By Brian Dunn

The new French Ambassador to Canada, Nicolas Chapuis, said in a recent interview he is concerned that the level of Canadian investment in Europe is declining and the trend needs to be reversed.

Mr. Chapuis told The Canadian Press that Canadian companies have turned their attention to places like India, China and Latin America at the expense of Europe and one of his priorities is to reverse the trend. He said the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union will open up new investment opportunities for Canadian companies, especially in the area of renewable energy and smart transportation which is growing in popularity to maintain safe, smooth traffic flow in an environmentally friendly and sustainable urban environment.

For Port of Montreal, Europe represents about 43 per cent of its two-way trade, but trade with the region has slowed in recent years. It has partially been replaced by trade with Asia which now accounts for 15 per cent of the port’s traffic, and trade with Indonesia , which now represents seven per cent of the Port’s trade, up from no trade with the region five years ago, noted Port of Montreal head Sylvie Vachon.

Despite the shift towards Asia, the EU is still Canada’s second most important trading partner. In 2012, Canada’s trade with the EU totalled $89.2 billion, consisting of $38.7 billion in Canadian exports and $50.5 billion in imports from the EU. CETA should boost exports to the EU by 20.6 per cent annually, while imports from the EU are expected to increase by 24.3 per cent annually, according to a joint Canada-EU study. It should be noted these figures were for 2014, while the agreement isn’t expected to go into effect before the end of 2016.

Among the main exports expected to benefit from the new agreement are agri-food products including pork and beef, fish and seafood products, certain finished and semi-finished products such as aerospace parts, and pulp and paper. Imports of agri-food products, manufactured goods, machinery and equipment from the EU should increase as most tariffs are reduced to zero. CETA will not only remove 98 per cent of customs duties, but make it easier for Canadians to invest in the EU, and vice versa. CETA will also give Canadian suppliers access to the huge EU government procurement market, valued at $2.7 trillion in 2012, another major source of new export opportunities.

The port of Montreal along with other St. Lawrence River ports and East Coast ports are expecting to handle the bulk of this two-way trade once CETA is enacted. With an efficient and integrated logistics chain, Port of Montreal is in an advantageous position to provide quick access to more than 200 million North American consumers via the St. Lawrence River, noted CargoM. And as certified importers of record by U.S. Customs, Canadian forwarders and shippers have the authority to clear goods being sent from Europe to Canada and the U.S.

CETA is “made to measure for the port of Montreal,” said Sylvie Vachon, President and CEO of Montreal Port Authority. “We already are the leading port on the North American East Coast for trade between Northern Europe and North America’s industrial heartland. With our strategic location between the world’s two largest economic blocs, the EU and NAFTA, Port of Montreal is the natural gateway for Europe.”

Forty-four per cent of the total number of containers handled at the port of Montreal already go to or come from Northern European markets located within the EU. Another 20 per cent are destined for or originate in Mediterranean markets also within the EU. This means that 64 per cent of the port’s container traffic could benefit to some degree from CETA.

“The EU represents a tremendous growth opportunity for Canadian business and CETA, which will reduce barriers to the movement of goods, services and investment between regions, will only enhance the ability of Canadian businesses to succeed in this important market,” Joy Nott, President of I.E.Canada (Canadian Association of Importers and Exporters), told PortInfo, Port of Montreal’s newsletter. “Canada’s East Coast ports are well positioned to benefit from increased trade with Europe. Even without CETA, the EU is Canada’s second-largest trading partner and much of that trade travels by ocean container. Montreal in particular will likely see gains from increased trade in the agriculture and agri-food areas, as well as in the area of some manufactured goods.”

“CETA is poised to boost shipping traffic to Europe from all Eastern Canadian ports,” said Jayson Myers, President and CEO of Canadian Manufacturers & Exporters. “Traditionally, St. Lawrence ports have accounted for the bulk of volume destined for that market (23 million tonnes in 2011, according to Statistics Canada). As a result of CETA, Canadian companies will have preferred access into the European market, so the expectation is that eastern ports will flourish, particularly the port of Montreal.”

CETA is “very positive news” for the port of Montreal, said Claude Comtois, a professor at Université de Montréal and a member of the Interuniversity Research Centre on Enterprise Networks, Logistics and Transportation. “CETA will generate new types of import and export traffic for ports on the St. Lawrence River,” Mr. Comtois said. This includes more vehicles, transportation equipment and agri-food products from Europe and various types of air transportation and rail system equipment from Canada, he added. “One aspect of the agreement is that grains and various types of cereals, pulses and soybeans from the West and Quebec and perishable products such as beef from Alberta and the Prairies and dairy products that are shipped in reefer containers, will gain new markets in Europe. This is very positive for ports on the St. Lawrence, and for the port of Montreal as the only container port (on the river).” CETA might also accelerate investment in Port of Montreal’s container facilities, Mr. Comtois added.

The anticipated increase in European grain demand would be a boon for CanEst Transit, the former Elavator No. 3 at the port of Montreal, according to General Manager Réal Bélanger. The company already exports about 15,000 tonnes of canary seeds and 20,000 tonnes of specialty crops to Europe annually.