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5 ways the Canada-EU trade deal will impact Canadians

10/18/2013 09:16 EDT | Updated 01/23/2014 06:58 EST
Canada and the European Union have reached a "political agreement" on free trade that the federal government says could boost Canada's annual income by as much as $12 billion annually, and bilateral trade by 20 per cent.

While the deal is not expected to be ratified for at least two years, it is expected to remove 98 per cent of EU tariffs on a wide range of Canadian products.

Here are five ways the Canada–EU Trade Agreement (CETA) will affect Canadians:

1. Cheaper goods

When CETA comes into force, Canadians will pay less for items including food, wines and spirits, and even high-end European cars.

The 10 per cent EU tariff on passenger vehicles will be eliminated, as will tariffs on auto parts which run up to 4.5 per cent. 

Michael Hatch, the economist for the Canadian Automobile Dealers Association, applauded the elimination of tariffs on EU-imported cars and parts, saying in a written statement it "will translate into lower prices for Canadians."

While Canadian documents make no mention of alcohol, a memo by the European Union says tariffs on wines and spirits from the EU will also be eliminated. About half of Canada's wine imports are from the EU, the memo notes.

Once the deal is in effect, 94 per cent of EU tariffs on other agricultural products will also? be eliminated right away, and seven years later 95 per cent of products will be duty free.​

Canadians will pay less for durum? and high-quality common wheat, other grains including oats, fresh, processed and frozen fruits and vegetables, oils, maple syrup, even cat and dog food, among other products.

Also, 96 per cent of EU tariffs on fish and seafood products will be eliminated right away, and seven years later 100 per cent will be duty free.

2. More Canadian beef, pork and bison

CETA will give Canadian beef, pork and bison producers unlimited, duty-free access to the EU market with potential annual sales estimated at $1 billion.

Manitoba expects the deal will provide significant market access for its agricultural producers including beef, pork and canola, as well as its manufacturers and other businesses.

Agriculture Minister Gerry Ritz refuted the suggestion that Canada made gains in the beef, pork and bison industries at the expense of dairy farmers.

"Not true, not at all," Ritz said on Friday.

Ritz said while the Europeans will be able to sell Canadians more cheese, Canadians will be able to sell them other dairy products such as milk, yogurt, and ice cream — on top of cheese.

"Our dairy industry has complete, unfettered access for all dairy products into the European market."

3. Less Canadian cheese

EU cheesemakers will be allowed to sell Canada 30,000 tonnes of cheese, up from the current 13,000 tonnes.

While the federal government insists CETA will not affect Canada's supply management system which, it says will remain "as robust as ever," it is considering compensation for Canadian dairy farmers if they lose money because of the agreement. It’s not clear whether compensation is being considered for small cheesemakers.

"Personally, I don't think there will be any hurt," Ritz said on Friday.

Ron Versteeg, the vice president of the Dairy Farmers of Canada, told CBC News on Friday they are concerned about giving the EU greater access to "one of the jewels" in the Canadian dairy industry.

"It's a bit discouraging to see something that we've put a lot of blood, sweat, and tears into developing — to have it sort of eroded and given away to the Europeans," Versteeg said.

Both Ontario and Quebec have asked the federal government for a guarantee that their dairy farmers will receive compensation for any negative impact resulting from the trade deal.

Canada's supply management system provides Canadians with a consistent supply of high-quality dairy, egg, and poultry products at reasonable prices.

4. Intellectual property rights

CETA includes "provisions on intellectual property rights, better market access terms for information and communications technology and its related services."

While the text of the agreement in principle is not yet available, it is said to strike "an appropriate balance between rewarding innovators and ensuring Canadians are able to reap the fruits of such innovation." 

Canada’s Research-Based Pharmaceutical Companies (Rx&D) welcomed the trade deal saying "a more level playing field in intellectual property protection can lead to more investment in the research and development of new medicines and vaccines here at home."

According to Rx&D, the life sciences intellectual property improvements included in CETA are the potential to recover up to two years lost on a patent as a result of red tape, and giving patent-owners the right to appeal court decisions where a patent has been ruled invalid.

Phil Upshall, executive director of the Mood Disorders Society, also applauded the trade deal saying "CETA will ensure continued innovation in medicines and improve the health of all Canadians, including those with mental illness."

Upshall pointed out that the last time Canada reformed its IP policy was 25 years ago. "The rest of the world has evolved since then and Canada must keep pace," he said.

Ontario Premier Kathleen Wynne said on Friday her province supports the deal but has a few concerns around its intellectual property provisions on pharmaceuticals, among other areas.

"We'd like to make sure that there is compensation if any of our pharmaceutical industry is adversely affected," Wynne said.

5. Provinces, municipalities

Wynne also said she supports the deal because it gives its manufacturers and service providers more access to European markets. 

Ontario estimates the deal will create an estimated 30,000 jobs across the province.

A memo by the European Commission says "CETA covers new ground as it is the first time that all sub-federal levels of government in Canada have committed themselves to bilaterally opening their procurement markets."

The memo points to a EU-Canada study that showed the overall value of contracts awarded by the Canadian government was valued at up to $19 billion per year, while the value of contracts by Canadian municipalities was estimated at $112 billion.

According to the Canadian government, CETA procurement rules will only apply to "high-value" contracts to ensure that municipalities are still able to support local interests.

Claude Dauphin, the president of the Federation of Canadian Municipalities, welcomed the agreement in principle saying it was the result of two years of collaboration between the municipalities and the federal government.

Dauphin said "while some important details remain to be confirmed," the FCM was "more optimistic than ever." 

The federal government notes that excluded from the Canada–EU trade deal, as in all of Canada's free-trade agreements, are sectors such as education and health-care services.

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