Seven years in the making, the European Parliament last week ratified the EU-Canada Comprehensive Economic and Trade Agreement, commonly known as CETA.
Its ratification looks likely to remove almost all trade tariffs between the European Union and Canada, and is estimated to increase bilateral trade in goods and services by more than 20 percent, according to a joint EU-Canada study. The trade deal has been regarded by many, including our colleagues at DigitalEurope, as a boost for European tech, particularly for telecoms, cyber security and data storage companies.
So, what do UK tech companies need to know?
- The deal sees the opening of new trade avenues with the Canadian Government, and elements relating to telecoms, banking and e-commerce. Full details of the CETA deal are available here.
- It is the first trade agreement where the EU has agreed to open up its services markets using the “negative list” approach. As a recent report from the House of Commons Library explains, this means that all service markets are liberalised except those explicitly excluded.
- The deal notably did not include components on cross-border data flows and personal data protection rights, which has been a difficult topic in other recent trade deals including TTIP.
- The UK was Canada’s 3rd largest merchandise export market in the world in 2015 and also the largest destination for Canadian direct investment in Europe. Canada’s own trade website identifies cleantech, medtech and telecoms as key areas for trade between the UK and Canada.
- On Brexit, the Canadian Government have previously noted “high uncertainty impacting consumption and investment decisions” relating to the vote to leave the European Union but states that “the UK has a highly accommodative business environment, ranking 10th out of 140 on the World Economic Forum’s recent Global Competitiveness Report”.
- CETA could come into force partially this year, which means UK firms may well be able to see benefits before the UK’s departure from the European Union. However, full implementation will ensue only after clearance by national and regional parliaments, which may prove difficult in an number of instances.
Arguably, CETA sets a standard the UK can build on post-Brexit. With the Canadian Government opening new trade offices in the UK in the Autumn of last year, it is clear that the UK and Canada have solid foundations on which to grow digital trade.
To discuss international trade policy further, or to find out more about techUK’s own International Trade programme, contact Simon Spier