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#CETA - EU-Canada trade deal starts to reap rewards for businesses on both sides of the Atlantic

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Friday 21 September will mark the first anniversary of the provisional entry into force of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada. Early signs show that the agreement is already starting to deliver for EU exporters. Commissioner Malmström will visit Canada on 26 and 27 September to take stock of progress.

Whilst in Montreal, the Commissioner will meet with Minister of International Trade Diversification, James Gordon Carr. She will attend the first EU-Canada Joint Committee on 26 September, which is the highest body for the two partners to discuss issues of interest related to the agreement. She will also visit several European and Canadian companies, discuss with company representatives who are already making use of the agreement, and speak at the Université de Montréal on 27 September.

Trade Commissioner Cecilia Malmström (pictured) said: “The EU-Canada trade agreement has now been in action for a year and I'm pleased with the progress made so far. The preliminary data shows there is plenty to celebrate, even at this stage. Exports are up overall and many sectors have seen impressive increases. This is great news for European businesses, big and small. As ever with these agreements, there are certain areas where we have to make sure that we thoroughly implement what has been agreed, making sure that citizens and companies can fully benefit from the new opportunities. This is something I intend to discuss with my Canadian counterparts at the Joint Committee next week. I'm happy to say that our partnership with Canada is stronger than ever – strategically as well as economically. Together, we are standing up for an open and rules-based international trading order. CETA is a clear demonstration of that.”

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Early days but positive trends

In addition to removing virtually all customs duties, CETA has given a boost to the business climate between the EU and Canada, offering valuable legal certainty for EU companies looking to export. Although it is too early to draw any firm conclusions, the initial trade results are pointing in the right direction. Across the EU, the latest statistics available, covering the October 2017 to June 2018 period, suggest that exports are up by over 7% year on year.

Of these, certain sectors are doing especially well. Machinery and mechanical appliances, which make up one fifth of EU exports to Canada, are up by over 8%. Pharmaceuticals, which account for 10% of the EU exports to Canada and are up by 10%. Other important EU exports are also on the rise: furniture by 10%, perfumes/cosmetics by 11%, footwear by 8% and clothing by 11%.

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In terms of agricultural products, there are also some encouraging figures: exports of fruit and nuts increased by 29%, chocolate by 34%, sparkling wine by 11% and whisky by 5%.

Companies that are already benefitting from CETA in different ways include, for example:

  • The consortium of Italian San Daniele ham producers increased its sales to Canada by 35%. Exports of Italian agricultural products to Canada are up by 7.4% overall.
  • Belgian chocolate company Smet Chocolaterie that has just opened their first shop in Ontario, Canada, to cope with extra demand for their products; thanks to scrapping of 15% import duties their sales increased by a fifth compared to year ago. European exports of chocolate to Canada are up 34% overall.
  • Spanish company Hiperbaric making innovative machines for preserving food using high pressure. Thanks to CETA, it is easier for their workers to enter Canada temporarily to install and maintain their equipment.

Company examples from Belgium, Estonia, Finland, France, Ireland, Italy, The Netherlands, Spain, and Sweden are available here.

Background

CETA offers new opportunities for EU businesses of all sizes to export to Canada. The agreement eliminated tariffs on 98% of products that the EU trades with Canada. This amounts to approximately €590 million in saved duties per year once all the tariff reductions kick in. It also gives EU companies the best access ever offered to companies from outside Canada to bid on the country's public procurement contracts - not just at the federal level but at provincial and municipal levels, too.

CETA creates new opportunities for European farmers and food producers, while fully protecting the EU's sensitive sectors. The agreement now means that 143 EU high quality food and drink products (the "geographical indications") can now be sold under their own name in Canada and are protected from imitation.

The agreement also offers better conditions for services' suppliers, greater mobility for company employees, and a framework to enable the mutual recognition of professional qualifications, from architects to crane operators.

CETA has been provisionally in force since 21 September 2017 following its approval by EU Member States, expressed in the Council, and by the European Parliament. It will only enter into force fully and definitively, however, when all EU Member States have ratified the agreement.

The EU has 39 trade agreements with 69 countries in place. The latest agreement concluded by the EU is with Japan.  The EU's trade agreements have been proven to spur European growth and jobs. One example is the EU-South Korea trade deal. Since it entered into force in 2011, EU exports to South Korea have increased by more than 55%, exports of certain agricultural products have risen by 70%, EU car sales in South Korea have tripled and the trade deficit turned into a surplus. 31 million jobs in Europe depend on exports. On average, each additional €1 billion of exports supports 14 000 jobs in the EU.

More information

EU exporter stories

Factsheets

Town and cities exporting to Canada

Text of CETA

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Canada

PESCO: Canada, Norway and the United States will be invited to participate in the project Military Mobility

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Following the requests of Canada, Norway and the United States of America to participate in the PESCO project Military Mobility, the Council adopted positive decisions authorizing the co-ordinator of this project – the Netherlands – to invite the three countries. Canada, Norway and the United States of America will be the first third states to be invited to participate in a PESCO project.

High Representative for Foreign Affairs and Security Policy Josep Borrell said: "Today, the Council approved the participation of the US, Canada and Norway in the Military Mobility PESCO project. Their expertise will contribute to the project and, with it, to improving military mobility within and beyond the EU. This is an area of shared priority and common interest in our transatlantic relations. It will make EU defence more efficient and contribute to strengthen our security."

The decisions by the Council confirm that the participation of Canada, Norway and the United States of America in the PESCO project Military Mobility meets the general conditions as established in Decision (CFSP) 2020/1639 of November 2020. Some of these conditions are political in nature; others are focused on the substantive contribution by the third state to the PESCO project, or prescribe certain legal requirements. The PESCO project Military Mobility is a strategic platform enabling the swift and seamless movement of military personnel and assets throughout the EU, whether by rail, road, air or sea.

This is important to EU security and defence, its preparedness and resilience, as well as to EU CSDP missions and operations. On 5 November 2020, the Council adopted decision (CFSP) 2020/1639 establishing the general conditions under which third states could exceptionally be invited to participate in individual PESCO projects.

EU defence cooperation: Council sets conditions for third-state participation in PESCO projects (press release 5 November 2020)
PESCO factsheet, EEASPESCO Military Mobility
About PESCO
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Climate diplomacy: EU, China and Canada co-convene the 5th Ministerial on Climate Action (MoCA)

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Today (23 March), Executive Vice President Frans Timmermans, China's Ecology and Environment Minister Huang Runqiu and Canada's Environment and Climate Change Minister Jonathan Wilkinson will co-convene the 5th session of the Ministerial on Climate Action (MoCA). The annual meeting, hosted this year by China, will be held virtually for the second time due to the COVID-19 pandemic. The MoCA is the first major ministerial meeting of the year on international climate action, and will be an important stepping stone towards the COP26 in November. Discussions will focus on how to enhance global ambition on emission reductions, while supporting co-operation and solidarity between the Parties. It is also an important forum for understanding country-specific challenges and opportunities in implementing low-carbon, resilient and sustainable policies and measures in a green recovery world. Participants will include ministers from G20 countries and other key parties in the UN climate negotiations. The EU will urge its international partners to follow its commitment to net zero emissions by mid-century and undertake significant emission cuts by 2030 to put their countries on a pathway to uphold their Paris Agreement commitments.

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Lock 'em up or let 'em out? #Coronavirus prompts wave of prisoner releases

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The rapid spread of coronavirus is piling pressure on criminal justice systems globally and has led to a flood of prisoner releases, with the United States, Canada and Germany joining Iran in releasing thousands of detainees, writes Luke Baker.

Germany’s most populous state, North-Rhine Westphalia, announced on Wednesday it would release 1,000 prisoners who are close to the end of their sentences, with sex offenders and violent inmates excluded from the list.

The aim is to free up cells so that quarantined areas can be set up for inmates that contract the disease, with many expected to do so given the tight confinement in any prison facility and the ease with which the virus spreads.

In Canada, 1,000 inmates in the state of Ontario were released last week and lawyers are working with prosecutors to free many more from provincial jails by accelerating bail hearings, among other steps.

“The concern is that a jail sentence can potentially become a death sentence for those that are there,” said Daniel Brown, a Toronto lawyer.

The US state of New Jersey plans to temporarily release around 1,000 low-risk inmates, and New York City’s Board of Corrections, an independent oversight body, has called on the mayor to release around 2,000.

Similar steps are being taken in Britain, Poland and Italy, with authorities set to closely monitor those that are released to ensure it does not lead to a surge in criminal activity or fuel social unrest at a time of national unease.

But while such measures are possible in many developed countries, and may help stem the spread of a disease that has infected more than 420,000 people and killed nearly 19,000, they pose serious challenges in other parts of the world.

In Iran, where around 190,000 people are incarcerated and the coronavirus has infected 25,000 people, the government has announced it will temporarily release 85,000 prisoners, with 10,000 of them being granted pardons.

Depending on how long the crisis lasts - and Iran is already talking about a second wave of infections - criminal justice experts say it may prove difficult to manage a large number of freed prisoners or reincarcerate them.

“The longer this goes on and the more desperate the situation becomes, it may lead to bolder decisions that lead to the release of more violent or more dangerous criminals,” said Keith Ditcham, a senior research fellow in organized crime and policing at Britain’s Royal United Services Institute.

“What do you do when things return to normality? You have a number of undesirables either in your country or traveling globally ... It puts the whole law enforcement effort back by a significant margin.”

INSIDE OR OUTSIDE?

In some countries, the fear is that inmates won’t be released. In Venezuela, human rights groups are concerned about the spread of COVID-19 among a prison population of 110,000 in conditions that are already highly unsanitary.

In Bogota, Colombia, a prison riot over coronavirus left 23 prisoners dead and scores injured, and similar unrest has struck detention facilities from Italy to Sri Lanka.

Sudan announced it was releasing more than 4,000 prisoners as a precaution against the disease.

In Brazil, some 1,400 prisoners escaped from four facilities last week ahead of a lockdown over coronavirus, with only around 600 recaptured so far, authorities said.

Even those calling for prisoners to be freed in the hope it will prevent deaths have faced problems. In Egypt, four women were detained a week ago after demonstrating for releases. They themselves were released after questioning.

“What we’re seeing is quite a seismic change in how law enforcement goes about its business in the coming months,” said RUSI’s Ditcham. “The lesser of two evils may be to release all but the most violent and dangerous criminals.”

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