In October 2013, it was announced that Canada and the EU had
reached an agreement in principle with respect to the
Canada-European Union Comprehensive Economic and Trade Agreement
(CETA). CETA is intended to co-exist with other trade agreements
including the Trans-Pacific Partnership (TPP). CETA is Canada's
largest trade initiative since NAFTA and provides Canadian
exporters preferential access to the EU, which is a bigger market
than the U.S. and Mexico put together.
When CETA is implemented, tariffs will be lowered or eliminated
on a wide range of agricultural products including wheat, fresh and
frozen fruits and vegetables, maple syrup, processed pulses and
grains, oils, and others. CETA will also provide new market access
for Canadian agricultural exports such as beef, pork, and bison.
Only goods made in Canada or in the EU will benefit from
preferential tariffs. Accordingly, there are mechanisms to address
whether a product is in fact Canadian or EU in origin.
Much has been reported on the impact of this trade deal on
Canada's supply management industries. Some producers and
organizations have voiced concern that the increase in market share
for European cheese and milk concentrates granted as part of CETA
and TPP will lead to income loss and permanent loss of market
position. In response to some of these concerns, the previous
federal government announced new programs to compensate producers
and processors in supply managed industries for the new market
access granted to foreign producers. However, the current
government states that it is reviewing this compensation package,
but has committed to providing a compensation package for the
On February 29, 2016, Canada's Minister of International
Trade, Chrystia Freeland, and the European Union's Commissioner
for Trade Cecilia Malmström announced the completion of the
legal review of CETA. The legal text was recently finalized,
representing a large step forward to ratification and
implementation. The recent "Brexit" referendum
result has created uncertainty as any ratification may be pushed
down the agenda as the European Union begins to grapple with the
ramifications and mechanism of any exit of one of its larger member
states. Furthermore, Canadian exports to the United Kingdom
dominate trade with EU countries. However, Chrystia Freeland has
recently stated that CETA is moving forward and expects
ratification to occur before any withdrawal of the United Kingdom
from the EU.
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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.
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