Introduction
The Comprehensive Economic and Trade Agreement (CETA) is proposal for an agreement between Canada and the European Union in which the two parties would have access to each other’s markets. According to Hübner (2011) the agreement seeks to create a free trade area between Canada and the European Union whereby Canadian exporters would have an unrestricted access to the EU markets. Similarly, traders from EU member countries would have an unrestricted access to markets within the various Canadian provinces. The main objective of this agreement is to create an environment in which the volume of trade between the two partners will increase. This is projected to increase the annual national income of Canada by $ 12 billion while at the same time creating over eighty thousand employment opportunities for Canadians. In this essay, the author looks into the Comprehensive Economic and Trade Agreement with respect to its impact on the Canada’s trade and economic welfare.
This is an agreement between Canada and the European Union abolishes trade restrictions in order to promote trade among the two parties. Canada has had economic relations with Europe for a long period of time. The two share economic and cultural bonds which have been built over built over centuries through trade, immigration and by interactions through sports, academics among other cultural activities. The Comprehensive Economic and Trade Agreement is therefore one of the natural through which the relationship between these two parties can be cemented. Trade is a very important determinant of the prosperity of Canadians and their standards of living. Indeed, the trade has played a vital role in the economic growth of Canada as a nation and there it is only prudent for the country to seek for trading opportunities beyond its national boundaries. Collaboration in trading activities with other countries has become more important especially in this era of globalization. It is important to note that over sixty per cent of Canada’s gross domestic product results from its trading activities. Likewise, one in every five Canadian employees is engaged in trading activities. This is why the government agencies among other concerned stakeholders found it important to seek trading opportunities from other countries like EU member countries. The Comprehensive Economic Trade Agreement is the vehicle being used to achieve this objective.
The EU market is large and very lucrative. It is composed of over five hundred million people all whom are would make the potential market for Canadian traders (Boscariol 2012). This market also has boasts of an economic activity worth over $ 17 trillion. This market is actually the largest importer of goods in the world. The value of its imports it annual important is 2.7 times larger than that of the United States. This means that any country which forms a free trade agreement with EU is likely to benefit a lot in terms if increased market for its goods. The European Union is currently the second-largest trade and investment partner to Canada. The United States holds the first position. In 2010 Canada exported to the European Union goods and services worth $49.1 billion and imported from the EU goods and services worth $55.2 billion. While the EU is the second largest trading partner to Canada, Canada is the eleventh-largest trading partner to the European Union bloc (Guerin and Napoli 2008). The European Union is the Canada’s second-largest foreign direct investment source valued at about $148.7 billion. This is according to the taken towards the end of 2010. It was established that Canada’s foreign direct investment in the EU was valued at about $145.7 billion. This represents 23.6% of the country’s direct investments abroad. It is therefore important to note that an increased access to the EU market would play a very important in the economic growth and development of Canada owing to its access to large markets in this trading bloc.
The comprehensive economic and trade agreement seeks to increase trade between Canada and the EU by not only reducing or eliminating tariffs and customs duties but by also doing away with non-tariff barriers like regulations and procedure in domestic economies that prevent the free flow of goods and services. Negotiations on the formation of comprehensive economic trade agreements cover twenty two areas (Deblock and Rioux 2010). These areas cover both the abolishing of tariffs and customs duty as well as the elimination of non-tariff barriers. The main objective of these negotiations is to come up with an agreement that would enable people from Canada and from the European Union to engage in business without any restrictions whatsoever. Some of the non-tariff barriers that impair the flow of goods from one country to another include technical barriers to trade, and competitions especially by monopolies and state enterprises. The agreement also seeks to establish policies that would encourage the free flow goods and services as well as movement of people from one country to another to supply their services.
Conclusion
The comprehensive economic and trade agreement is an agreement aimed at improving trade between Canada and the European Union. These parties have been trading with one another over a long period of time owing to the strong cultural and economic ties (Guerin and Napoli 2008). The European Union is one of the largest trading partners of Canada, a situation which sets pace for increasingly collaboration between these two economies. With EU having over five hundred million people, Canada stands to benefit immensely from increasing its trade relations with this economic bloc. The comprehensive economic and trade agreement between the EU and Canada seeks to establish a free flow of goods and services between Canada and the EU. Through this agreement, trade would promote through not only the reduction of tariffs and customs duties but also through the elimination of non-tariff barriers.
Bibliography
Boscariol, C.A.A (2012) Bilateral Ambition Canada, the EU, and the Comprehensive Economic and Trade Agreement (“CETA” ) Canadian Corporate Counsel Association World Summit, April 2012. Web. 5th December 2013 < http://www.ccca accje.org/En/events/pdf/RF2_Comprehensive%20Economic%20Trade%20Agreement_CelsoBoscariol.pdf>
Christian Deblock & Michèle Rioux, “From Economic Dialogue to CETA”,(2010-1011) International Journal, Winter 2010-2011,39 at 40 [Deblock & Rioux].
Guerin, S.S., and Chris Napoli, C. Canada and the European Union: Prospects for a Free Trade Agreement Brussels: CEPS, 2008. Print.
Kurt Hübner Europe, Canada and the Comprehensive Economic Partnership Agreement New York: Taylor & Francis, 2011. Print.
