As of September 2016, Canada entered into the bilateral Canada and European Union (EU) Comprehensive Economic and Trade Agreement (CETA), which as the federal government points out is “by far one of Canada’s most ambitious trade initiatives, setting new standards in the trade in goods and services, non-tariff barriers, investment, government procurement, as well as other areas like labor and environment. CETA will open new markets in the EU for our exporters and generate significant benefits for all Canadians.
“The EU is the world’s second largest economy and Canada’s second largest trading partner after the United States. It is also the world’s second largest importing market for goods. The EU’s annual imports alone are worth more than Canada’s GDP. Preferential access to this large, dynamic market offers tremendous opportunities and a real competitive edge for Canada.
“CETA covers virtually all sectors and aspects of Canada-EU trade in order to eliminate or reduce barriers. CETA addresses everything from tariffs to product standards, investment, professional certification and many other areas of activity. The agreement’s broad scope—including improved access to EU markets for goods and services; greater certainty, transparency, and protection for investments; and new opportunities in EU procurement markets—will translate into real benefits for Canadians and contribute to Canada’s long-term prosperity.”
Notice above that the federal government said “one of the most ambitious” and that the EU is Canada’s second largest trading partner. What does 2018 hold for the future of the North American Free Trade Agreement (NAFTA), Canada’s largest trading partner? While predictions abound, they are impossible to concretize at this point. Lawyers and their clients are particularly watching for the future of Chapter 19, the dispute resolution mechanism. US President Donald Trump has promised to end it. Meanwhile, Canadian Ambassador to the US David MacNaughton has indicated he is open to improving it, he maintains that it is “critical” to keep an external dispute resolution mechanism in NAFTA.
Prime Minister Justin Trudeau and British Prime Minister Theresa May have jointly said the two countries are working to establish a new bilateral free trade deal to take effect after the United Kingdom leaves the European Union. Begging the question, according to press reports, “Both leaders say the template for a deal would be the long-heralded Comprehensive Economic Trade Agreement.”
The Canada-EU trade deal eliminates well over 90 per cent of all barriers in trade between Canada and the European Union, and as such provides “an excellent basis for ensuring a smooth transition” post-Brexit, Trudeau said.