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Economic & Political Implications of CETA

Economic & Political Implications of CETA. Patrick Leblond ECSA-C Business Roundtable ECSA-C Biennial Conference Montreal, 8 May 2014. Joint Study (Oct. 2008) Results. Jump in GDP € 11.6 billion in the EU (0.08% of GDP) €8.2 billion in Canada (0.77% of GDP)

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Economic & Political Implications of CETA

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  1. Economic & PoliticalImplications of CETA Patrick Leblond ECSA-C Business Roundtable ECSA-C Biennial Conference Montreal, 8 May 2014

  2. Joint Study (Oct. 2008) Results • Jump in GDP • €11.6 billion in the EU (0.08% of GDP) • €8.2 billion in Canada (0.77% of GDP) • Increase in trade (€25.7 billion or 22.9%) • Goods (€18.6 billion) • Canada to EU: €6.3 billion (24.3%) • EU to Canada: €12.2 billion (36.6%) • Services (€7.0 billion) • Canada to EU: €4.8 billion (14.2%) • EU to Canada: €2.2 billion (13.1%)

  3. What are the key drivers? • Tariff elimination • Goods will be more competitive on the EU market • EU goods will be cheaper for Canadian firms • Greater market access • E.g., beef and pork • Subnational public procurement • New investments • Canadian, European and third-country firms • Labour (skilled) mobility • Important for professional and after-sale services • Regulatory cooperation and mutual recognition

  4. Conditions • Canadian firms must meet EU standards for goods and services and vice versa • Effective and efficient rules of origin • Provincial and municipal implementation of public procurement rules • Agreement on the MR of professional qualifications • Provinces and provincial orders • Obtain necessary working permits rapidly • Cooperation between regulators in trying to harmonize new rules and regulations • SME capacity to develop the other market

  5. Conclusions • Who knows exactly what the economic implications will be? • We do know that trade liberalization increases trade and ultimately GDP • Benefits might be relatively “marginal” but as long as they are positive on a net basis, then we should do it • Why would we give up a potential of $10-20 billion more for the Canadian economy? • But many benefits will take time to materialize, if they ever do (“walk the talk”) • Pressure and monitoring from business and political leaders will be key to ensure that many conditions are satisfied • Not doing CETA might make things worse if the EU and the US manage to agree to a TTIP

  6. THANK YOU!

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