SIGNING OF CANADA-EUROPEAN UNION FREE-TRADE AGREEMENTOctober 1st, 2014
DIDIER CULAT | Quebec City
On September 26, 2014, Canada and the European Union signed a Free-Trade Agreement to promote and facilitate commercial trade between Canada and the European Union. The subject of negotiations since May 2009, this agreement follows the agreement in principle reached on October 18, 2013.
The Agreement requires the approval of the European Council and the European Parliament. Implementation legislation must also be passed by the Parliament of Canada and each Canadian province. At this stage, it is uncertain whether approval by the member States of the European Union is required and this issue will likely be debated when the agreement comes before the European Council for approval.
This Agreement represents a prime opportunity for Canadian (or European) businesses wishing to enter the European (or Canadian) market since 98% of existing custom tariffs between Canada and the European Union will be abolished as soon as the Agreement takes effect. By contrast, under the North American Free Trade Agreement, custom tariffs were progressively reduced over a 7-year period. A Canadian business seeking access to the European market (or a European business seeking access to the Canadian market) should therefore take advantage of the time between the signing of the Agreement and its implementation to prepare its entry into the European (or Canadian) market. The immediate reduction of custom tariffs represents a significant advantage that other international competitors will not have.
It is important to note that the Free Trade Agreement covers not only trade in goods, but also trade in services and public procurement. It also provides for conflict resolution, the reduction of both tariff and non-tariff barriers, new measures to protect intellectual property and coordination between Canada and the European Union on sustainable development issues.
This is also the first time the European Union has signed a free trade agreement with a G7 country and it has done so in the context of talks aimed at signing a free trade agreement between the European Union and the United States that began in July 2013 and for which the seventh round of negotiations took place on September 29, 2014.
The Canada-European Union Free Trade Agreement will be different from those in place within the European Union since tax measures and structures will have to be planned, immigration issues addressed so Canadian citizens will be allowed extended stays in Europe (or European citizens allowed extended stays in Canada) and intellectual property rights protected. Our specialists at BCF will be pleased to advise you on these issues and to provide you with customized services to help you prepare to do business in the European market (or the Canadian market).