Decision 2017/38 - Provisional application of the Comprehensive Economic and Trade Agreement (CETA) with Canada - Main contents

Economic and trade agreement between Canada and the European Union

SUMMARY OF:

Decision (EU) 2017/37 on the signing of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU) and the EU countries

Decision (EU) 2017/38 — provisional application of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union and the EU countries

Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union

WHAT IS THE AIM OF THE DECISIONS AND THE AGREEMENT?

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  The decisions cover the signing and provisional application of the free trade agreement between Canada and the EU and the EU countries (CETA).
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  The agreement is designed to support growth and jobs through improved market access for goods, services and investments. It sets out specific rules on trade for those involved in business. It has the potential to keep prices down and provide consumers with a wider choice of quality products, while upholding standards and rules on food and product safety, consumer protection, health, environment, social and labour standards, etc.

KEY POINTS

The agreement starts with a preamble setting out the reasons for and the aims of the agreement and the parties’ commitments to those aims. This is followed by 30 chapters, 3 protocols and over 1,000 pages of annexes.

Chapter 1: Definitions and scope

This chapter explains the terms used in the agreement to enable Canadian and European partners to have a common understanding of the language used in the agreement.

Chapter 2: National treatment and market access for goods

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  CETA will remove most duties, taxes or other import fees on goods traded between the EU and Canada either when the agreement comes into effect, or more gradually. The parties agree to treat the goods they import from each other no less favourably than goods produced domestically.
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  It also outlines certain restrictions and controls that CETA will put or keep in place, such as protecting both sides’ rights as World Trade Organisation (WTO) members or ensuring the origin of the goods they import.

Chapter 3: Trade remedies

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  The partners confirm their rights and commitments under WTO rules. WTO members can counteract the negative effects of unfair trade practices on their domestic industry if, for example, another member country ‘dumps’ goods on their market at below their cost of production, or subsidises the production of those goods.
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  The chapter also includes:

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    rules on transparency including

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      investigations into possible cases of unfair trade practices,
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      measures taken to counter them;

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    mechanisms for consultation and information sharing to prevent such practices.

Chapter 4: Technical barriers to trade

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  The partners commit to working more closely together on technical regulations on testing and certifying products. The aim is to enable regulators to:

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    share experience and information;
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    identify areas where they could cooperate more closely.

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  Cooperation is voluntary. Neither side is forced to lower standards.

Chapter 5: Agreed action on sanitary and plant health issues (SPS)

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  Since 1998, the EU and Canada have had a Veterinary Agreement in place. This applies to animals and any products with components of animal origin. Under CETA, the SPS chapter replaces the Veterinary Agreement, but the work that took place under that agreement continues.
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  Measures by either partner to ensure food safety and animal and plant health must not create unjustified barriers to trade, but rather facilitate trade.

Chapter 6: Customs and trade facilitation

This chapter is designed to streamline customs procedures and make them more efficient. It ensures:

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  transparency – e.g. making customs requirements public, and providing information online;
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  streamlined, risk-based procedures – e.g. risk management and pre-arrival processing rather than requiring each shipment offered for entry to be examined;
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  certainty and predictability – e.g. a transparent, efficient appeals process, reliable advance rulings on tariff classifications.

Chapter 7: Subsidies

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  The parties have to

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    notify each other if they subsidise the production of goods;
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    provide further information on any subsidies they give to companies providing services, if the other side asks for such information.

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  A mechanism has also been set up allowing the parties to consult each other on subsidies that may negatively affect trade between them, and to find solutions if a subsidy is found to do so. The parties also agree not to subsidise exports of agricultural products to each other’s markets.

Chapter 8: Investment

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  This chapter sets out measures designed to open up investment between the parties and to protect investors and ensure that governments treat them fairly.
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  It:

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    removes barriers to foreign investment, such as foreign equity caps or performance requirements;
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    allows EU investors to transfer their capital in Canada back to the EU, and vice versa;
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    puts in place transparent, stable and predictable rules governing investment;
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    guarantees that governments will treat foreign investors fairly;
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    sets up a new Investment Court System (ICS) to enable investors to resolve investment disputes with governments quickly and fairly;
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    confirms the right to regulate at all levels of government.

Chapter 9: Cross-border trade in services

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  This chapter makes it easier for individuals and companies to provide services to Canadian customers, and vice versa. It covers:

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    services such as legal services, accountancy, transport and telecommunications services; and
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    services such as tourism, where a Canadian consumer has to move physically from Canada to the EU to consume that service, and vice versa.

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  The parties commit to ensuring fair, equal access to each other’s services markets.
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  In certain service sectors, the parties have made exceptions because, for example, the services in question — audio-visual services, certain aviation services — are sensitive. The agreement fully upholds governments’ ability to regulate and supply services in the public interest.

Chapter 10: Temporary entry and stay of workers within the borders of the other country or trading bloc

This chapter provides legal certainty for trained workers who temporarily enter the EU or Canada to do business. It states:

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  the types of professional covered, and the sectors in which they can operate;
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  the maximum length of their stay;
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  that EU professionals will enjoy equal treatment in Canada and vice versa.

Chapter 11: Mutual recognition of professional qualifications

This chapter creates arrangements allowing Canada to recognise professional qualifications earned in the EU, and vice versa. The agreement:

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  allows professionals on both sides of the Atlantic to practise in each other’s territory;
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  leaves it to the relevant authorities or professional bodies in the EU and Canada to negotiate a proposal on mutual recognition that can then be integrated into CETA.

Chapter 12: Domestic regulation

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  To ensure that domestic regulations in either territory do not act as an unfair barrier to trade, all regulations adopted should be publicly available, easily understandable and reasonable.
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  In some cases, the authorities in the EU or Canada may grant a licence to a company or an individual to supply a service or pursue a particular economic activity. In other cases, they may impose qualification requirements.
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  There are exceptions for some areas of regulation, such as water distribution or other public services.

Chapter 13: Financial services

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  This chapter enables financial institutions and investors in the EU and Canada to benefit from fair, equal access to each other’s markets. Certain conditions apply, and the rules comply fully with the prudential and regulatory standards in place in the EU and Canada. In addition, financial services firms can only offer their services to the other party in a limited number of sectors, such as certain insurance and banking services.
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  A Financial Services Committee will help the parties supervise and regulate the sector. They are allowed to protect the security and integrity of their respective financial systems. Areas such as pensions and social security are excluded.

Chapter 14: International maritime transport services

This chapter:

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  sets out rules on the maritime transport market between the parties;
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  includes measures to ensure fair and equal access to ports and port services for commercial ships.
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  provides definitions so that the parties’ commitments are clear.

Chapter 15: Telecommunications

The parties commit to giving each other’s businesses fair and equal access to public telecommunications networks and services. The rules confirm customers’ right to:

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  keep their number when switching providers; and
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  receive telecommunications services in remote areas.

Chapter 16: Electronic commerce

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  This chapter covers any business done electronically (e.g. online shopping).
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  It includes rules to ensure that personal information on the internet is protected and that online services will not include customs duties;
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  The parties promise to cooperate on issues related to e-commerce, for instance on combating spam.

Chapter 17: Competition policy

The parties agree to

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  prohibit and sanction practices which distort competition and trade (cartels, abuse of dominant market position or anti-competitive mergers);
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  respect rules to ensure they act fairly and transparently when applying their competition laws and pursuing investigations into companies which might be breaking them; and
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  recognise the importance of cooperation between their respective competition authorities.

Chapter 18: State-owned companies, monopolies and enterprises granted special rights or privileges

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  The parties agree not to intervene in or potentially distort competition for private companies. Both sides will ensure that state-owned enterprises, monopolies, and enterprises granted special rights will not discriminate against goods, services, or investments from the other party.
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  This ensures that competition between private and state-owned companies will not be negatively affected. The rules ensure that both parties have the full freedom of choice in the way they provide public services to their citizens.

Chapter 19: Government procurement

This chapter specifies the areas where EU and Canadian businesses can provide goods and services to each other's governments, at every level of government - national, regional and provincial, and local. For this to happen, businesses must meet specific rules on:

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  the value of the goods, services, or contract involved
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  who the customer is
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  the goods and services that are allowed (in the appendix).

Chapter 20: Intellectual property

This chapter:

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  builds on existing international intellectual property (IP) laws to develop regulations and standards that are consistent between the parties;
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  outlines procedures to protect against IP violations; and
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  defines areas where both parties can cooperate further.

Chapter 21: Regulatory cooperation

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  This chapter:

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    builds on an existing accord between the parties on regulatory cooperation, and
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    encourages regulators to exchange experiences and information, and identify areas where they could cooperate.

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  All cooperation is voluntary and regulators in the EU and Canada retain their respective powers to adopt legislation.

Chapter 22: Trade and sustainable development

In this chapter the parties:

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  recognise that economic growth, social development and environmental protection are interlinked;
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  agree to ensure that economic growth supports their social and environmental goals;
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  create a Joint Committee on Trade and Sustainable Development; and
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  commit to promoting forums with interest groups.

Chapter 23: Trade and labour

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  The partners commit to respecting the labour standards set by the International Labour Organisation (ILO), and to ratifying and implementing the ILO’s fundamental conventions.
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  The chapter:

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    protects each side’s right to regulate on labour matters;
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    prevents either side from ignoring or lowering labour standards to boost trade;
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    ensures that non-governmental organisations are involved in implementing the rules in this chapter;
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    promotes cooperation with the ILO;
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    establishes a mechanism for ensuring both sides put the chapter’s rules into practice (enforcement mechanism).

Chapter 24: Trade and environment

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  The parties agree to put international environmental agreements into practice.
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  The agreement:

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    protects each side’s right to regulate on environmental matters;
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    requires each side to enforce its domestic environmental laws;
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    prevents either side from relaxing their laws to boost trade;
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    encourages conservation and sustainable management of forests and fisheries;
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    ensures the involvement of non-government groups.

Chapter 25: Bilateral dialogues and cooperation

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  The parties agree to work more closely on areas such as science and forestry.
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  Existing agreements on dialogue and cooperation on trade and economic matters are incorporated into CETA so that all such activity has the same basis.

Chapter 26: Administrative and institutional measures

This chapter covers how the parties organise the different committees that the agreement sets up to manage and apply CETA, and the legal nature of their decisions.

Chapter 27: Transparency

The parties agree to:

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  publish the laws, regulations, procedures and administrative rulings on matters which CETA covers and make these available to those who are concerned;
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  promptly share information and respond to questions on measures affecting the way they implement CETA;
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  cooperate in international bodies to promote transparency in international trade and investment.

Chapter 28: Exceptions

The parties have the right to exclude certain areas, either from specific chapters of CETA, or from the whole agreement, for a variety of reasons (e.g. to ensure public safety, prevent tax evasion, or promote cultural identity).

Chapter 29: Dispute settlement

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  This chapter provides a system for resolving disputes between the parties about the way in which they apply or interpret CETA. If differences arise, the 2 sides must firstly communicate clearly and promptly with each other to try to resolve them quickly. They must also consult experts on the issue. Only if those efforts are fruitless can they have recourse to the formal procedure which this chapter sets out.
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  It also sets out the procedures both sides must follow to resolve a formal dispute. It gives them the option of using an independent mediator to oversee the process.

Chapter 30: Final measures

This chapter sets out rules on the agreement’s entry into force, the incorporation of new EU countries into the agreement once it is signed, and amending or ending the agreement.

FROM WHEN DO THE DECISIONS AND THE AGREEMENT APPLY?

Decision (EU) 2017/37 and Decision (EU) 2017/38 apply since 28 October 2016.

CETA will only be able to enter into force fully and definitively when all EU countries have ratified the agreement in accordance with their respective domestic constitutional requirements.

BACKGROUND

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  Canada and the EU signed the CETA on 30 October 2016. Formal negotiations on the trade agreement were launched in May 2009.
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  For more information, see:

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    Comprehensive Economic and Trade Agreement (CETA) (European Commission)
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    CETA in your town (European Commission)
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    EU/Canada Trade Deal (CETA) — Video clip (European Commission)
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    The Benefits of CETA (European Commission)
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    Exporters’ stories (European Commission).

MAIN DOCUMENTS

Council Decision (EU) 2017/37 of 28 October 2016 on the signing on behalf of the European Union of the Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part (OJ L 11, 14.1.2017, pp. 1–2)

Council Decision (EU) 2017/38 of 28 October 2016 on the provisional application of the Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part (OJ L 11, 14.1.2017, pp. 1080–1081)

Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part (OJ L 11, 14.1.2017, pp. 23–1079)

RELATED DOCUMENTS

Notice concerning the provisional application of the Strategic Partnership Agreement (SPA) between the European Union and its Member States, of the one part, and Canada, of the other part (OJ L 89, 1.4.2017, p. 1)

last update 14.09.2017

This summary has been adopted from EUR-Lex.