Canada's CETA Export Challenge

The Comprehensive Economic and Trade Agreement seems to be the most ambitious agreement at the world trade organization, but it is already getting heavy support from most Canadians. Of course, every person has a different opinion about it, with some criticizing and others supporting it. Still, regardless of what is included in the final copy, CETA is bound to be a reality. It will open doors for Canadians, giving them access to 28 countries, which can be considered the world’s largest market.

Negotiations

Several parties have been involved in the negotiations, with each having its agendas as driven by the respective regional and political interests. It took four years for all the municipalities, provincial authorities, and the general public to reach a consensus that will aid the entire Canadian population in free exportation. The agreement aims to open a market of up to 500 million customers, which is enough to convince even the harshest government critics that CETA is one of the best deals for the region.

Support and Opposition

Most business owners and trade officials seem to be elated about the opportunities the agreement presents, but some sectors are still raising concerns that can be deemed legitimate. One of them is the possibility that increased competition among popular brand names manufacturing European products will affect the domestic market negatively. However, despite the misgivings from the specific sectors, the agreement is showing some great potential, given the way disparagers started opposing it before knowing everything it entails.

Several comments to the effect that CETA will have minimal short-term economic benefits, make little difference in the trade volume, and add minimal benefit to the country have been made in different regions. It is usual for such concerns to arise, and the solution is in having discussions that will settle them. Such comments also show that critics have the freedom to air their opinions, which can result in more negotiations and adjustments.

However, the fact remains that CETA will grant access to a vast market that represents up to 20% of the world’s production. The joint announcement between the European Union and the Canadian Government also showed that Canadians could expect up to $17 trillion in economic activity annually.

Pros and Cons

The question now becomes, “what next?”. Waiting and arguing about the possible changes that can be made to the agreement will likely result in more products from the Europeans flooding the Canadian market. In that case, many sectors will be affected by the influx of duty-free items and services. But, at the same time, CETA will also bring in millions of customers to purchase Canadian products and services.

Most Canadians can attest to the country’s reputation being its main asset in Europe. It is the reason we are generally welcomed with a smile when we travel and identify ourselves as Canadians. The kind of win-win attitude we have and the promotion of fairness give Canadians an advantage over other nationalities when it comes to exportation. As a result, we get opportunities that other people would not be given.

The stability of the country is another factor that can make CETA more beneficial. When other countries around the world are struggling with economic instability, Canada’s fairness in partnerships, reliable banking industry, warehousing services, and stable economy are promoting our reputation. The positive image is further boosted by the friendly policies that allow numerous immigrants to settle in the country.

Some may argue that despite these “soft” attributes, timely delivery, competitive pricing, transportation costs, and distance will affect Canada’s assertiveness in Europe. That may be the case, but it is also impossible to challenge the fact that Maple Leaf provides crucial opportunities to begin new business relationships overseas.

Even though most business owners focus on selling the majority of their products to neighbouring customers, our reputation in the international market places us ahead of other nations. This is because we are already liked in Europe, which means we already have the metaphorical “foot in the door.”

Questions still arise

One of the crucial questions that still linger is about the fall of tariff barriers. Will it allow exporters to reach some of the countries in the European Union? Are there specific markets that our products and services will thrive in? Have we established strong networks, and will we be able to move forward at the right time?

It remains clear that Canadians have the best negotiating skills, as proven by NAFTA, FTA, and now CETA. Many other agreements have shown the same, but the relationship between Canada and the United States has diminished our competitive prowess – as proven by Mexico not being one of our strongest export markets long after signing NAFTA. So rather than capitalize on the duty-free relationship we have with Mexico, we focused on making the United Kingdom, Japan, and China our export markets.

Let’s be Realistic

Adequate preparation by the exporters remains a key factor in their success after the opening of European markets by CETA.

The first step is choosing a few markets to focus on and creating networks. We can do this by visiting trade shows, joining the chambers of commerce, getting to know the Canadian trade commissioner in the European countries, and registering with the local business clubs. Next, research potential distributors, agents, and importers to find as much useful information as possible and negotiate with them. Finally, learn the local languages and hire a diverse team from the European countries, especially if they are multilingual. With these steps, we will have the upper hand regardless of whether CETA undergoes modifications or not.

The Game Plan

The fact that every business person always has a “game plan” cannot be ignored in this situation. It is safe to assume that the Americans perceive the CETA agreement as an example, waiting for how everything eventually works out. The USA is already engaged in negotiations with Europe for Transatlantic Trade and Investment Partnership or TTIP, which means they are interested in seeing how CETA turns out for Canada. They may then follow suit and sign the TTIP for their political gains.

It can also be deduced that the 28 countries involved in CETA are hoping that the deal will benefit them for more than just a few years. They could be hoping that the agreement between the 500 million consumers they bring and the 35 million from Canada will grant them access to 450 million new customers, thanks to NAFTA.

Whether Canada will become strategic and proactive to become one of the global leaders in free trade remains to be seen as some seem to think. Only time can tell if our country will make its mark as an international free trade centre or just a negotiator that is good at discovering new opportunities.