EU-Canada Comprehensive Economic and Trade Agreement: guidance for UK exporters
Published 18 September 2017
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This publication is available at https://www.gov.uk/government/publications/eu-canada-comprehensive-economic-and-trade-agreement-guidance-for-uk-exporters/eu-canada-comprehensive-economic-and-trade-agreement-guidance-for-uk-exporters
1. CETA in summary
CETA is a trade agreement between the EU and Canada. By boosting trade, CETA will create jobs and growth – and new opportunities for your business.
CETA is the most extensive EU free trade agreement to date. It will benefit UK companies by getting rid of 98% of the duties they have to pay at Canadian customs. The same will apply to Canadian businesses exporting to the EU.
The main benefits for UK companies are:
- elimination of nearly all Canadian import duties
- increased opportunities for UK companies to bid for public contracts in Canada
- strengthening of UK firms’ ability to access Canadian services and investment markets
- improvement of the framework for temporary movement of company personnel and service providers between the EU and Canada
- strengthening of the Canadian intellectual property environment
- strengthening of the cooperation between European and Canadian standard setting bodies
With a shared history, political system and language Canada is already a welcoming environment for UK business. CETA will ensure this ease of doing business is maintained, and increased in many sectors.
In addition to being a large developed market, Canada also provides an excellent starting point for entering the other regional markets. Canada has a free trade agreement with the United States and Mexico, as well as many Latin American countries.
More information on the local business environment in Canada can be found in the exporting to Canada guide.
2. Food and drink
The Canadian market has a high demand for quality imported food and drink products. CETA will eliminate most customs duties on farm produce, processed foods and drinks. There will also be a substantial reduction in non-tariff barriers.
2.1 Beef
CETA eliminates all tariffs. UK companies will now be able to compete on a level playing field with US competitors when exporting beef to Canada.
2.2 Cheese
Under CETA, Canada has agreed to increase cheese import quotas. The quota quantities will increase gradually over several years to reach 16,800 tonnes (16,000 tonnes in CETA, and 800 tonnes that will be added to the EU portion of the existing World Trade Organization quota thanks to CETA), with an additional 1,700 tonnes for industrial cheese.
2.3 Prepared foods
CETA will eliminate tariffs on a number of UK export products. These include:
- jams
- marmalades
- sauces
- condiments
- mayonnaise and salad dressings
2.4 Alcoholic beverages
Annual alcohol sales total C$36.8 billion in Canada, with more than 3 billion litres consumed. CETA will mean the elimination of Canadian customs duties payable on the import of cider products, wines and spirits originating from the UK into Canada. Alongside tariff reduction, blending requirements for bulk spirits will be removed. Currently, UK companies can only import bulk spirits into Canada if they are to be blended with domestic spirits before bottling.
CETA also changes how cost-of-service fees are charged by liquor boards. The fee will now be applied based on volume, not value. This means that exporters of the UK’s comparatively higher value products will no longer be disadvantaged in comparison with Canadian producers.
3. Manufactured products
Nearly all tariffs on manufactured products will be eliminated immediately on CETA’s implementation. Phase outs vary by product. Full details can be found in CETA Annex 2-A Tariff Elimination Article 3.
Exporters should review the product specific rules of origin to ensure their exports will be eligible for tariff elimination. The Protocol on rules of origin and origin procedures provides specific details of the degree of production needed in the EU.
CETA reduces testing, certification costs and inconvenience for producers exporting certain products because the EU and Canada agree to accept each other’s conformity assessment certificates for specific sectors, for example construction, machinery and ATEX equipment. This means that a designated conformity assessment body in the UK can test UK products for export to Canada according to Canadian rules, and vice versa. This is particularly helpful to smaller companies as time to market is shortened - products are not required to be tested and certified in the country of destination. The CETA Protocol on the mutual acceptance of the results of conformity assessments provides more information.
Additionally, CETA provides a mechanism for Canada and the UK to mutually accept the results of each other’s ‘good manufacturing practices’ inspections of pharmaceutical manufacturers, reducing the number of duplicative inspection and certification requirements for pharmaceutical manufacturers.
4. Services and investment
Working under CETA’s tariff elimination provisions, companies will have an improved opportunity to provide services to, and invest into, the Canadian market.
For UK companies with an established presence in Canada, CETA will make it easier to transfer talent where it’s needed between their UK and Canadian operations. Specialists and senior personnel will be permitted to stay for the lesser of 3 years or the length of the contract, with the possibility of up to an 18 month extension. Graduate trainees will be allowed to stay the lesser of 1 year or the length of the contract.
For firms and individuals providing a service on a contractual basis to a Canadian company, CETA also contains provisions to facilitate a UK company’s ability to provide that service. Conditions apply to the length of stay and covered sectors.
Further details can be found in CETA Chapter 10 - Temporary entry and stay of natural persons for business purposes.
The specific application processes will be made available on the Canadian government website.
5. Procurement and infrastructure
CETA gives UK companies access to bid for public contracts in Canada. UK companies now have increased opportunity to supply goods and services at the federal, provincial, and local levels of government.
Infrastructure is high on the agenda across all levels of government in Canada with the provincial public contracts market worth twice as much as the federal one. Through the implementation of CETA, UK experience and expertise can now help meet Canada’s ambitious infrastructure goals.
5.1 Procurement
Canada has opened up the opportunity to bid on contracts at all levels of government with an extensive list of covered entities. As a result of CETA, Canada has also agreed to make the tendering process more transparent by publishing its federal and provincial public tenders on a single procurement website.
The thresholds for opening a contract vary by procuring entity, but are generally:
| Type of Organisation | Goods | Services | Construction |
|---|---|---|---|
| Central government | £120,473.34 | £120,473.34 | £4,633,590 |
| Sub-central government | £185,343.60 | £185,343.60 | £4,633,590 |
| Other entities / Quangos | £328,984.89 | £328,984.89 | £4,633,590 |
The above conversion from Special Drawing Right (SDR) to GBP is based on International Monetary Fund (IMF) values on 11 September 2017.
6. Intellectual property (IP)
Chapter 20 of CETA is intended to:
- facilitate the production and commercialisation of innovative and creative products
- facilitate the provision of services
- achieve an adequate and effective level of protection and enforcement of intellectual property rights.
For pharmaceutical companies, Canada will introduce a supplementary patent protection period under CETA to compensate for time lost on the market due to regulatory approvals.
7. Benefitting from preferential tariff treatment under CETA
If you export goods over €6,000, you need to be a Registered Exporter (REX) to benefit from CETA’s reductions in customs duty. Registered Exporters must include their REX number in their origin declaration. HMRC has already pre-registered some exporters.
If the value of your exports never exceeds €6,000 you do not need to be registered, but you still have to complete an origin declaration.
All UK export goods must have undergone sufficient production in the EU.
Read the Protocol on Rules of Origin and Origin Procedures for details on rules of origin requirements.
8. How DIT can help
The Department for International Trade Canada provides professional and personalised assistance in Canada through the High Commission in Ottawa, and offices located across the country in Vancouver, Calgary, Toronto, and Montreal.
For all trade inquiries, UK companies must enter a submission through our North American export portal.
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