Skip to main content

The Comprehensive Economic and Trade Agreement is the most significant trade deal Canada has negotiated since the North American Free Trade Agreement.

Fred Lum/The Globe and Mail

The Comprehensive Economic and Trade Agreement is the most significant trade deal Canada has negotiated since the North American Free Trade Agreement, which took effect in 1994.

CETA took seven years of negotiations to finally come together. It was supposed to be signed this year and ratified in 2017, but thanks to the precarious and unknown territory in which Europe finds itself post-Brexit, the future of the deal is now in question. Here's what you need to know about CETA, how it could affect you, and why there's a risk the landmark free-trade agreement between Canada and the European Union could fall apart.

What is CETA?

Story continues below advertisement

In 2008, Canada and the European Union issued a joint study that provided a supporting rationale for the launch of free-trade negotiations. After years of back-and-forth talks, a completed agreement was released in September, 2014, received legal approval in February, and was expected to come into effect next year.

The historic deal is designed to end 98 per cent of tariffs on traded goods the moment it kicks in, increasing to 99 per cent over a period of up to seven years. CETA also aims to make it easier for Canadians to conduct business abroad by limiting technical and regulatory barriers in the EU.

How does CETA compare with other free-trade deals?

The United States will remain Canada's No. 1 trading partner if CETA is ratified. However, the trade deal with the EU covers a broader scope of issues than NAFTA, which covers trade between Canada, the U.S. and Mexico.

Both deals reduce tariffs on goods, but unlike NAFTA, CETA opens up the government procurement market in Canada and the EU. That means European companies can bid on Canadian government projects, and Canadians can do the same in Europe.

The EU deal includes bigger trade quotas for agricultural products and extensions of drug patents in Canada. It will also cover services more broadly than NAFTA, including financial services, and allows more labour mobility, including efforts to work on recognizing each other's credentials for professionals such as engineers.

Why is CETA so important?

Story continues below advertisement

Danielle Goldfarb, director of the Global Commerce Centre at the Conference Board of Canada, calls CETA "one of the most ambitious deals that either party has ever negotiated."

"The deal extends beyond simply removing tariffs or duties between the two partners and moved into a lot of other areas that affect services, investments and barriers that are a little more difficult to see, like regulations," she said.

How would CETA affect you?

For Canadian consumers, the end of a 6.1-per-cent tariff on European imports will make German-made vehicles more affordable. Other products may become cheaper for Canadians as well, with most tariffs being eliminated. The agreement will also more than double the quota of cheese imported from the EU, meaning Canadians could find a greater variety of European cheeses at their local grocery store.

Patrick Leblond, a senior fellow at the Centre for International Governance Innovation, says the biggest benefit of the agreement for Canadians will be removing the beyond-the-border trade obstacles, including regulations that may hinder labour mobility.

What happens next for CETA?

Story continues below advertisement

The Canada-EU deal will now proceed for ratification as a "mixed" agreement, meaning it will have to be approved by each of the EU's 28 member states, the European Commission announced Tuesday.

But the deal is facing growing opposition in many countries. According to the Council of Canadians, Romania and Bulgaria have said they will vote against CETA if Canada doesn't remove visa requirements for travellers from those countries. In Belgium and Germany, regional and lower house parliaments that would have a say are opting toward rejecting the deal.

Ms. Goldfarb said the best-case scenario for Canada would be to get the agreement signed while Britain is still part of the EU, and perhaps sign a separate deal after the country's exit from the EU is complete. "If it's delayed, there's a danger Canada can lose momentum and the deal won't get signed," she said.

The European Council is expected to vote on the deal in October. Unanimous consent is required.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies