In his brief opening remarks at the Belgian Canadian Business Chamber seminar held at the Dentons LLP Toronto offices on May 29, H.E. Raoul Delcorde, Belgium’s ambassador to Canada noted that the long and detailed CETA negotiations were necessary to ensure a thorough and path-breaking trade agreement.
As H.E. Marie-Anne Coninsx prepares to return home to Brussels at the end of the summer after serving as EU Ambassador to Canada for four years, she shared some of her personal thoughts and recollections about her stay in Ottawa. It was a critical time in Canada-EU relations as both sides ratified the Comprehensive Economic & Trade Agreement (CETA) after eight years of negotiation.
She described the successful conclusion CETA as “a momentous achievement – the most ambitious free trade agreement that either Canada or the EU have ever signed (with anyone), a real “gold standard” of free trade agreements.”
Some of the last-mile milestones included:
*the signing of the CETA treaty in October 2016 despite the “Wallonia issue”.
* the European Parliament’s Consent – 15 February 2017 at which Prime Minister Trudeau, spoke at the European Parliament Plenary in Strasbourg.
*Royal Assent in Canada on 17 May 2017
Her advice to Canadian exporters is to move quickly so they can enjoy first-mover advantages in the world’s largest importing market. The European Union is a market of 500 million affluent, diversified consumers. It is the biggest, the most integrated and most competitive market in the world.
CETA is a momentous achievement that will reduce most product tariffs immediately and virtually all tariffs within seven years after its entry into force. More important, CETA offers preferential treatment not just for goods but also for services and investment.
She also reminded the audience that Belgium can serve as an ideal gateway to the EU’s single market. Once Canadian products or services are established there, Belgium they will be able to circulate freely within the entire EU.
Bob Sacco, KPMG’s GTA Trade & Customs Leaders pointed out that since Canada which is also a member of NAFTA, can also serve as an intermediary for European products being shipped to the US and Mexico. He also expressed his hope that CETA will become law on or before July 1, Canada’s 150th birthday.
After CETA comes into effect, he foresees initial increased trade in apparel and footwear that will rise by about 8 per cent. For the food and alcoholic beverages sectors will grow by 11.5 per cent. Canadian exporters of agricultural products, especially fresh fish and other seafood as well as forestry products will also do well. As for EU imports, Canada will eliminate the existing 18 per cent duty on CETA apparel imports.
On other trade issues, he believes that nothing will happen for at least two years in the UK regarding Brexit. In other direction, despite the US loss of interest in TPP (the Trans-Pacific Partnership), it still makes sense for Canada since it opens major Asian markets such as Japan.
Xavier Van Overmeire, Montreal-based partner with Dentons outlined various business strategies for Canadian forms seeking to set up offices or operations in the EU. These include setting up a EU subsidiary controlled by the Canadian parent. Another approach is arranging distributorships with partners. However, he included a caveat that distributors over there are very well protected under EU laws. Another is possible format is technology transfer agreements.
He also suggests Canadian executives learn as a much as possible about the backgrounds of potential EU partnerships candidates for hybrid formats such as joint ventures.
Closing out the session, André van der Heyden, vice-president & COO Belgian Canadian Business Chamber reminded the audience of Brussels’ numerous strengths. These include affordable office space, multilingual well-educated staff, access to numerous senior EU bureaucrats and regulators as well as Belgium’s strategic location and its modern, well-connected logistics infrastructure.
These and other advantage make Brussels the ideal place for Canadian firms to set up their regional EU head office.
Agenda & Presentations can be accessed here:
2017-05-29 BWB Agenda
Dentons – BCBC BwB – 2017-05-29
KPMG – Belgium Chamber of Commerce – May 29, 2017
BwB – BCBC
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