By Tom Peters
A Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union has the potential to vastly improve Canada’s trade with the EU and its 27 member countries, but there needs to be greater awareness of this deal and its benefits, delegates to the annual Halifax Port Days were told.
“We have to urge policymakers that there is a need for communication,” said Stefan Borst, General Delegate of the Board of Management for LANXESS of Belgium. Borst, one of four panelists discussing opportunities for increased trade with Europe, said there is no official version of the agreement “out there” so it is vital that policymakers make that happen “and sell this.” Panelists agreed the buzz around CETA has been lukewarm at best in both Canada and the EU, and urged consultants, lobbyists and industry to “step up and explain this deal,” said Luc Arnouts, Chief Commercial Officer for the Port of Antwerp.
Arnouts told delegates that he is “absolutely optimistic” about CETA, and Belgium believes in a liberalized market. He said tariffs will go to zero and the agreement, which he expects to be in place by mid-to-late 2015, will help harmonize regulations and product certification. “All of this creates optimism for more business and ease of doing business,” he said.
Panelist Louis Theriault, Director, Conference Board of Canada, said in an interview, that CETA is much more than eliminating tariffs, and deals with such items as service agreements, procurement contracts, tariffs and intellectual property protection. He said Canadian companies doing business in the EU will find it to be much different from the North American Free Trade Agreement, which largely dealt with tariffs. “The EU is 27 countries and each is in a different stage of economic development. There are some common denominators, but if you go to the U.K., Germany, France and Spain in one day, you would see a totally different business picture, as well as consumer preferences that are different everywhere. So your marketing strategies will have to comply to with the local rules. Sugar content for certain products, for example, can be tweaked up or down, and countries use that as a non-tariff wall to prevent competitors from coming into the market. So CETA will help level the playing the field,” he said.
There have been discussions that protectionist groups in Germany could scuttle the agreement and the issue was raised in the Port Days session. But Theriault said he sees this as a “political game being played beyond the economic advantages” and shouldn’t be mixed with developing CETA. “The political story has to be dealt with on its own,” he said. Economic interests are behind the development of the agreement and there have been many parties at the negotiating table. These “tough negotiators, with the economic interests of their constituents a priority,” have developed something that is close to being ratified, he said, and “this last twist the Germans are throwing at this, I would say is out of the realm of the norm, totally.”
There have been suggestions by both government and industry that CETA will increase Canada’s trade with the EU by 24 per cent, but Theriault is not ready to put a figure on any increase. “There are all kinds of numbers being tossed around and yes there is a lot of potential. Can we say 20 per cent, can we say more? I think at this stage I would say there is a lot of potential,” he said.
But whether CETA becomes a reality or not, Theriault said Canadian companies need proven strategies to broaden their export markets. “It is competitiveness that is at stake for Canada. It is not just about the EU. We are talking about trade performance for a trading country like Canada,” he said. Theriault said trade performance in Canada “has been non-existent for the last 10 or 15 years so, for the sake of Canada’s competitiveness, we need to pump up our game, CETA or not.”
Only 8 per cent of Canada’s exports go to Europe and trade with the U.S. is shrinking, said Theriault, so this gives Canada a chance to expand its markets. Stefan Borst said Canada is a “natural fit” for a trade agreement with the EU. It’s not the biggest market, he added, but it would give EU countries “an entry point into the North American market.” Panelists cited manufacturers of chemicals, producers of seafood and agricultural products, manufacturers of household appliances and other goods, the aerospace industry, the sale of services, mining equipment and motor vehicles as all potential beneficiaries of CETA.
Graham Fraser, Halifax Port Authority’s Director of Development and Growth in Europe and based in Liverpool, said the greatest impact of CETA on Halifax would be in project, heavy lift and breakbulk cargoes that are destined for the $122 billion in mega projects that are either planned or under way in Atlantic Canada. “CETA has excited them in Europe. I have been talking to people, shippers, etc, and they are looking for long term opportunities and CETA will be a catalyst to that,” he said.
Patrick Bohan, Director of Supply Chain Solutions for Halifax Port Authority and a panelist in a discussion on supply chain solutions for the mega projects, said Halifax, with its recent infrastructure investments in breakbulk and general cargo facilities at Richmond Terminals, has already taken steps for CETA. With the port’s Halterm and Ceres terminals able to handle containerized cargo as well as roll on/roll off cargo, Bohan said “there is not much you can throw at this port that it can’t handle. Europe is a natural supply point for many mega projects and this plays into what we are very good at. We have all the facilities and the skills here to handle all the various cargoes,” he said.