What is CETA and how can it benefit my business?

Origin Calculation | 19 September 2018

Here, we'll take a closer look at the Comprehensive Economic and Trade Agreement - CETA - between the EU and Canada.


The European Union and Canada have a lengthy history of economic cooperation, with statistics regularly showing that the EU represents one of Canada's biggest trading partners in goods and services.

However, by the late nineties, the two blocs were on the lookout for an easier way to export and import between themselves that would benefit businesses as well as governments.

The result was the Comprehensive Economic and Trade Agreement - CETA. Let's take a closer look at this relatively new deal and how it applies.

History and implementation

Canadian prime minister Stephen Harper and European Commission president Jose Manuel Barroso signed an agreement in principle in October 2013 and further negotiations were concluded in August 2014.

The trade agreement was officially presented at an EU-Canada Summit in Toronto in September 2014 and CETA entered into force provisionally on September 21st 2017.

Most of the agreement now already applies, but CETA will be decreed fully implemented once all EU Member States have ratified the deal according to their respective constitutional requirements. All that is left to do, therefore, is for the EU parliaments to vote and approve CETA.

What does CETA do?

With the implementation of CETA, 98 per cent of the tariffs that existed between the EU and Canada were removed. This boosted trade and investment by saving businesses the €590 million a year that they had previously been paying in tariffs on goods exported to Canada.

The deal also makes business operations easer by abolishing the need for customs duties, goods checks and a number of other pieces of red tape that existed before.

Eventually, all duties on industrial products will be completely removed, which should make British products more competitive when offered for sale in Canada.

When it comes to importing, EU firms will also be able to obtain cheaper parts and components that they might need to build their products because they're not paying as much in import taxes.

Smaller businesses in particular may find they benefit from CETA because they are saving not only money in import fees, but also time by not having to complete customs procedures and duplicative product testing requirements.

Other advantages CETA offers are the potential for European firms to bid for Canadian public contracts like schools and the possibility of it being easier for EU nationals to work in Canada and vice versa.

When CETA takes full effect, an Investment Court System will replace the investor-state dispute settlement currently present in many bilateral trade agreements.

A positive future for the two blocs

Speaking at the time of CETA being brought into force, representatives of both blocs were optimistic about the future of CETA and the benefits it could offer.

President of the European Commission Jean-Claude Juncker said: "This agreement encapsulates what we want our trade policy to be - an instrument for growth that benefits European companies and citizens, but also a tool to project our values, harness globalisation and shape global trade rules.

"Now it's time for our companies and citizens to make the most out of this opportunity and for everyone to see how our trade policy can produce tangible benefits for everyone".

Commissioner for trade Cecilia Malmstrom said exporters should see things really begin to change for the better, adding: "CETA is a modern and progressive agreement, underlining our commitment to free and fair trade based on values. It helps us shape globalisation and the rules that govern global commerce." 

How your business can prepare for trade with Canada

If you're interested in trading with other businesses in Canada, you can search for a 'Harmonised Commodity Description and Coding System' (HS Code) via the website of Canada's Border Services Agency to look up what the CETA tariff will be for your products.

However, if you're at all confused by the red tape and regulations, don't forget that MIC can help with Canada customs trade compliance. Our Canada-specific functionality enables the automation of several key Canadian programs while automating the creation of import and export declarations.

This will make the procedure easier, as well as eliminating any potential inaccuracies. For more information and to see what other services we can offer you, contact us today.