Canada: Canada-EU Comprehensive Economic And Trade Agreement (CETA) Now Moving Quickly Towards Implementation

After almost ten years of preparatory work and negotiations, Canada and the European Union are now quickly moving towards implementation of the Comprehensive Economic and Trade Agreement (CETA). CETA is the most intensive and wide-ranging international trade and investment agreement completed by either party. It is often touted as the first in a "new generation" of trade agreements designed to address perceived weaknesses of past deals, including those relating to sustainable development, labour and environmental standards. The successful implementation of CETA will be a significant accomplishment in the face of growing populist and anti-globalization movements that have caused the collapse of the Trans-Pacific Partnership Agreement (TPP) and are threatening progress on other ambitious trade initiatives such as the US-EU Transatlantic Trade and Investment Partnership (TTIP).

On February 15, 2017, the European Parliament voted to ratify CETA. Simultaneously, Bill C-30 – An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures – passed third reading in Canada's House of Commons and is on track to quickly pass through the Senate. It is anticipated that CETA could come into force provisionally as early as May of this year.

If they haven't already, companies should be carefully considering the opportunities and threats CETA creates for their domestic and international markets and developing an effective strategy to address the new trade and investment dynamic. The following is intended to provide an overview of the key features of CETA, the process for implementation, and its timelines. In the coming weeks, we will be providing a more in depth look at the different aspects of CETA, including a more detailed analysis of the new government procurement regime and the novel investor-state court process.


The successful negotiation and implementation of CETA reflects two of Canada's key priorities – foreign investment and international trade in goods and services. The agreement between Canada and the EU opens up one of the world's largest markets to Canadian exporters, investors, and service providers. As a modern agreement, it abolishes tariffs, makes strong commitments to open access for foreign service providers, and takes major steps in simplifying compliance with regulatory standards and practices.

We have set out below a very brief summary of the key areas of CETA.

Trade in Goods & Services

CETA will see tariffs permanently removed from over 98% of all goods. Some of the changes will be implemented over a staggered period of time, for example, tariffs on certain vehicles, ships, and agricultural products. This process will be complete by 2024 – with the only tariffs remaining in place largely being those related to supply managed goods.

CETA also provides EU suppliers with access to Canada for certain supply managed goods - most notably a near doubling of the quota for EU cheese. For its part, the EU has provided greater access for Canadian pork and beef producers in its own markets

Given Canada's strong service based economy, CETA's commitment to providing broad and open access to the service sectors is of critical importance. Unlike the World Trade Organization's General Agreement on Trade in Services (GATS), CETA follows a "negative list" approach – that is, the commitments the parties make are universally binding unless a service (such as legal services) is explicitly excluded or limited.

The market access commitments apply to both "in country" provision of services and to cross-border provision of services. This means that it is now easier for a Canadian service provider to both engage with and assist EU customers from a Canadian base of operations and allow them to deploy personnel and resources in the EU to assist customers "in country".

Technical Standards & Labour Mobility

One of the more interesting aspects of CETA is its focus on non-tariff barriers to trade (NTBs). In many cases, regulatory requirements and technical standards applied post-entry are protectionist in nature and effectively act as NTBs. Similarly, having to comply with divergent regulations that appear substantively identical but contain a few significant differences, can require companies to establish separate production facilities and lines to ensure full global compliance. This also increases costs by limiting economies of scale.

CETA takes steps to tackle this issue by requiring Canada and the EU to observe and enforce the Protocol on the Mutual Acceptance of the Results of Conformity Assessment. This will require governments to recognize a finding by regulators of the other party regarding a conformity assessment of that product with the regulations of that other party. This streamlines the assessment process. However, this does not mean that Canada and the EU will have a single set of regulations. Products that are to be sold in Canada must still meet Canadian regulatory standards. That said, Canada and the EU have committed to unifying their regulatory structures and engaging in negotiations and consultations to this end.

CETA also provides a mechanism to allow professional regulatory bodies to set up mutual recognition of certifications or licenses. The new mechanisms do not automatically provide for mutual recognition, but provide a framework to allow the parties to negotiate such agreements on an expedited basis and along a standard pattern. Certain professions, such as architects, have already indicated an intention to avail themselves of this process.

Labour mobility is also a major commitment under CETA. While general and low-skilled labour is not covered by CETA obligations, CETA allows for additional rights of entry for independent professionals, business visitors, and intra-corporate transferees. Canada and the EU have also committed to not maintaining numerical restrictions or economic needs tests for the temporary entry of businesspersons.

Government Procurement

Commitments to open and fair government procurement have been a standard component of Canadian free trade agreements since NAFTA. The commitments made in this area under CETA are comparable to those Canada has already agreed to under the WTO's revised Agreement on Government Procurement.

However, the key for both sides in these negotiations was not so much the specific commitments themselves, but rather the entities to which those commitments apply. Canada and the EU have, to an unprecedented degree, extended the scope of the commitments to a wide array of sub-federal entities. Broadly speaking, this includes provincial government entities, hospitals, municipalities, utilities, and a wide range of provincial and federal crown corporations. As a result, CETA effectively liberalizes public procurement markets worth more than $3 trillion.

Importantly, many of these commitments, including those providing access to speedy dispute settlement and against bias in technical specifications, are open to both Canadian and EU suppliers. If you are seeking to supply governments in any Canadian or EU jurisdictions, understanding your rights and remedies under CETA will be critical to protecting your interests.

Intellectual Property

CETA contains broad commitments regarding the protection of intellectual property. This includes commitments on copyright, trade-marks, and patents. The two most notable features of these commitments include Canada's agreement to more than twenty new "geographic indicators" (GIs) and the parties' commitment to a two year "patent restoration" process.

The first provides strong new protections for producers of geographically significant foods - for example, Prosciutto di Parma, Roquefort, or Parmigiano Reggiano. These items will now have additional protection against imitator products that either do not originate in the indicated region, or which are not made using the guidelines recognized by the region for the good to be officially sanctioned.

The second provides additional length of patent protection for pharmaceutical products under certain conditions. This additional protection can "restore" up to two years of the patented term for novel pharmaceuticals. It is meant to compensate for time required for clinical trials and testing during which the patent "clock" would otherwise be running.

Investment Protection

A feature of many, if not all, modern trade agreements, investment protection is designed to promote foreign investment. The investor-state provisions of the CETA investment chapter are largely functionally inoperative1 until final ratification and their inclusion remains one of the most controversial elements of CETA. Canadian investors in the EU, and EU investors in Canada, benefit from guarantees to fair and equitable treatment, protection against expropriation without compensation, and guarantees that they will not be required to use domestic labour or other inputs.

The process originally outlined in CETA was already one of the most transparent in existence and also the most forgiving towards government action. As a result of changes negotiated in February of 2016, the investor-state dispute mechanism under CETA relies on a new "investment court" process in which all judges are screened and chosen by the governments. This process replaces the previous ad hoc arbitration system used in Canada's other trade agreements in which investors had equal right to choose arbitrators to ensure an impartial hearing.


The ongoing implementation of CETA is neither simple nor complete. However, recent steps by both the European and Canadian Parliaments indicate that the agreement is likely to be implemented sometime in the Spring of 2017.

EU Implementation

On January 24, 2017, the International Trade Committee of the European Parliament voted in favour of approving CETA. This was followed on February 15, 2017 with a vote by the European Parliament in favour of ratifying CETA. However, EU implementation does not end here. The EU, through a Proposal adopted on October 2016, recognized that different parts of CETA fall within the competency of both the EU and the individual member countries. Elements within the competency of the member countries include segments of the investment protection chapter, portions of the financial services chapter, and certain intellectual property protections.

For final ratification and implementation, each of the EU member countries must vote to ratify the agreement. Until the EU member states implement CETA themselves, CETA cannot enter into force permanently. However, it is hoped that the benefits of provisional approval may put additional pressure upon the member countries to ratify the agreement for fear of losing all the benefits they have experienced.

Canadian Implementation

The Canadian government began its implementation process with the introduction of Bill C-30 in the House of Commons. The federal legislation includes not only complete incorporation of CETA into Canadian federal legislation, but it makes a slew of changes to a number of federal laws to give full effect to Canada's commitments under CETA.

On February 14, 2017, Bill C-30 passed through third reading in the House and has moved to the Senate. It is expected that it will receive a very positive reception in a Senate that is controlled by appointees of the Liberal and Conservative parties, both of which strongly support CETA. The government is targeting Spring of 2017 for final implementation and royal assent.

However, even after Bill C-30 receives royal assent, there will be certain elements of CETA that require provincial commitment and implementation. For example, the provinces have agreed to provide considerable access to provincial government procurement. Given the division of powers between the federal and provincial governments, this cannot simply be imposed by the federal Parliament. Therefore, until the provinces have enacted their own commitments, it is hard to see how CETA will be fully implemented. For example, in Ontario there has been no substantive debate and no explicit implementation act to implement Ontario's commitments.


With Bill C-30 through the House of Commons, and the recent approval of CETA by the European Parliament, CETA is now an imminent reality. At a time when political movements attacking international order, globalization and trade are gaining strength, CETA will create one of the largest free areas in the world. CETA provides a firm foundation for Canadian firms to diversify risk over a global customer base and supply chain, and attempt to remedy what some have viewed as overdependence on US markets.

CETA also puts Canada in a potentially enviable position as a destination for foreign investment. If recent indications are true that Canada will not suffer as much as initially anticipated with the "tweaking" of NAFTA by the Trump Administration, it stands to be in the best position of any of the major trading partners of the United States. With its continued outward looking policy in the negotiation of trade and investment agreements, Canada has the potential for establishing itself as an attractive springboard for access to US markets.

In the coming weeks and months, the International Trade and Investment Law Group at McCarthy Tétrault will issue in depth analyses of the key CETA components and continue to monitor and report on other important developments in international trade and investment.


[1] The substantive obligations of CETA with regard to the protections of foreign direct investment will be operative. However, the investor-state enforcement mechanism will be inoperative. It is also unclear whether these obligations will ever be implemented. The host country of an investor can use the government-to-government dispute settlement mechanism in Chapter 29 to challenge a measure, but this requires an investor to convince their host government to actively pursue a claim, provides for little control over the process for the investor, and has no possibility of damages payments to the investor. Taking into account these weaknesses, the obligations are of only limited value until full implementation of the investor-state court system.

To view original article, please click here.

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.

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
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 you may opt out by clicking here

    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.

    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.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    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.

    By clicking Register you state you have read and agree to our Terms and Conditions