CETA foundation


The Comprehensive Economic and Trade Agreement (CETA), which went into provisional effect on September 21st, 2017, opens up vast new markets within the European Union and will promote international trade and overall growth in both economies. With CETA, Canada now enjoys preferential access to the second largest economy, the E.U., adding to its standing access via the North American Free Trade Agreement (NAFTA) with the world’s largest economy, the U.S. Perhaps more importantly, CETA presents are markable chance for Small and Medium Enterprises (SMEs) to export into new markets.

Benefits to Canadian Businesses:


Opens markets to 500 million people in 28 E.U. countries. The EU import market is impressive, taking in $US 2 trillion in 2016, second only to the US which imported $US 2.2 trillion.


Estimated to create almost 80,000 new jobs in Canada, and increase the average Canadian household’s annual income by $1,000.


Removes 98% of tariffs and barriers between Canada and the E.U. whereas only 25% of all product lines were tariff-free before.


Estimated to add $12bn to the Canadian economy.


Industries who will enjoy a significant boost in exports

  • The automotive industry stands to be one of the primary beneficiaries of CETA. The E.U. is the world’s second largest importer of automotive goods, bringing in $US 101 billion in 2016.Yet Canadian imports currently rank only 18th with a 0.6% share of that market and tariffs are currently 10% on light passenger vehicles and are even higher on other types of vehicles. As an example of the potential of the agreement, if half of the SMEs currently involved in exporting automotive goods were able to gain just 1% of the available market, it could yield each automotive SME $US 2.7 million in new revenue per year.

  • Metal industry tariffs are already 0% for many products but still range between 3.3% and 10%for several important metals. This sets the stage for significant gains, especially since the E.U.is the world’s largest importer of metals and minerals, importing $US 132 billion in metals alone in 2016. If half of the SMEs currently involved in exporting metals were able to gain just 1% of the available market, SMEs could see as much as $US 1 million each in new revenue.

  • Agriculture, particularly the seafood sector, stands to make significant gains as tariffs currently range from 6% to 20%, and are above 10% for most seafood categories. The E.U. imported $US167 billion in agricultural products in 2016, a total of 8% of all imports into the E.U.


Industry Positioning for exporting from Canada to the EU


Source: ITC, Euler Hermes

In Summary

CETA also establishes intellectual property rights, and opens the E.U. services sector to Canadian businesses, including providers of management, financial, engineering, architectural, and IT services. The E.U. is the largest importer of services in the world. In 2015 alone, the E.U. imported $936 billion in services, $16.5 billion of which came from Canada. Finally, the agreement allows E.U. and Canadian companies to bid on each other’s government projects, a potential boon to construction companies and those SMEs which supply them.

The agreement will offer new opportunities for SMEs to grow, expand into new markets, and create new jobs. Of course, expansion into new markets can be risky, especially if you don’t know who you are selling to. This is where Euler Hermes can help. We have a database of information on over 85 million companies worldwide, and we have offices in 52 countries around the globe. Euler Hermes provides protection to our clients so that they can safely expand their sales into new markets, and take advantage of exciting new opportunities like CETA.

Dan North, North American Chief Economist (January 2018)




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