The Canada-European Union

Comprehensive Economic and Trade Agreement (CETA)

What is CETA?

CETA is one of the most ambitious and comprehensive

FTAs ever signed by either Party, and covers namely:

– Comprehensive tariff elimination across all sectors

– Improved access for goods and services

– Greater certainty, transparency, and protection of investments

– New opportunities in procurement markets

• Signed October 30, 2016 by Canada, European Council and European Commission

• Currently being ratified in Canadian parliament

• Will likely go to the European Parliament in Feb 2017, already endorsed by the Foreign Affairs and International Trade Committees.

Scope and Coverage

CETA

Goods

Non-tariff Barriers & Regulatory

Cooperation

Intellectual property

Government Procurement

Services & Investment

Sustainable development,

Labour & Environment

3

Trade in Goods

• Ambitious tariff elimination:

Comprehensive tariff elimination across all sectors

98% of tariffs eliminated on Day 1Textiles: 18% 0Furniture: 9.5% 0Medical/optical equipment: 5% 0

Duty-free access across 99% of all tariff lines once fully implemented

Services and Labour Mobility

• Cross-Border Trade in ServicesBest coverage each side has ever offered to a trading

partnerNegative list approach and ratchet mechanismMost-favoured-nation (MFN) treatment

• Increased certainty and predictability for service providers through: Temporary Entry for a range of business persons Framework for the mutual recognition of professional

qualifications and a Chapter on domestic regulation

• No impact on permanent

employment or migration

Intellectual Property• IP for Pharmaceuticals

Package of commitments addressing key EU interests,

including:

An additional period of IP protection up to two years

Locked-in eight years of total data protection

Effective right of appeal

• Geographical Indications

Addressed EU priority requests on more than 170 GI terms covering foodstuffs

• Copyright

Supports advances in technology and international standards

Provisions to ensure compliance with WIPO Internet Treaties

Government Procurement

• CETA will provide unprecedented access to Canadian

procurement opportunities at the federal, provincial, and

municipal levels.

• Canada has offered new access to energy utility and

mass transit procurement in all provinces and territories.

• Nothing in CETA will force public utilities to tender

contracts for goods and services they wish to supply

from their own resources.

Non-Tariff Barriers & Regulatory Cooperation

• First ever stand-alone Regulatory Cooperation Chapter

in a Canadian trade agreement.

• New mechanisms to promote dialogue between

regulators, and to minimize trade distorting effects of

new measures.

• New Protocol on

Conformity Assessment,

which facilitates the ability

of EU companies to have

their products tested and

certified to Canadian

standards in the EU.

Standards

• No impact on existing EU requirements in relation to GMOs, hormones, or growth promotants.

• Dialogue and cooperation on key scientific,

regulatory and agri-food trade issues.

• High standards for food safety and animal and plant

health in Canada and the EU are maintained.

Sustainable Development,

Labour and Environment

• Sustainable Development, Labour and Environment chapters for the first time in a Canadian FTA:

Commitment to high levels of environmental and labour protection

Commitment to sustainable development, and the sustainable management of forests and fisheries

Commitment to review, monitor and assess impact of CETA on sustainable development

Recognized role for civil society

Investment

• Under CETA, Canada and the EU

are poised to build on our already

strong investment ties:– The stock of known Canadian direct

investment in the EU was valued at more

than 166 billion CAD (€118 billion) in 2014

– the stock of known EU direct investment in

Canada was valued at more than 215 billion

CAD (€ 153 billion) that same year

• Full protection of governments’ ability to regulate and legislate in the public interest.

• Investment provisions to increase certainty, stability, transparency and protection.

• Rules designed to treat investors and investments fairly, equitably and no less favourably than domestic or other foreign investors.

Investment Dispute Resolution

• During the legal review Canada and the EU agreed to

make modifications to the investment dispute resolution

mechanism.

• CETA does not impair a state’s ability to regulate and

legislate, including in areas such as the environment,

culture, safety, health, and conservation.

• CETA does not require governments to compensate

investors just because a governmental measure has

decreased profits.

• CETA does not allow a tribunal to direct a government to

change its laws, regulations, or policies.

Canada & Lithuania

• Canada-Lithuania bilateral merchandise trade in 2015 was almost €194 million.

• Lithuania’s imports from Canada were €35M in agricultural machinery, industrial equipment, prefab buildings, fish and seafood products.

• Lithuania’s exports to Canada were €159M in oil and mineral products, furniture and fertilizers.

• Canadian presence in Lithuania includes Valeant Pharmaceuticals, Alimentation Couche-Tard, IDW and Arc4dia.

Why trade with Canada?

• A 2008 Canada-EU joint study showed that CETA

could result in a 20% boost in bilateral trade and a

€11.6 billion annual increase to the EU economy.

• A 2015 study by Industry Canada found that exporting

companies, on average, have over double the annual

revenue of non-exporting companies.

• On average, Canadian exporters had triple the R&D

budgets of non-exporters, and were 37% more likely

to adopt new and innovative technologies or

techniques from around the world.

What Canada has to offer for Lithuanian businesses and entrepreneurs

Source: OECD Economic Outlook, No.100, November 2016 Source: OECD Economic Outlook, No. 100, November 2016

Sector Strengths: Information and

Communications Technology

• The EU is the world’s largest importer of ICT services and the 4th largest importer of ICT products, with imports totalling $82 billion and $310 billion respectively.

• The ICT industry is the largest private-sector R&D investor in Canada. In 2012, just 22 Canadian companies spent more than $100M on R&D and 9 were in the ICT sector.

• The digital gaming industry in Canada, made up of 329 studios, is ranked as the third largest in the world.

• A 2014 KPMG study found that Canada offers the lowest business cost structure and the lowest business tax burden among the G-7 countries for telecom equipment firms.

Sector Strengths: Clean Technologies

• Canada’s cleantech industry has been growing 3-4 times faster than our overall economy. With 800+ firms, the sector employs more people than the forestry, pharmaceutical or medical device industry.

• 87% of Canadian clean-tech companies are exporters. We are the EU’s 13th largest supplier of clean tech products.

• Canada is also a leader in renewable energy, which supplies 63% of our electricity needs.

• Canada also participates in Mission Innovation, a global initiative of countries, working together to accelerate clean energy innovation.

Sector Strengths: Pharmaceuticals

• Canada is home to the 8th largest pharmaceutical market in the world, and continues to grow at a compound annual rate of 2.2%.

• Canada is home to the world’s ten largest pharmaceutical companies, several of which manage R&D and manufacturing operations.

• CETA offers enhanced IP protections for pharmaceutical

firms.

Competitive Alternatives, KPMG’s Guide to International Business Location Costs and Competitive Alternatives, Special Report: Focus on Tax.

Connect with the

TCS

tradecommissioner.gc.ca

Connect with the TCSRestez branchés avec le SDC

Egle JurkevicieneOffice of the Embassy of CanadaJogailos gatve 4, VilniusPh: +370 5 249 0950Egle.Jurkeviciene@international.gc.ca