing
The EU and Canada have agreed to accept each other's conformity assessment certificates in areas such as electrical goods, electronic and radio equipment, toys, machinery and measuring equipment.
Conformity assessment certificates prove that a product has been tested and meets the relevant technical rules and regulations and any health, safety, consumer protection or environmental standards that also apply.
This means that, under certain circumstances, a conformity assessment body in the EU can test EU products for export to Canada according to Canadian rules and vice versa.
So, for example, an EU firm that wants to sell a toy in Canada will only need to get its product tested once, in Europe, where it can already obtain a certificate valid for Canada.
This will avoid both sides doing the same test and could greatly cut costs for both companies and consumers. It will particularly help SMEs for whom paying twice for the same test can be prohibitive.
The EU and Canada are committed to continuing discussions with a view to adding new products in the future.
Labour Mobility
CETA provides legal certainty for trained workers, who temporarily enter the EU or Canada to do business. Whenever investment is liberalised, intra-corporate transferees are guaranteed access. The permissible length of stay of key personnel regardless of their sector activity is a s follows –
- intra-corporate transferees (specialists and senior personnel): the lesser of three years or the length of the contract, with a possible extension of up to 18 months at the discretion of the Party granting the temporary entry and stay;
- intra-corporate transferees (graduate trainees): the lesser of one year or the length of the contract;
- investors: one year, with possible extensions at the discretion of the Party granting the temporary entry and stay;
- business visitors for investment purposes: 90 days within any six month period;
- natural persons employed by a business or independent professionals whose presence is required on a temporary basis to fufil a service: for a period not exceeding 12 months.
CETA will make it easier for firms to export equipment, machinery and software by allowing firms to send maintenance engineers and other specialists to provide after-sales and related services.
Recognition of professional qualifications
CETA provides a transparent and consistent framework to facilitate the EU and Canada to recognise each other's professional qualifications in regulated professions and sets out the general conditions for the negotiation of Mutual Recognition Agreements of professional qualifications (MRAs). A regulated profession means a service that is subject to the possession of specific qualifications by virtue of legislative, regulatory or administrative provisions, such as architects, accountants and engineers.
The relevant regulatory bodies in the EU and Canada will have to jointly work out the technical details of recognition of their respective qualifications on the basis of the framework. The competent authorities in Canada and the EU will then approve their work and give it legal effect.
If you are in a regulated profession, you should approach your regulatory body to work towards the development of joint recommendations for MRAs in your profession. MRAs will significantly reduce administrative barriers to the movement of workers whilst ensuring that high professional standards are maintained.
What about farmers and food producers?
The EU may now export nearly 91% of its agricultural and food products to Canada duty-free. This will mean EU exports to Canada's market of high-income consumers will become cheaper.
This will create new export opportunities for Irish farmers and producers of:
- wines and spirits (Ireland’s Geographical Indicators for Irish Whiskey/Whisky and Irish cream will be protected)
- fruit and vegetables
- processed food products
- cheese
There are limited quotas for a number of sensitive products such as beef, pork and sweetcorn entering the EU and dairy products entering Canada. All imports from Canada have to meet EU rules and regulations. For example, only hormone-free meat will ever be imported into the EU. Over the years, Ireland has developed an important pigmeat export trade to Canada and now there is potential to develop the export business for Irish beef and lamb also. The removal of the Canadian 26.5% import tariff on Irish beef will be significant.
How will consumers benefit?
By opening new markets, CETA has the potential to lower prices and give consumers a wider choice of products and services. Imports from Canada will still have to satisfy all EU product rules and regulations that protect people's health and safety, social rights, their rights as consumers or the environment.
How will CETA make it easier for European firms to invest in Canada?
CETA is the first EU trade agreement to offer benefits to EU companies investing outside the EU. It will remove barriers for EU firms seeking to invest in Canada and, ensure all European investors in Canada are treated equally and fairly. It will improve the investment climate and offer more certainty to investors by not discriminating between domestic and foreign investors and not imposing new restrictions on foreign shareholdings.
It removes barriers to foreign investment, such as foreign equity caps or performance requirements. It allows EU investors to transfer their capital in Canada back to the EU, and vice versa. It puts in place transparent, stable and predictable rules governing investment and guarantees that the government will treat foreign investors fairly.
How will CETA help Europe's creative industries, innovators and artists?
CETA will help level the playing field between Canada and the EU in the area of Intellectual Property Rights (IPR). European musicians, artists, and others working in Europe's creative industries will be properly rewarded for their work.
CETA will strengthen copyright protection by bringing Canada's rules in line with EU laws for protecting new technologies and managing digital rights, improve the way Canada's IPR system protects patents for EU pharmaceutical products and strengthen enforcement.
What is Regulatory Cooperation?
CETA will establish a Regulatory Cooperation Forum to discuss regulatory policy issues of mutual interest and develop bilateral cooperation activities. By fostering cooperation earlier in the regulatory process, the Forum is expected to enhance information sharing between Canadian and EU regulators, facilitate the development of more compatible regulatory measures, resulting in fewer barriers to trade, and making it easier for the EU to do business in Canada. The Forum is a voluntary cooperation mechanism and any initiative entailing a change in EU regulations can only be introduced and pursued outside CETA, in compliance with the ordinary legislative procedure.
How will CETA affect people's rights at work and the environment?
In CETA, the EU and Canada reaffirm their commitment to sustainable development and agree that further trade and investment should strengthen, not weaken, environmental protection and labour rights.
Both the EU and Canada want CETA to help ensure that economic growth, social development, and environmental protection reinforce each other. So CETA includes the EU's and Canada's obligations under international agreements on workers' rights and environmental and climate protection.
When it comes to implementing the EU's and Canada's commitments in these areas, CETA gives a strong oversight role to civil society, including business associations, trade unions, consumer bodies, environmental groups and other non-governmental organisations (NGOs).
What's the Joint Interpretative Instrument?
The EU and Canada have also agreed a legally binding Joint Interpretative Instrument which has been added to CETA to provide further assurances in relation to public services, labour rights, environmental protection and investment.
Text of CETA
The text of the Agreement is available on the European Commission’s website at CETA chapter by chapter.
Queries and further information
If you have any queries in relation to CETA, please contact the Trade Policy Unit at email trade@enterprise.gov.ie.
Detailed information in relation to CETA is also available on the European Commission’s website at CETA in focus.
CETA committee meetings and their agendas (when available), reports and other documents in order to inform about the different steps of the CETA implementation process is available on the EU Commission’s website at CETA meeting and documents.