The trade agreement between Canada and the European Union that’s been called a bellwether for trade against increasing protectionism, has entered into force.
The Comprehensive Economic and Trade Agreement (CETA) was applied provisionally last week, and it’s expected to foster growth for both parties involved.
“This agreement encapsulates what we want our trade policy to be – an instrument for growth that benefits European companies and citizens, but also a tool to project our values, harness globalization and shape global trade rules,” said Jean-Claude Juncker, president of the European Commission. “Now it’s time for our companies and citizens to make the most out of this opportunity and for everyone to see how our trade policy can produce tangible benefits for everyone.”
[Read more about the CETA in relation to the U.S.: EU-Canada Trade Pact Could be Bellwether for Trade in Light of U.S. Protectionism]
The agreement removes tariffs on roughly 98 percent of products traded between the two sides, and underlines a commitment to sustainable development.
“Things are about to change for our exporters,” EU Commissioner for trade Cecilia Malmström said. “The provisional entry into force allows EU companies and citizens to start reaping the benefits of this agreement right away.”
When it comes to Brexit, U.K. firms will be able to take all advantages under CETA until the day the U.K. officially leaves the EU.
On the Canadian side, tariffs of up to 18 percent on clothes and shoes from Europe will drop to zero.
CETA, according to Canada’s minister of international trade Francois-Philippe Champagne, “will boost trade with our second largest trading partner while protecting labor rights and the environment. By putting the interests of our middle class at the center of our discussions, Canadian companies from all regions and all sizes will benefit from unprecedented access to the EU, a huge market of more than 500 million people with annual imports that are worth more than Canada’s GDP.”
Advisors from KPMG said the trade deal has been long awaited.
“It is a good thing for U.K. businesses as Canada is the U.K.’s fifth biggest trade partner outside the EU. This trade agreement will have significant implications across all sectors for U.K. businesses,” a KPMG statement on the news said.