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Five years of free trade with Europe



The anniversary has gone well under the radar, but let me remind you that the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union celebrated its fifth anniversary on September 21. Even if there is nothing to write to his mother, you may say, the event deserves that we stop there a little, in order to make a progress report on this commercial agreement. whose full potential we are still far from having exploited.

Remember, we were told that this new economic and trade agreement was going to open doors for Quebec companies to a market of more than 500 million consumers in 28 European countries. This reality of five years ago, however, has changed since the victory of Brexit and the withdrawal, two years ago, of the United Kingdom from the European Union.

So today we’re talking about a trade agreement that gives us access to 446 million consumers in 27 European countries, which is still far from negligible.

Five years after the signing of the Canada-European Union agreement, however, we note that England’s withdrawal from CETA combined with the sharp slowdown in trade between Quebec and Europe, which occurred at the height of the pandemic in 2020, have had a negative impact on the gains that this liberalization of trade barriers should have produced.

Despite everything, Quebec’s exports to European Union countries have increased by 12% in five years to reach $9.5 billion in 2021, compared to $8.5 billion in 2016.

The trade partnership with Europe also benefits Quebec more than the rest of Canada since product sales to the EU represent 9.5% of all Quebec exports, compared to only 4.8% for Canada.

EU countries have also taken much better advantage of the openings created by the signing of CETA, since their exports to Quebec have jumped 23% in five years to reach 21.5 billion last year, compared to 17 .5 billion in 2016.

“Quebec businesses must take better advantage of this market of 445 million Europeans, especially since the war in Ukraine is forcing European countries to find new allies,” observes Geneviève Brisson, Quebec’s Delegate General in Brussels.

Mme Brisson notes that the European Union alone is responsible for 25% of all foreign investment in Quebec, behind of course the United States, and that it monopolizes nearly 21% of all Quebec imports.

“Our challenge is to make CETA better known so that Quebec companies in the agri-food, aeronautics, biotechnology, green and creative technologies and even forest products sectors develop more sectors in it,” underlines the General Delegate.

Underutilized potential

This is also the observation made by Pierre Marc Johnson, who was the chief negotiator for Quebec of CETA between Canada and the European Union.

“The main objective of this agreement was to give us the capacity to better attack a new market of 445 million consumers and to have access to all sectors of activity of the industrial market without price barriers. »

Five years later, only 60% of Quebec companies doing business in Europe are using the advances given to us by CETA, the others are still paying fees because they don’t bother to go through the administrative procedures.

Pierre Marc Johnson, who was CETA’s chief negotiator for Quebec

“Our trade has grown, but the momentum has been slowed by the disruption of supply chains due to the pandemic. 2020 has been a disastrous year,” notes Pierre Marc Johnson.

According to the chief negotiator for Quebec, the next five years will allow us to better assess the effects of the agreement, on the condition that we continue our efforts and that we tackle, in particular, niche markets, such as IT, artificial intelligence and even agricultural and industrial products.

In five years, sales of cranberries in the European Union have increased by 288%, maple syrup by 70%, aluminum articles by 204%, unwrought aluminum by 44% and titanium by 86%, explains Geneviève Brisson, General Delegate of Quebec in Brussels, but the statistics also inform us that Europeans have sold more miscellaneous goods in Quebec, particularly in the agri-food sector.

Quebec agricultural producers were opposed to CETA because it wanted to open the Canadian market to an increase in European cheese exports, ie an additional 17,000 tonnes per year.

It was a bad deal at the time and, five years later, it’s still a bad deal for Quebec producers who produce 50% of Canadian cheese and 60% of fine cheeses.

Charles-Félix Ross, General Manager of the Union des producteurs agricole

“We had to obtain better access to Europe for our beef and our pork and we only obtained 3% of our tariffed quotas while European cheese producers reached 94% of their quotas”, deplores Charles-Félix Ross, Director General of the Union of Agricultural Producers.

Certainly, the entry into force of CETA did not have the whiplash effect that the Canada-United States Free Trade Agreement had when it entered into force in 1989, when bilateral trade between Canada and the United States has exploded by 167% in ten years.

Proximity markets are always those that we seek to conquer first, but once this is done, we must also look further and take advantage of the opportunities that lend themselves to it. The abolition of barriers is a good one and we must work on it.

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