Canada: Canada And European Union Agree To Comprehensive Economic And Trade Agreement

Last Updated: September 5 2014
Article by Patrick Gervais

Canada and the European Union (EU) reached an important milestone on August 5, 2014, by agreeing to a draft trade agreement (CETA) now undergoing legal review. This brings Canada one step closer to a historic agreement that would significantly reduce tariffs on goods and services exported to the European market. Canada would access the largest economic block in the world with significantly reduces tariffs while the EU would gain easier access to the North American market via Canada. Once implemented, the agreement is expected to initially increase bilateral trade by 20% and boost Canada's economy by $12 billion annually. The tentative date of implementation is 2016, if there are no further hick-ups in negotiations.

Eliminating Tariffs

CETA will open up the EU market to Canadian businesses by eliminating about 98% of all EU tariff lines. 100% of non-agricultural tariff lines and close to 94% of agricultural tariff lines would be eliminated. While almost all tariff lines would be eliminated immediately once CETA comes into force, 1% of tariffs would be eliminated over a period of up to 7 years. Certain tariffs would be subject to a phase out period, for example tariffs relating to fish and seafood products, grains, and passenger vehicles. CETA also provides protection against other kinds of restrictive trade measures that could be applied to reduce or nullify market access gains through the elimination of tariffs, including ensuring equal treatment between the parties by providing "national treatment" on goods in each respective market.

Made in Canada Requirements

CETA also provides clear rules to determine which goods are considered "made in Canada" and eligible for preferential tariff treatment, including production requirements to meet this standard. In addition to rules of origin, CETA aims to streamline exporting procedures and reduce red tape at borders. Provisions including simplifying and automating border procedures and providing an impartial and transparent system for addressing complaints about customs rulings and decisions.

Regulatory Requirements

CETA also proposes to streamline regulatory requirements between the EU and Canada. Provisions include mutual recognition of technical regulations in each respective market and acceptance of test results on products by each respective certification body. This would reduce administrative costs and allow for coherent product launches in both markets. Parties from each market would also be able to participate in the development of technical regulations.

Trade Remedies

With regards to trade remedies implemented by governments to protect domestic industries against unfair pricing and unfair government subsidies practices, CETA reflects WTO rules that require a country to undertake a fair and transparent investigation to determine whether unfair trade is taking place before a country imposes a trade remedy. If a trade remedy is implemented, a country must do so only in a fair and transparent manner by disclosing all essential facts under consideration and allowing parties to fully defend themselves.

Investments, Industries and Services

CETA's investment rules set out how investors and their investment must be treated by the host country. There are commitments to treat investors and investments fairly, equitably and no less favourably than domestic or foreign investors. The process that investors follow for compensation is called an "investor-to-state dispute settlement" (ISDS) and would involve an independent arbitral panel hearing facts and opining on the merits of an investor's claim. This is a point of contention and there are rumours Germany is pushing back on CETA because of the mechanism of this ISDS.

CETA would also apply to services. However, certain services said to be fundamental to our social fabric would be excluded, for example health care and public education. A corollary to its applicability to services, CETA seeks to streamline the development of agreements between Canadian and EU regulatory bodies for the recognition of professional qualifications and for a greater mobility of skilled labour. This is the first time a free trade agreement signed by Canada would include substantial provisions on the mutual recognition of professional qualifications.

Government Procurement

One key benefit to Canadian companies will be access to opportunities in the lucrative EU government procurement market. CETA would only apply to high-value procurement contracts in order to ensure that governments can continue to use procurement to support local development, especially for small and medium-sized enterprises. The threshold-value for procurement contracts in CETA will range from $205,000 to $7.8 million for the 2012-2013 biannual cycle, comparable with Canada's thresholds in the WTO. Canada has also agreed to broad inclusion at its federal, provincial and municipal levels, which will help procurement processes to be carried out in an open and transparent manner to ensure greater competition for public works projects. Important exceptions are set out in CETA's government procurement rules for sensitive industries including culture, aboriginal affairs and defence.

Intellectual Property

CETA echoes the recent Copyright Modernization Act, which supports advances in technology and international standards and brings Canada in line with the World Intellectual Property Organization Internet Treaties. Geographical indications provide exclusive rights for a product based on its geographical origin in cases where origin is considered to confer a particular quality or character to the product, such as terroir products or geographical indications for wines and spirits in Europe.

Dispute Resolution

The aim of the CETA dispute resolution provisions is to provide improved, expedient and affordable settlement processes. The proposed state-to-state dispute settlement provisions set out rules to deal with trade disputes based on the WTO Dispute Settlement Understanding model, but include certain improvements such as a more robust voluntary mediation mechanism when compared to Canada's previous trade agreements, a more streamlined and expeditious process when parties chose arbitration, and an accelerated arbitration procedure for cases requiring urgent resolution, for example in the case of perishable or seasonal products.

Sustainable Development, Labour and Environment

Rather unique to the CETA is the emphasis on practices to promote economic, social and environmental objectives. It includes a framework to facilitate cooperation at various levels and establishes shared commitments to promote trade in a way that contributes to the objectives of sustainable development. CETA would also create a forum for civil society organizations to discuss the sustainable development aspects of trade relations between Canada and the EU.

CETA ensures that national laws and policies provide protection for the fundamental principles and rights at work, including the right to freedom of association and collective bargaining, the abolition of child labour, the elimination of forced or compulsory labour, and protection against discrimination. CETA establishes civil society advisory groups to provide views and advice on any matter related to the Agreement's provisions on labour and creates a mechanism through which the public can raise concerns about labour issues related to these provisions. CETA also encourages cooperation between the parties with regards to labour issues, including through information exchanges and international forums.

CETA also includes environmental provisions and aims to enforce strict environmental laws and compliance with environmental standards. CETA recognizes the importance of managing forests, fisheries and aquaculture in a sustainable way and also includes commitments to cooperate on trade-related environmental issues of common interest, such as climate change and conservation, and the sustainable use of natural resources.

The Next Steps

CETA is an ambitious endeavour that has reached another milestone. However, as legal review commences, negotiations will undoubtedly lead to changes to the current CETA. Already, rumours that Germany will not support the current CETA because of the investor-state dispute settlement provision illustrate the potential pushback ahead. Several special interest groups have also been vocal about losing preferential treatment in their national markets. However, if and when implemented, CETA would benefit consumers in both markets by increasing trade, competition, ideas and innovation between both markets.

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

Click to Login as an existing user or Register so you can print this article.

Patrick Gervais
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.