What Does CETA Mean for Canadian Businesses?
On September 21st, the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) came into effect between Canada and the 28 members of the European Union. This trade deal is the largest since NAFTA, and its influence will span a wide range of industries and labour markets. Now that it’s in effect, here’s what you need to know regarding how CETA will impact your business and more largely, the Canadian economy:
98% of European Goods Can Now Be Exported to Canada Tax-Free
The key change going into effect is the removal of tariffs. As of Thursday, 98% of EU goods will be able to enter Canada without tariffs, which are taxes paid to the government. Similarly, Canadian businesses will be able to export their products to Europe, without having to pay costly tariffs. This will result in tremendous benefits for shoppers and business owners. If you find yourself shopping for European clothing, food, or electronics, you might be in line to save a few bucks! And Canadian businesses in almost every field, from agriculture and seafood to automotive and oil, will see lower costs and greater opportunity. As a business owner, you’ll find that it’s less expensive than ever before to export your products to an enormous European market.
Canadian Services Will Also See Lower Costs and Less Regulation
Some businesses may be asking, “I thought the Canadian economy mostly creates services, not goods?” And you’re right. But this trade deal supports the many businesses that offer international services too. Canadian tech companies can install software for European firms, and European architects can come to Canada to design Canadian office buildings. CETA allows for this to be done with lower costs and less red tape than ever before. Soon, you may be able to visit a European hotel that serves Canadian bacon for breakfast, and stores its client data on Canadian servers. Regardless of the industry you’re in, CETA will bring many benefits to your company that past trade deals have lacked.
Canada’s Largest Trade Deal Since NAFTA Is Expected to Boost Trade and Incomes
The CETA deal took over 7 years to negotiate between 29 countries, amid dramatic global events and changing governments. Canada is now a part of its biggest trade deal since NAFTA, after it survived numerous delays and roadblocks. Looking ahead, experts see big benefits in store for both Canada and the European Union. A joint Canada-EU study estimated that trade could increase by up to 20% between the two, and the benefits of the agreement could create over 75,000 jobs. Just one aspect of CETA allows for Canadian businesses to bid on public, government contracts in Europe, a market estimated to be worth over $3 trillion. While CETA’s mechanism for handling disputes between countries and individual companies is not yet in effect, most other major aspects of CETA are now in place.
In a market far larger than the USA, of over 500 million people, it’s easy to imagine the possibilities for business growth in both Canada and the EU. Moving forward, in our increasingly interconnected world, there are more reasons than ever for Canadian firms to do business abroad. Contact Orbit Brokers today with questions you may have regarding CETA and its impact on your imported goods!