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REPORT (2023/2001(INI))

On the implementation of the EU-Canada Comprehensive Economic and Trade Agreement (CETA)

A-9-2023-0400

Committee on International Trade · Rapporteur: Javier Moreno Sánchez

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Parliament's resolution on the implementation of the EU-Canada Comprehensive Economic and Trade Agreement (CETA) reviews how the agreement has worked since it was provisionally applied in 2017. It finds that trade in goods and services has grown, that most pre-agreement concerns about Canadian agricultural imports did not materialise, and that firms use the tariff preferences more than before. It asks for full implementation of CETA, better enforcement of geographical indications, a more flexible Canadian cheese quota, and support for small and medium-sized enterprises (SMEs). It calls on Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Italy, Poland and Slovenia to ratify CETA so that investment protection applies and the agreement can be updated. It wants a review of CETA after ratification to add a dispute settlement mechanism for trade and sustainable development, including sanctions as a last resort, and stronger provisions on indigenous peoples' rights.

Committee position. The Committee on International Trade recommends that Parliament adopt the resolution, which finds that CETA has delivered economic gains but needs full implementation, ratification by ten member states, better enforcement of geographical indications and a review with a stronger sustainable development mechanism.

Key points

  1. CETA has strengthened EU-Canada trade ties and provides a stable framework, with increased trade in goods, services and investment.
  2. The agreement helps the EU and Canada diversify supply chains and secure trade flows amid geopolitical uncertainty, and supports access to critical raw materials for the green transition.
  3. Stakeholders are largely content with implementation, including the work of CETA committees, the regulatory cooperation forum and the domestic advisory group.
  4. The EU uses almost all its tariff rate quotas, while Canada uses only a very small part of its beef quota; preference use is higher for SMEs and agri-food than for large firms and manufacturing.
  5. Challenges remain on enforcing geographical indications and managing the cheese quota.
  6. Parliament recommends raising awareness of CETA, giving SMEs the tools to trade under it, and fully implementing all its provisions.
  7. It urges Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Italy, Poland and Slovenia to ratify CETA, which is needed for investment protection and updates such as a review of the sustainable development chapter.
  8. Trade in goods between the EU and Canada rose by 66% between 2016 and 2022 and trade in services by 46%; EU agri-food exports to Canada rose by 62% and imports by 52%.
  9. Jobs supported by EU exports to Canada rose from 624 000 in 2017 to more than 700 000 in 2021, and the first Mutual Recognition Agreement under CETA, for architects, was concluded in 2022.
  10. Preference utilisation rates for both the EU and Canada stood at 60% in 2022, up from 40% and 52% in 2018; the beef and veal quota was only 3% used in 2021, while the cheese quota was 98% used.
  11. Canada has not satisfactorily implemented recommendations on traceability and quality controls for beef and pork exports, and CETA does not apply regionalisation to fruit and vegetables.
  12. Parliament calls for a review of CETA after ratification to introduce a dispute settlement mechanism for trade and sustainable development, with sanctions as a last resort, and stronger provisions on indigenous peoples' rights.

Who is affected

  • EU and Canadian businesses, especially SMEs, which are encouraged to use CETA preferences and are offered support tools.
  • EU farmers and agri-food exporters, who benefit from increased trade but face concerns over standards and quotas.
  • EU holders of geographical indications, who need better enforcement of their protection in Canada.
  • Ten EU member states — Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Italy, Poland and Slovenia — urged to ratify CETA.
  • Canada, called on to improve its tariff rate quota management and meat inspection systems.

Figures and deadlines

  • Trade in goods between the EU and Canada increased by 66% between 2016 and 2022.
  • EU-Canada trade in services increased by 46%.
  • EU agri-food exports to Canada increased by 62% and imports by 52% since provisional application.
  • Jobs supported by EU exports to Canada rose from 624 000 in 2017 to more than 700 000 in 2021.
  • Preference utilisation rates for both the EU and Canada stood at 60% in 2022, compared to 40% and 52% in 2018.
  • The utilisation rate of the tariff rate quota for beef and veal imports to the EU was only 3% in 2021.
  • The tariff rate quota utilisation rate for EU cheese exports stands at 98% on average.
  • The environmental goods trade grew by 27% since provisional application started.