Magazine article Global Finance

CETA Hails New Era of Bilateral Trade Deals

Magazine article Global Finance

CETA Hails New Era of Bilateral Trade Deals

Article excerpt

The long-awaited Comprehensive Economic and Trade Agreement (CETA) between the European Union and Canada was approved by the European Parliament in mid-February. It is the largest bilateral trade agreement Canada has signed since the North American Free Trade Agreement (NAFTA) was established two decades ago.

CETA negotiations began in 2009 between Canada and the European Union; and although they concluded in September 2014, formal closure of the agreement was held up by EU requests for an investor-state dispute settlement mechanism.

In an era where US president Donald Trump has called getting out of the Trans-Pacific Partnership "a great thing for American workers," and where Brexit has created uncertainty as to what multilateral trade will look like in the future, the CETA deal stands as an example of how others are negotiating trade.

"For the most part, Canada has benefited from open access to other markets," says Glen Hodgson, an economist and senior fellow with the Conference Board of Canada in Ottawa. "That philosophical starting point is different from what is going on in the United States right now," he adds. "But the Trump line has gone from tearing up NAFTA, to renegotiating NAFTA, to tweaking it. And there is a recognition that Canada is the biggest market for 35 US states."

CETA is considered a more modern trade deal compared to the 1988 US-Canada Free Trade Agreement, or NAFTA, which superseded it. CETA, beyond eliminating tariffs, will allow Canadian companies to bid at all levels of the EU government procurement market (estimated to be worth $3. …

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