The Trade Confidence Index reports that the No. 1 concern was Canada-U.S. Border issues. We asked Canadian companies about all of our trade agreements around the world – only half were aware of CETA, but this survey was done in 2015 and awareness has probably increased since then. There needs to be an awareness and understanding of how we can use our free trade agreements. Rules of origin, for example, can be complex. Some Canadian businesses find the paperwork of free trade agreements so painful that they often do not even bother to exploit them and continue to export them under the rules of the World Trade Organization`s Most-Favoured-Nation Market Organization. This is probably more important for SMEs. In this Q&A interview, Daniel Benatuil, EDC`s Economist for Europe, shares his findings on the pros and cons of the new CETA.

Another highly controversial topic among European critics is the management of the fear that US companies will use CETA as a springboard to enter the European market (Salzburger Nachrichten, 2015b, p. 13). Consumer protection organisation Foodwatch fears that US shell companies will sue the European Union in arbitration tribunals using investment protection clauses. It is precisely in the perspective of the failure of the Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States that American companies now see a loophole for their Canadian subsidiaries to reap the benefits of CETA. The German Federal Federation of Wholesale and Foreign Trade opposes this idea and argues that it is prohibited to use a US shell company or a subsidiary of claims against the European Union; having regard to the CETA Investment Chapter Regime (Ziegeler and Stürzenhofecker, 2016, p. 4). As regards compensation claims, CETA would be the first agreement where by which the European Union as a whole would be responsible for the individual political actions of its Member States, so that some European Member States have no legal responsibility. As a result, the political risks of some European Member States could attract foreign investors looking for possible loopholes in the legislation. Critics point out that this communitarisation of responsibility within the European Union could be an untimely incentive for foreign investors.

The German Institute for Economic Research recommends focusing CETA`s investment chapter on direct investment, rather than transforming the European Union into a Union with communitarized responsibility (Ifo, 2018, p. 29). The EU`s 28 member states, including Britain, must also approve parts of the deal that flow into areas of national control. But the vast majority of the benefits of the agreement will come into force once Canada completes ratification. Until Britain formally leaves the EU, it will be bound by CETA. The agreement provides guaranteed access to European markets for 50,000 tonnes of Canadian beef, a central objective of the Conservative government that wanted to compensate for concessions on European cheese. For pork producers, this figure is higher (80 000 tonnes). In both cases, some of the access will be gradual over time. The reality is that, while the nature of bilateral agreements with the EU is different, all the drawbacks are significant, including the lack of full access to services, which accounts for 80% of the UK economy.

Let us take the example of Norway, which is at the opposite pole to Canada. Oslo has full access to the EU`s internal market, but, in return, it is more of a “rule-maker” than a “rulemaker”, meaning it is required to comply with EU rules without having to vote on it; it must accept free movement; contribute to EU programmes and budgets; and carry out customs controls for goods entering the EU. In order to understand the context of the two free trade agreements and their evolution, the document will first highlight, in a preliminary comparison, the process of creation and negotiation. . . .

Andrew Verboncouer • (920) 562-9601 •