Comprehensive Economic and Trade Agreement Reached Between Canada & EU
The state of Canada-Europe trade is undergoing a significant change and Canadian SMEs looking to or currently exporting within Europe should take notice. The Government of Canada recently announced an Agreement-in-Principle of the completed text of the trade pact, which pushes the Agreement forward into the next phase – translation and final legal review.
The free trade deal, which has been in negotiations since 2009, will bring about significant changes in the ways in which Canadian businesses interact with Europe. It will significantly reduce trade barriers, tariffs, and bring Canada and Europe much closer on regulations and standards. This will reduce overall entry costs to assist Canadian companies in exporting and doing business in Europe. The Government projects that the Agreement will result in a 20% boost in bilateral trade and a $12B increase to Canada’s GDP. With more coverage of the Agreement expected in the coming weeks and months, it’s worth reviewing how this could potentially impact your small business.
How is to the Canada/ EU Trade Deal going to Impact Small Business?
In general, small businesses will see many barriers to exporting lowered or removed when the Agreement goes into place. The Agreement will aim to make international trade less financially onerous – through the reduction or removal of tariffs – and less bureaucratically stressful – through shared product, labour, and environmental standards.
“This is another important step toward the implementation of the historic Canada-EU trade agreement, which will create jobs and economic opportunities for hard-working Canadians in every region of the country. Our upcoming EU trade mission to the UK will help Canadian businesses secure their first-mover advantages in the largest and most lucrative market in the world, even as translation and final legal review of the text proceeds.”
– Ed Fast, Minister of International Trade
Financial Impact of Canada/ EU Trade Agreement
Companies can expect to see an overwhelming reduction in tariffs to help make exporting to Europe more financially practical. The Government expects that nearly 98% of the more than 9,000 tariff lines will be made duty-free for Canadian goods. This reduction includes the removal of over 95% of agricultural tariffs and 100% of non-agricultural ones. Simply put: this will lead to increased market access for Canadian companies.
Bureaucratic Impact of Trade Agreement between Canada & EU
In addition to the reduced financial barriers, the Agreement will make doing business in Europe much more simple by bringing Canada and Europe closer together on a range of standards and protocols. The Agreement will bring in measures for increasing bilateral recognition of product standards and technical regulation. What this means is that businesses won’t necessarily need to spend the time and money in obtaining a certification in Canada and the equivalent in Europe. Ultimately, this should remove a significant headache that businesses have when considering international market opportunities.
Leveraging Government Funding to Maximize Export Potentials in Europe
There are a variety of small business grants that Canadian small businesses can utilize to maximize their export potentials in Europe. Government business grants can be used to help fund projects to obtain equipment, train employees on new technology or processes, and explore new markets. Although the Agreement has not gone into effect yet, companies can leverage different small business grants to start doing business in Europe.
Export Market Access and the Ontario Exporters Fund
Companies in Ontario considering exporting to Europe in light of CETA can leverage the Export Market Access grant for marketing and trade show initiatives. The fund offers coverage of 50% of eligible expenses to a maximum of $50,000. The Ontario Exporters Fund to help cover the costs of hiring an export manager, and covers 50% of eligible expenses to a maximum of $80,000.
Learn More about Small Business Grants and Loans Available to Exporters
These programs have specific eligibility requirements and application timelines. Consider attending a free funding workshop or webinar to learn more about small business grants and government funding opportunities to maximize their export potential.