EU-Canada Trade: A Growing Alliance Amidst US Protectionism
Brussels — May 3, 2024 — Amidst escalating global trade tensions, the EU-Canada trade relationship is flourishing due to several critical factors analyzed in this report. Fueled by the Thorough Economic and Trade Agreement (CETA) and divergent trade policies, the two entities are forging closer ties. This burgeoning partnership presents notable opportunities, so read on to explore its nuances.
EU-Canada Trade: A Growing alliance Amidst US Protectionism
Recent shifts in global trade dynamics have highlighted a strengthening bond between the European Union and Canada, particularly as the United States leans towards protectionist policies.This evolving relationship is underscored by the success of the Comprehensive Economic and Trade Agreement (CETA) and a shared commitment to international trade rules.
The Thawing of EU-Canada Relations
earlier this spring, an opinion poll revealed that 46 percent of Canadians woudl support Canada joining the EU, a notion met with enthusiasm in Brussels. We are honored,
said European Commission spokesman Paula Pinho. While geographical realities preclude such a union, the sentiment reflects Canada’s increasing alignment with Europe amid strained relations with the U.S.
CETA: A Model for Future Trade Agreements
Completed after years of negotiation, CETA stands as a far-reaching trade agreement that the EU champions. It includes chapters on sustainability, setting a precedent for future agreements.Anders Ahnlid, Director General at the College of Commerce and former Swedish EU ambassador in Brussels, stated:
When Ceta came to, it was one of the most far-reaching trade agreements that the EU had negotiated.It is an agreement of the kind that the EU wants, which also includes chapters on sustainability and which is moving forward.
Anders Ahnlid, Director General, College of Commerce
The impact of CETA is significant. between 2016 and 2023, Sweden’s exports to Canada more than doubled, and EU exports to Canada increased by 64 percent.
Challenges and Controversies
Despite its successes,CETA faces challenges. Not all parts of the agreement have been implemented, as politically sensitive aspects require ratification by national and regional parliaments across the EU. This process remains incomplete.
Did You Know?
CETA has been provisionally applied since 2017, meaning that many of its provisions are in effect, but full ratification is still pending in some EU member states.
US Trade Policy and its Impact
Canadian Prime Minister Mark Carney has described the U.S.’s trade war against Canada as the greatest crisis of our lifetime.
This tension has driven Canada closer to the EU, seeking reliable partnerships that uphold international rules.
EU’s Broader Trade Agenda
While the U.S. navigates a protectionist era, the EU is actively pursuing its free trade agenda. A recent agreement with Mercosur (Argentina,Brazil,Paraguay,and Uruguay) is under consideration,promising significant economic potential. Though, concerns exist in countries like France and Poland regarding the impact on their agricultural sectors.
pro Tip
Keep an eye on the EU’s trade negotiations. agreements like Mercosur could reshape global trade dynamics and offer new opportunities for businesses.
The Future of EU-Canada Trade
Anders Ahnlid believes that trade between the EU and Canada can continue to grow, especially if U.S. customs policies persist.He emphasizes the importance of collaboration within the World Trade Institution (WTO) to maintain a coalition of countries committed to preserving trade and the regular world order.
if the Mercosur agreement is approved,the EU—not the U.S.—will have duty-free trade with several of the largest economies in North and South america.
Fact. What is CETA?
CETA is a free trade agreement between the EU and Canada, provisionally applied as 2017.
- Customs duties are eliminated on almost all goods and services.
- Many rules that indirectly reduce trade (“non-tariff barriers”) are removed, including the introduction of common standards.
- A special court is established to resolve disputes when European companies invest in Canada and vice versa.
FAQ: EU-Canada Trade
- What is CETA?
- CETA is a free trade agreement between the EU and Canada that aims to boost trade and investment.
- When did CETA come into effect?
- CETA has been provisionally applied since 2017.
- What are the main benefits of CETA?
- The main benefits include the elimination of tariffs, reduction of trade barriers, and increased investment opportunities.
- Why is CETA controversial?
- Some parts of CETA are controversial due to concerns about its impact on agriculture and regulatory standards.
