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Canada, EU Complete Free Trade Agreement Text

by Mike Godfrey, Tax-News.com, Washington

08 August 2014


Officials have finalized the text of the delayed Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU).

An agreement in principle was reached in October 2013, but it has since proven difficult to resolve the remaining technical difficulties and draw up a final legal text. A translation process and legal review will now begin.

Canada's International Trade Minister, Ed Fast, said: "This is another important step toward the implementation of the historic Canada-EU trade agreement, which will create jobs and economic opportunities for hard-working Canadians in every region of the country."

A majority of duties will be eliminated as soon as the agreement enters into force, and industrial tariffs will be fully liberalized. By the end of the transitional period, Canada and the EU will liberalize, respectively, 92.8 percent and 93.5 percent of trade lines in agriculture. Approximately 98 percent of the 9,000 EU tariff lines will ultimately become tariff-free.

The CETA is expected to boost bilateral trade in goods and services by 22.9 percent. About half of the EU's anticipated overall gross domestic product (GDP) gains will come from changes to trade in services regulations, and could amount to up to EUR5.8bn (USD7.8bn) a year. Total EU exports to Canada are estimated to increase by 24.3 percent, while Canada bilateral exports to the EU should rise by 20.6 percent.

Annual real income gains of approximately EUR11.6bn for the EU and EUR8.2bn for Canada are anticipated within seven years of the CETA's implementation.

Planning has begun for a Canada-EU Summit in September. Fast and Prime Minister Stephen Harper will travel to the UK early next month.

TAGS: tax | investment | free trade agreement (FTA) | intellectual property | gross domestic product (GDP) | tariffs | United Kingdom | agreements | tax rates | Canada | import duty | tax reform | regulation | trade | European Union (EU) | services | Europe

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