It is likely seen as early days given the very recent
announcement of the intention of the EU and USA to conduct
“free trade” or “economic and trade”
agreement negotiations, but with the near advent of CETA, recent
protestations aside, what does this mean for Atlantic trade? The
third, and ever more powerfully growing member of NAFTA, Mexico,
already has a free trade agreement with the EU to twin with NAFTA.
How will the existing Mexican deal and the initiation of
negotiations of an EU-USA deal promote and affect the final outcome
of the CETA negotiations? How will the jigsaw pieces in place, and
those being negotiated, fit together to form the future of Atlantic
trade and investment?
Critical to the interweaving of the NAFTA, CETA and USETA are
the applicable Rules of Origin governing free(r) trade. To the
extent that there are differences in the applicable Rules, this may
enhance origination/production site selection in one country or
area over others. Should they be negotiated to permit cumulation,
for example US produced goods qualifying as NAFTA originating being
considered originating in the country of export (either Mexico or
Canada) for CETA or Mexico–EU treaty purposes, the production
site decision will become more flexible though the analysis could
become extremely complex. This could be made even more complicated
by phasing in provisions relating to eventual duty free treatment.
Perhaps more important will be the treatment and dovetailing of
non-tariff barriers, including language and sizing for labeling
purposes and product regulation. Resolving differences on an
Atlantic basis could be a monumental task.
Of course free trade is not only about goods — it usually
covers investment, services, mobility, procurement, and other
elements. Each of these will have to be analyzed by business to
determine decisions including production and distribution site
location, investment and tendering priorities and staffing issues.
Simply put, an Atlantic treaty zone will have a huge impact on any
business located in, or doing business in, the EU or NAFTA
The future of Atlantic trade and investment is about to take a
very interesting turn. Some may feel that a positive outcome of the
negotiations is unlikely in the foreseeable future. I prefer to be
more optimistic. If anything, the world is becoming smaller as a
result of business decisions — it’s only fitting that
governments catch up by implementing trade/investment structures
that reflect this.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
While that agreement mandated export measures on Canadian softwood lumber exports destined for the United States, it also protected those lumber exports from the potential imposition of onerous import measures by the U.S.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).