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Canada - European Union Comprehensive Economic and Trade Agreement (CETA)

Frequently Asked Questions

What is CETA?

The Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU) is a modern and progressive trade agreement that will reinforce the strong linkages between Canada and the EU Member States. CETA is already creating new opportunities across Canada and Italy, opening new markets for our exporters and forging closer links between our economies.

Why is CETA important for Italy?

CETA reflects Canada and the EU's shared commitment to generate economic growth and jobs on both sides of the Atlantic through increased trade and investment.

CETA underscores our shared commitment to advancing a progressive approach to international trade by protecting the right of countries to regulate on their territory, and maintaining high labour and environmental standards.

What are the other benefits of CETA for the Italian economy?

With CETA, Italy can export virtually all of its products to Canada duty-free, which will be beneficial for important economic sectors such as automotive products, apparel, and ceramics, glass and stone products, as well as processed agricultural products and wine.

For the first time, under CETA, Canada agreed to grant protection in Canada for certain foreign Geographical Indications.

In addition, Canada agreed to establish two new tariff rate quotas (TRQ) totaling 17,700,000 kilograms for EU cheeses, as well as reallocating an additional 800,000 kilograms within the WTO Cheese TRQ to the EU. Prior to the coming into force of CETA, EU cheese access was limited to 13,471,832 kilograms annually. Upon full implementation of CETA, access for EU cheeses will more than double to over 31.9 million kilograms.

With CETA, Canada is opening its government procurement markets at a federal, provincial and municipal level – a first in international trade agreements signed by Canada.

Public transport, construction and public works, consulting services, IT services, equipment repair and services will be among the sectors which should benefit the most from CETA.

Will CETA affect environmental and labour standards in Canada and the EU?

On the contrary, CETA’s  Environment Chapter explicitly requires each Party to strive to continue to improve its laws and policies and its levels of environmental protection.

Both Italy and Canada maintain high labour protection standards and the Labour chapter provides assurances these protections will not be lowered in order to encourage trade or investment.

Under CETA, Canada and the EU have also committed to respect and promote internationally-recognized labour rights and principles.

Will CETA affect food standards?

Both Canada and Italy maintain high standards for food safety, and our consumers demand that the food they consume is safe and meets those high standards.

Nothing in CETA will require Canada or the EU to lower their food standards, or to change their existing regulatory frameworks for genetically modified organisms.

Will CETA allow hormone-treated beef, GMOs or other products currently forbidden in Italy?

No.

European health standards  are applicable to Canadian exports, including the ban on growth hormones and other food additives for animals, as well as GM or pesticide regulations. CETA does not change anything to these standards, nor to the standards implemented in Canada regarding European products imported to Canada. Italy and Canada have committed to fully respect one another’s standards.

Does CETA threaten “Made in Italy” and Italian geographical indications (GIs)?

No.

On the contrary, for the first time in North America, CETA provides protection for Italian GIs for food and agricultural products. CETA provides immediate recognition and protection of 41 Italian geographical indications (GIs) for agricultural and food products -- one of the highest totals for any EU Member State (only France, with 42, had more).

In fact, with the implementation of CETA, Canada also decided to expand its existing GI regime for wines and spirits to now allow applications for agricultural and food product GIs. This means more Italian food GIs can be protected in Canada. Interested applicants from any country – including Italy - can now directly request GI protection for their agricultural and food products, just as hundreds of Italian applicants have successfully done to obtain GI protection for wines and spirits in Canada over the years.

The new GI provisions in CETA only apply to how the terms can be used in the Canadian market. There are no changes to GI protection in the EU. CETA does not allow Canadian products to be exported to Italy or any other EU Member State under names protected in the EU. Canadian exports to Italy must continue to comply with EU and Italian GI regulations. In other words, CETA does not allow “Italian-sounding” products to enter Italy or any other EU country. Accusations of “food piracy” are therefore unfounded. 

Will CETA have any impact on the safety of durum wheat imports into Italy?

No. Italy has imported durum wheat from Canada for over a hundred years, and Canadian wheat exports consistently meet or exceed all Italian and EU health and safety standards.

All Canadian wheat exports must fully meet the health and safety requirements established by Italy and the EU. CETA does not change that requirement.

With regard to residues, including glyphosate, public authorities in Italy, the EU and Canada manage the safety of food products based on a science-based system of maximum residue levels (MRLs).

Canadian wheat exports to Italy are required to meet the MRLs established by the EU. MRLs for durum wheat imported from Canada are monitored and enforced by Italian authorities. Nothing in CETA changes this requirement.

Glyphosate has been found unlikely to pose a carcinogenic risk to humans by Codex Alimentarius, the international reference body on food safety, as well as by national authorities around the world, including the European Food Safety Authority and Health Canada. Glyphosate is authorized for use in over 130 countries, including Italy. Canadian exports of durum wheat consistently meet all EU MRLs. In the case of glyphosate, the MRL established in Canada is, in fact, stricter than that established in the EU. Ongoing monitoring by the Government of Canada of grain for export and for domestic consumption confirm that Canadian durum wheat consistently complies with Canadian and EU MRLs.

Will CETA threaten Italian Small and Medium sized businesses?

No.

On the contrary, CETA will provide new opportunities for SMEs by way of comprehensive tariff elimination, simplified border procedures, expanded access for services providers, including temporary entry for independent professionals and contract services supplier, and greater access to government procurement markets, including sub-national levels of government and utilities.

SMEs indicate that regulatory hurdles can pose particularly significant barriers to exporting. In response to this, CETA should improve regulatory cooperation between regulatory authorities in Canada and the EU by establishing an annual dialogue on regulatory matters. Further, in some product areas, CETA will provide for a protocol on conformity assessment that will allow SMEs to have their products tested and certified to Canadian standards within the EU.

Canada’s Progressive Trade Agenda promotes a global trading system that reflects an inclusive and progressive approach, including through better addressing the needs of SMEs. Through the CETA mechanisms, a priority for Canada will be to work with the EU and its Member States to identify ways in which the CETA can be used to better support SMEs.

At the inaugural CETA Joint Committee meeting in Montreal on September 26, 2018, Canada and the EU signed a recommendation on Small- and Medium-sized Enterprises (SMEs), which seeks to make it easier for Canadian and EU SMEs to benefit from increased trade and investment. The recommendation can be viewed here: http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/rec-003.aspx?lang=eng

Does CETA protect a government's right to regulate?

Yes. This right is clearly stated in the preamble of the Agreement.

The CETA Investment Chapter also reaffirms a government's right to regulate for legitimate policy objectives; for example for the protection of safety, health or the environment.

The core investment obligations of CETA – national treatment, most-favoured nation treatment, fair and equitable treatment and the protection against expropriation – have been carefully drafted to ensure the continued right of governments to regulate in the public interest.

Notwithstanding CETA's provisions, EU investors in Canada, and Canadian investors in the EU, must abide by the laws and regulations of the host country.

Can companies use the investment dispute resolution mechanism to challenge any regulatory measure?

No.

It is important to dispel misconceptions regarding CETA's investment dispute resolution mechanisms. CETA does not:

  • prevent governments from regulating in the public interest;
  • require that investors be compensated simply because a governmental measure has affected their expectations, including those regarding profits;
  • allow a tribunal to request that a government change its laws, regulations, or policies.

However, CETA does:

  • Allow a tribunal to dismiss frivolous claims to ensure the process is not abused.

Can any non-Canadian company launch a claim against the EU or an EU Member State using CETA's investment dispute resolution mechanism?

No.

An enterprise of a third state (for example the USA) cannot benefit from CETA's investment dispute resolution provisions simply by the fact that it has activities in Canada.

CETA's investment provisions offer protection to Canadian enterprises which (1) are established in Canada, (2) have substantive business activities in Canada, and (3) are making an investment in the EU that directly relates to their activities in Canada.

As such, an enterprise that is established in Canada, owned or controlled by persons from a third state, and lacking substantial business activities in Canada (e.g. letter-box companies), would not be recognized as an investor for the purposes of CETA's investment chapter.

What are the guarantees that arbitrators of the investment dispute resolution mechanism will be independent?

Under CETA, a permanent Tribunal constituted of fifteen members appointed by Canada and the EU is established, and a dispute is heard by a division of the Tribunal comprising three randomly selected members.

The new investment dispute resolution mechanism replaces the use of a Bilateral Investment Treaty. It ensures a high level of impartiality by ensuring that members of the tribunal are selected independently and have no relationship to the parties engaged in arbitration.

This is a change from the general practice whereby the investor launching the dispute participates in the selection of arbitrators.

A provision was added to prohibit members of the tribunal from acting as counsel or as a party-appointed expert or a witness chosen by a party in any other international investment dispute.

CETA's strict ethical rules will ensure the independence and impartiality of the members of the tribunal.

Will CETA lead to the privatization of public services?

No.

CETA provides guarantees that governments remain entirely free to manage public services as they see fit to best serve their citizens.

CETA has clear exceptions for publicly delivered services, such as health, education and other social services that allow governments to retain broad policy making authority.

Canada has a long history of public and universal health care and Canadians expect to fully preserve their access to comprehensive, universal and publically administered health care services.

 

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Date Modified:
2018-12-17