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EU-Canada FTA Could Be Signed In October

by Ulrika Lomas, Tax-News.com, Brussels

06 July 2016


The European Commission has formally proposed the signature and conclusion of a free trade agreement between the European Union (EU) and Canada.

The Commission must obtain support from the European Council and European Parliament. Once this process is complete, the agreement can be provisionally applied. The Commission hopes that the agreement will be signed during the next EU-Canada Summit, which will be held in October.

Commission President Jean-Claude Juncker said: "The trade agreement between the EU and Canada is our best and most progressive trade agreement and I want it to enter into force as soon as possible. It provides new opportunities for European companies, while promoting our high standards for the benefit of our citizens. I have looked at the legal arguments and I have listened to heads of state or government and to national parliaments. Now it is time to deliver. The credibility of Europe's trade policy is at stake."

EU Trade Commissioner Cecilia Malmström said: "I now hope that the deal with Canada can be signed, provisionally applied, and concluded quickly, to the benefit of consumers, workers, and entrepreneurs – this is an agreement that Europe needs."

The Comprehensive Economic and Trade Agreement (CETA) will eliminate or reduce a range of tariffs. Upon implementation, Canada will scrap duties worth EUR400m (USD442.4m) for goods originating in the EU. At the end of transitional periods for duty elimination, this figure will rise to EUR590m a year.

European companies will receive certain advantages when seeking approval for investment projects in Canada, and will be given greater opportunities to provide services within specialist sectors including dredging and shipping. Market access will also be ensured in sectors such as environmental services, telecoms, and finance. EU businesses will be able to bid to provide goods and services at federal, provincial, and municipal levels within Canada, the first non-Canadian bloc to be granted such permission.

Where the EU negotiates and concludes an international agreement, it has either exclusive competence or competence that is shared with member states. Where it has exclusive competence, the EU alone has the power to negotiate and conclude the agreement. Where the competence is shared with member states, the agreement is concluded both by the EU and the member states. This is known as a "mixed agreement," to which member states must give their consent.

The Commission has decided to propose CETA as a mixed agreement. It said that this is without prejudice to its legal view, as expressed in a case currently being examined by the European Court of Justice concerning the trade deal reached between the EU and Singapore.

Malmström commented: "The open issue of competence for such trade agreements will be for the European Court of Justice to clarify, in the near future. From a strict legal standpoint, the Commission considers this agreement to fall under exclusive EU competence. However, the political situation in the [European] Council is clear, and we understand the need for proposing it [CETA] as a 'mixed' agreement, in order to allow for a speedy signature."

TAGS: investment | business | European Commission | free trade agreement (FTA) | entrepreneurs | tariffs | trade treaty | Singapore | agreements | Canada | standards | trade | telecoms | European Union (EU) | services | Europe

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