Comprehensive Economic and Trade Agreement between the European Union and Canada (CETA)

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1 VDMA Statement Foreign Trade Comprehensive Economic and Trade Agreement between the European Union and Canada (CETA) The negotiations between the European Commission and Canada concerning the Comprehensive Economic and Trade Agreement (CETA) were initiated in June 2009 and finalized in August The Agreement is intended to simplify market access for industrial goods, agricultural products and services as well as public procurement. The European Commission published the text of the Agreement on September 26, In 2013, 19.4 percent of all goods delivered to Canada from Germany came from the engineering industry. When compared to the share of 17.7 percent in 2012, this corresponds to an increase of 9.1 percent. In 2013, Canada ranked 24th in the list of countries of destination of German machine exports with EUR 1.7 billion. From the start of the CETA negotiations, the German mechanical engineering sector had argued in favor of the full elimination of all tariffs, the elimination of technical barriers to trade and simplified rules of origin. Analysis of the individual Chapters Chapter 3 National Treatment and Market Access for Goods Article 5: Reduction and Elimination of Customs Duties on Imports Paragraph 1. Each Party shall reduce or eliminate customs duties on goods originating in either Party in accordance with Annex X-5 and the Schedules set out therein (hereinafter referred to as the Schedules ). For the purposes of this Chapter, originating means originating in either Party under the rules of origin set out in Chapter X (Rules of Origin and Origin Procedures). According to the present tariff reduction lists (Annex X.5), the import tariffs for all mechanical engineering products shall be eliminated by both Parties to the Agreement as soon as the Agreement is in force. This also applies to high-duty products such as rolling contact bearings. VDMA expressly welcomes these provisions. Chapter 4 Rules of Origin and Origin Procedures Protocol Article 2: General Requirements Paragraph 1. For the purposes of this Agreement, a product is originating in the Party where the last production took place if, in the territory of a Party or in the territory of both of the Parties in accordance with Article 3, it: (a) has been wholly obtained within the meaning of Article 4;

2 (b) has been produced exclusively from originating materials; or, (c) has undergone sufficient production within the meaning of Article 5. Paragraph 2. Except as provided for in paragraphs 8 and 9 of Article 3 (Cumulation of Origin), the conditions set out in this Protocol relating to the acquisition of originating status must be fulfilled without interruption in the territory of one or both of the Parties. The general part of the origin procedures protocol largely corresponds to standard protocols on origin procedures found in other free trade agreements. The fact that only the origin declaration on a trade document is intended to be used as certificate of origin, and not an administrative document (EUR.1), is consistent with modern origin procedures protocols. The EU still needs to provide the legal bases for approved exporters. These bases are included in the current drafts of the provisions for implementing the Union's Customs Code and match the standard of other protocols on the rules of origin. Product-Specific Rules and the processing list (Article 5 of the origin procedures protocol combined with Annex 1) Article 5: Sufficient Production Paragraph 1. For the purposes of Article 2, products which are not wholly obtained are considered to have undergone sufficient production when the conditions set out in Annex 1 (Product-Specific Rules of Origin) are fulfilled. Paragraph 2. If a non-originating material undergoes sufficient production, the resulting product shall be considered as originating and no account shall be taken of the nonoriginating material contained therein when that product is used in the subsequent production of another product. Unfortunately, it must be noted that the rules are not uniform when it comes to the HS items relevant for mechanical engineering. For pumps (HS 8413), for example, only a change of the HS subheading or HS heading is considered as providing an originating status. For compressors (HS 8414), a rule pertaining to a value increase is provided as an alternative to the heading change. Similarly, the fact that different rules exist side by side also applies to many other engineering industry items. A reason for this is not identifiable. The VDMA demands that an (exclusive or alternative) value-added rule is implemented categorically for all products relevant for mechanical engineering. On the one hand, issuing a statement of origin in compliance with multiple rules is very complex within normal operations; on the other hand, it is underestimated how many production processes take - 2 -

3 place particularly in mechanical engineering to turn unfinished or incomplete products into finished/complete products. These processes are often very extensive. In accordance with the rules of classification (general provision 2a), unfinished/incomplete goods are to be classified in the same way as the corresponding finished/complete goods. Chapter 6 Technical Barriers to Trade Article 4: Technical Regulations Paragraph 2. A Party that has prepared a technical regulation that it considers to be equivalent to a technical regulation of the other Party having compatible objective and product scope may request in writing that the other Party recognize it as equivalent. Such a request shall be made in writing and set out the detailed reasons why the technical regulations should be considered to be equivalent, including reasons with respect to product scope. The Party that does not agree that the technical regulations are equivalent shall provide to the other Party, upon request, the reasons for its decision. On principle, the VDMA supports all efforts that will lead to a harmonization of the technical regulations. However, we believe that the above wording is problematic as it does not stipulate how the equivalence mentioned is to be assessed. Furthermore, technical regulations often contain provisions on conformity assessment procedures. A well-working framework has been established in Europe in this context by Regulation 765/2008 and Decision 768/2008. In the capital goods industry, the self-declaration is legally accepted as conformity assessment procedure in 80 percent of the cases. Unlike in Europe, the principle of third-party certification has gained acceptance in Canada. The manufacturer's self-declaration is not accepted. The SCC (Standards Council of Canada) coordinates the accreditation of conformity assessment bodies and testing laboratories in accordance with the relevant international ISO/IEC standards (including ISO/IEC 17025, 17020, and 17065). These bodies are then authorized to carry out third-party certifications and testing primarily of electrical components, though there is no actual national test mark. Instead, every NRTL (Nationally Recognized Testing Laboratory) awards its own test mark. The test marks serve as proof that the national safety standards are complied with. Article 6: Transparency Paragraph 1. Each Party shall ensure that transparency procedures regarding the development of technical regulations and conformity assessment procedures allow interested persons to participate at an early appropriate stage when amendments can still be introduced and comments taken into account, except where urgent problems of safety, health, environmental protection or national security arise or threaten to arise. Where a consultation process regarding the development of technical regulations and or conformity assessment procedures is open to the public, each Party shall permit persons of the other Party to participate on terms no less favorable than those accorded to its own persons. The VDMA advocates a transparent procedure with respect to drawing up of technical regulations and standards, but does not consider the above-mentioned exceptions regarding safety, health and environment to be helpful to achieve the desired results. Especially in the areas of product safety, health and environmental protection, potential regulations affect a large number of stakeholders in different ways. It is a step in the wrong direction to stop the general idea of transparency and the involvement of interested persons in this context. Paragraph 2. The Parties shall promote closer cooperation between the standardization bodies located within their respective territories with a view to facilitating, inter alia, the - 3 -

4 exchange of information about their respective activities, as well as the harmonization of standards based on mutual interest and reciprocity, according to modalities to be agreed by the standardization bodies concerned. A closer cooperation of standardization bodies is helpful in light of supply chains becoming more and more international. For quite some time, the VDMA has demanded that efforts should be made to create a coherent worldwide body of standards on the basis of the one standard, one test, accepted everywhere principle. What remains unclear in the present text, however, is whether the definition of standards refers exclusively to consensus-based standards or whether it even includes consortium standards. According to the VDMA's point of view, it makes sense to only harmonize standards that are consensus-based (ISO, IEC). A rival body of standards deteriorates the competitive conditions of the capital goods industry. Chapter 8 Customs and trade facilitation Article X-1: Objectives and Principles The Parties acknowledge the importance of customs and trade facilitation matters in the evolving global trading environment. The Parties shall to the extent possible cooperate and exchange information, including information on best practices, for the purpose of promoting the application of and compliance with the trade facilitation measures agreed upon under this Agreement. The Parties agree that measures to facilitate trade shall not hinder mechanisms to protect persons through effective enforcement of and compliance with national requirements. The Parties agree that import, export and transit requirements and procedures shall be no more administratively burdensome or trade restrictive than necessary to achieve legitimate objectives. The Parties agree that international trade and customs instruments and standards shall be the basis for import, export and transit requirements and procedures, where such instruments and standards exist, except where they would be an inappropriate or ineffective means for the fulfillment of the legitimate objectives pursued. The terms define matters of course of customs and trade facilitation, such as the transparency of provisions, simplified procedures, the application of international agreements (customs value, harmonized system) that can be found in any free trade agreement. Chapter 10 Investment Section 3: Non-Discriminatory Treatment Article X.6: National Treatment Paragraph 1. Each Party shall accord to investors of the other Party and to covered investments, treatment no less favorable than the treatment it accords, in like situations to its own investors and to their investments with respect to the establishment, acquisition, expansion, conduct, operation, management, maintenance, use, enjoyment and sale or disposal of their investments in its territory. Paragraph 2. The treatment accorded by a Party under paragraph 1 means, with respect to a government in Canada other than at the federal level, or, with respect to a government of or in a European Member State, treatment no less favorable than the most favorable treatment accorded, in like situations, by that government to investors of that Party in its territory and to investments of such investors

5 The VDMA has always called for an investment chapter in the CETA agreement. One reason for this is that, since 2009, the EU has exclusive competence on foreign direct investment, another one is that it is of strategic importance to also cover the topic of investment protection in trade agreements of the 21st century. The VDMA explicitly welcomes the inclusion of the non-discrimination requirement in the investment chapter, as it puts the domestic investor on an equal footing with the foreign investor in terms of the Agreement. Section 6: Investor-State Dispute Settlement Article X.17: Scope of a Claim to Arbitration Without prejudice to the rights and obligations of the Parties under Chapter [XY](Dispute Settlement), an investor of a Party may submit to arbitration under this Section a claim that the respondent has breached an obligation under: Section 3 (Non-Discriminatory Treatment) of this Chapter, with respect to the expansion, conduct, operation, management, maintenance, use, enjoyment and sale or disposal of its covered investment; or Section 4 (Investment Protection) of this Chapter; and where the investor claims to have suffered loss or damage as a result of the alleged breach. Claims under subparagraph 1(a) with respect to the expansion of a covered investment may be submitted only to the extent the measure relates to the existing business operations of a covered investment and the investor has, as a result, incurred loss or damage with respect to the covered investment. For greater certainty, an investor may not submit a claim to arbitration under this Section where the investment has been made through fraudulent misrepresentation, concealment, corruption, or conduct amounting to an abuse of process. This Section shall apply to the restructuring of debt issued by a Party in accordance with Annex X (Public Debt). A tribunal constituted under this Section may not decide claims that fall outside of the scope of this Article. The VDMA welcomes the inclusion of the Investor-State Dispute Settlement ( ISDS ) in the CETA agreement, as ISDS is an established and proven method when it comes to enforcing claims that arise from the trade agreement concerning investment protection. In particular, the VDMA welcomes the first noticeable steps of reforming the procedure. These are apparent primarily in Article X.33 Transparency of Proceedings according to which hearings within the arbitration proceedings shall be open to the public. This increases the transparency in the overall proceedings and, consequently, also the credibility of the ISDS mechanism. In addition, the VDMA also welcomes essential points mentioned in Article X.36: Final Award, according to which claims to punitive damages are excluded and the Loser Pays Principle is laid down. Based on this principle, the unsuccessful disputing party shall bear the costs of arbitration. This will make an important contribution to reducing the number of improperly motivated claims

6 Chapter 12 Temporary Entry Article 4: Contact Points 1. The Parties hereby establish Contact Points: (a) in the case of Canada: Director Temporary Resident Policy Immigration Branch Citizenship and Immigration Canada (b) in the case of the European Commission: Director Services and Investment DG Trade European Commission (c) in the case of the EU Member States: contact points list in Appendix A or their respective successors. It is incomprehensible to the VDMA why no federal ministry was specified as the contact point in the case of Germany as well. CETA Advisor, an institution which is not described in any more detail, and the Canadian German Chamber of Industry and Commerce Inc. are listed for Germany, while ministries tended to be specified as contact points for all other EU member states (see Appendix A). Article 7: Key Personnel Each Party shall allow the temporary entry and stay of key personnel of the other Party subject to the reservations and exceptions listed in Appendix B. Paragraph 3. Each Party shall allow the temporary entry of business visitors for investment purposes without requiring a work permit or other prior approval procedures of similar intent. Paragraph 4. Each Party shall allow the employment in its territory of intra-corporate transferees and investors of the other Party. Article 7.3. stipulates that business visitors for investment purposes are not required to have a work permit or Labor Market Opinion. The same is not planned for investors and intracorporate transferees, so that it can be concluded that the requirements mentioned do not cease to apply (see Art. 7.4.). According to currently applicable Canadian law, a work permit is required in the case of an intra-corporate transfer, but no Labor Market Opinion. This would mean a change for the worse. Paragraph 5. The permissible length of stay of key personnel shall be as follows: a) Intra-corporate Transferees (specialists and senior personnel) the lesser of 3 years or the length of the contract, with a possible extension of up to 18 months at the discretion of the Party20; b) Intra-corporate Transferees (graduate trainees) the lesser of 1 year or the length of the contract; c) Investors 1 year, with possible extensions at the discretion of the Party; - 6 -

7 d) Business Visitors for investment Purposes 90 days within any six month period. Article 7.5.d) stipulates that business visitors for investment purposes are allowed to enter the country for a duration of 90 days within any six-month period; however, it also refers to the validity of bilateral visa waiver agreements between Canada and individual EU member states. It remains to be examined whether German citizens will continue to be allowed to enter Canada for the period of six months and the 90-day rule therefore will not be applied. Article 8: Contractual Services Suppliers and Independent Professionals Paragraph 1. In accordance with Annex I, each Party shall allow the temporary entry and stay of contractual services suppliers of the other Party, subject to the following conditions: Services based on a maintenance and installation contract can now be provided as contractual services irrespective of the existence of a purchase contract. This would resolve the problem that arises from the fact that maintenance and after-sales services in practice often are not included in the sales contact. As a result, a work permit (and a visa) would no longer be required for maintenance deployments in Canada. However, Chapter 12 does not apply if the contract is longer than twelve months (see below). Paragraph 1. In accordance with Annex I, each Party shall allow the temporary entry and stay of contractual services suppliers of the other Party, subject to the following conditions: (a) The natural persons must be engaged in the supply of a service on a temporary basis as employees of an enterprise, which has obtained a service contract for a period not exceeding twelve months. If the service contract is longer than 12 months, the commitments in this chapter shall only apply for the initial 12 months of the contract. The provision stipulates that contract term must not exceed twelve months. If a longer contract period has been agreed on, Chapter 12 shall only be applied for the first twelve months of the contract. This means that the facilitations resulting from Chapter 12 would thus be inapplicable, for example, for maintenance contracts with a longer term. It is to be accepted, however, that these terms will exceed twelve months in practice. Article 9: Short-Term Business Visitors In accordance with Appendix B, each Party shall allow the temporary entry and stay of shortterm business visitors of the other Party, with a view to carrying out the activities listed in Appendix D The wording in Appendix D (h) suggests that installers and technicians are now, in fact, allowed to perform services as part of a contractually agreed warranty or service contract in connection with a contract for sale or lease (see wording performing services ). This would eliminate the current ambiguity in Canadian entry law as to the degree to which installers and technicians can install and maintain the machines and plants themselves. The following problems occurring in practice have not been solved: If the German machine is sold by the Canadian subsidiary in Canada, then the German technician from the parent company usually cannot carry out any installation or maintenance work, because the German parent company is not a party to the purchase contract, but a third party (unless it is agreed in the purchase contract between the Canadian parties that services can be provided by a third party). This is often not noted in practice. As a result, a work permit (and a visa) are then required for the deployment of an installer to Canada

8 The same applies to the provision of services as a German sub-supplier in the relation between a foreign main supplier and the Canadian customer. In practice, cases with these constellations frequently cannot be solved through the activity as a contractual services supplier. Paragraph 3. The maximum length of stay of short term business visitors shall be 90 days in any six-month period. The provision stipulates that short-term business visitors are allowed to enter the country for a duration of 90 days within any six-month period; however, it also refers to the validity of bilateral visa waiver agreements between Canada and individual EU member states. It remains to be examined whether German citizens will continue to be allowed to enter Canada for the period of six months and the 90-day rule therefore will not be applied. Chapter 21 Government Procurement Article IV: General Principles Non-Discrimination Paragraph 1. With respect to any measure regarding covered procurement, each Party, including its procuring entities, shall accord immediately and unconditionally to the goods and services of the other Party and to the suppliers of the other Party offering such goods or services, treatment no less favorable than the treatment the Party, including its procuring entities, accords to goods, services and suppliers. For greater certainty, such treatment includes: within Canada, treatment no less favorable than that accorded by a province or territory, including its procuring entities, to goods and services of, and to suppliers located in, that province or territory; and within the European Union, treatment no less favorable than that accorded by a Member State or a sub-central region of a Member State, including its procuring entities, to goods and services of, and suppliers located in, that Member State or sub-central region, as the case may be. The VDMA welcomes the extensive chapter in the area of public procurement. The reason being in particular that it is not only binding for the respective state levels, but also for the Canadian and European regions. This fact is received positively, above all, in light of the extensive non-discrimination provisions. A far-reaching chapter in the area of public procurement is an indispensable element of a trade agreement in the 21st century. Chapter 23 Trade and Sustainable Development Article 3: Co-operation and promotion of trade supporting sustainable development Paragraph 2. The Parties affirm that trade should promote sustainable development. Accordingly, in the context of their respective policy or legislative frameworks and in a manner consistent with their international obligations, each Party shall strive to promote trade and economic flows and practices that contribute to enhancing decent work and environmental protection, including by: a. Encouraging the development and use of voluntary schemes relating to the sustainable production of goods and services, such as eco-labeling and fair trade schemes; - 8 -

9 b. Encouraging voluntary best practices of corporate social responsibility by enterprises, such as those embodied in the OECD Guidelines for Multilateral Enterprises, to strengthen coherence between economic, social and environmental objectives. c. Encouraging the integration of sustainability considerations in private and public consumption decisions; and d. Promoting the development, establishment, maintenance or improvement of environmental performance goals and standards. The engineering industry, too, argues in favor of including sustainability and environmental aspects in the text with an appropriately high degree of relevance. The topic affects the capital goods industry not only as providers of sustainable and environmentally friendly technologies but also as manufacturing companies. The VDMA has intently taken note of the encouraged use of eco-labeling and the like mentioned in the text. The VDMA does not consider eco-labeling to be the right approach when it comes to capital goods and therefore opposes the chosen wording. The environmental relevance of complex goods cannot be represented with the help of labels. It would be helpful to phrase more precisely what the intended outcome is to be. Similarly, this also applies to the mentioning of the OECD Guidelines. These Guidelines are not an appropriate means for projects of the capital goods industry to indicate the environmental or sustainability performance. Chapter 26 Regulatory Cooperation Article X.4: Regulatory Cooperation Activities Paragraph 7. Examining opportunities to minimize unnecessary divergences in regulations through means such as: (a) Conducting concurrent or joint risk assessments and regulatory impact assessments if practicable and mutually beneficial, (b) achieving harmonized, equivalent or compatible solutions, or (c) considering the use of mutual recognition in specific cases. The intention of minimizing unnecessary divergences in regulations expressed in the text finds the VDMA's support. In this context, we are concerned about the wording considering the use of mutual recognition in specific cases. Especially in cases where the contents of regulations contain either not the same objectives and/or different means or requirement profiles, mutual recognition without prior harmonization is not the right method from the VDMA's point of view. Paragraph 18. Identifying the appropriate approaches to reducing any adverse effects of existing regulatory differences on bilateral trade and investment in sectors identified by a Party, including, when appropriate, through greater convergence, mutual recognition, minimizing the use of trade distorting regulatory instruments, and use of international standards including standards and guides for conformity assessment. Being a very export-oriented sector, the engineering industry supports the target course of a stronger convergence of regulations. While the above-mentioned tools in general are surely suitable for helping to achieve this goal, mutual recognition without prior harmonization is, from the VDMA's perspective, not the right way. Moreover, the question arises as to what has been defined as standard within the framework of the Agreement. The VDMA supports the tool as long as this refers to international, consensus-based standards (ISO, IEC). The - 9 -

10 ISO provisions (here: ISO CASCO) stipulate that, in the standards, specifications must not be made regarding conformity assessment procedures. From our point of view, this internationally sensible provision should not be deviated from. Furthermore, in Europe, the framework for conformity assessment procedures has been sufficiently defined in the Decision 768/2008. As these regulations set the legal landscape for the New Legislative Framework (NLF), which works well across Europe, and base a number of European directives on the NLF, it does not make sense from our point of view to soften them. In addition to this, guidelines on this issue should also only be developed within the framework of ISO/IEC. Article X.6: Role and Composition of the Regulatory Cooperation Forum Paragraph 3. The RCF shall be co-chaired by a senior representative of the Government of Canada at the level of a Deputy Minister, equivalent or designate and a senior representative of the European Commission at the level of a Director General, equivalent or designate and shall comprise relevant officials of each Party. The Parties may together invite other interested parties to participate in the meetings of the RCF. The mentioned Forum can be a good tool to accompany the implementation of the free trade agreement in practice. The idea of inviting other interested parties as well, which is described in the above text, meets the VDMA's approval. The VDMA proposes to involve in the process the capital goods industry as one of the key industries in Europe and offers its assistance. Chapter 27 Protocol on the Mutual Acceptance of the Results of Conformity Assessment Article 1: Scope and exceptions Paragraph 3. The Parties shall give positive consideration to making this Protocol applicable to additional categories of goods which may become subject to third-party conformity assessment by recognized non-governmental bodies pursuant to technical regulations adopted by either Party after the date of entry into force of this Agreement. To that end, the Party having adopted such a technical regulation shall promptly notify the other Party in writing. If the other Party has expressed an interest in including a new category of goods in Annex 1 but the notifying Party does not agree to it, the notifying Party shall provide to the other Party, upon request, the reasons that justify its refusal to expand the scope of the Protocol. From the capital goods industry's perspective, the explicit mentioning of an expansion of the protocol's scope to include other goods in connection with a third-party assessment (conformity assessment procedure) is confusing. The legal framework provides various conformity assessment procedures of equal rank for the inner-european market. This principle should also be maintained in future. Article 2: Definitions Accreditation: Third-party attestation related to a conformity assessment body conveying formal demonstration of its competence to carry out specific conformity assessment tasks; Instead of third-party attestation, the VDMA here recommends the wording attestation by a national accreditation body in the same way as it is applicable in Regulation (EC) No. 765/2008. The Regulation also demands that a conformity assessment body has to meet the requirements of the harmonized standards in order to be allowed to perform conformity assessments. For this purpose, the Regulation reads: " accreditation shall mean an

11 attestation by a national accreditation body that a conformity assessment body meets the requirements set by harmonized standards and, where applicable, any additional requirements including those set out in relevant sectoral schemes, to carry out a specific conformity assessment activity." Accreditation body: Authoritative body that performs accreditation; The VDMA proposes further clarification of the definition, which is based on the Regulation 765/2008, according to which the " national accreditation body shall mean the sole body in a Member State that performs accreditation with authority derived from the State." Article 3: Recognition of Conformity Assessment Bodies Paragraph 1. Canada shall recognize a conformity assessment body established in the European Union as competent to assess conformity with specific Canadian technical regulations, under conditions no less favorable than those applied for the recognition of conformity assessment bodies established in Canada, provided that either of the following conditions are met: (a) the conformity assessment body is accredited, by an accreditation body recognized by Canada, as competent to assess conformity with those requirements; Paragraph 2. The European Union shall recognize a third-party conformity assessment body established in Canada as competent to assess conformity with specific European Union technical regulations, under conditions no less favorable than those applied for the recognition of third party conformity assessment bodies established in the European Union, provided that either of the following conditions are met: (a) (i) the conformity assessment body is accredited, by an accreditation body appointed by one of the Member States of the European Union, as competent to assess conformity with those requirements; With the European accreditation system in accordance with Regulation 765/2008 in connection with ILAC and IAF, a coherent accreditation system has been established not only for conformity assessment bodies but also for laboratories and inspection bodies. ILAC and IAF offer the possibility of a Mutual Recognition Agreement already today. The VDMA does not see a stringent necessity to implement any additional provisions and suggests the use of the international system already in existence for the accreditation organizations as well as for granted accreditations. Article 10: Acceptance of Results of Conformity Assessment by Canadian In-house Bodies Paragraph 1. The European Union shall accept the results of conformity assessment activities performed by accredited in-house bodies established in Canada under conditions no less favorable than those applied to the results of conformity assessment activities performed by accredited in-house bodies established in the territory of one of the Member States of the European Union, provided that either of the following conditions are met: (a) the in-house body is accredited, by an accreditation body that has been appointed by one of the Member States of the European Union, as competent to assess conformity with those requirements; Or, (b) the in-house body is accredited, by an accreditation body that has been recognized pursuant to Article 12 (Recognition of Accreditation Bodies) or Article 15 (Recognition of

12 Accreditation Bodies in the Areas of Telecommunications and Electromagnetic Compatibility), as competent to assess conformity with those requirements. Paragraph 2. Results shall be accepted regardless of the country of origin of the product for which the conformity assessment activities were performed. The VDMA is critical of the restriction of the mutual recognition of conformity assessments to accredited in-house bodies in Canada. For instance, it has not been defined how accredited in-house bodies within the EU are to be treated reciprocally (in accordance with Article R21 of Decision 768/2008/EC). The VDMA suggests allowing the recognition of European inhouse bodies to the same extent to which the recognition of Canadian in-house bodies striven for in Article 10 is implemented. Article 12: Recognition of Accreditation Bodies Paragraph 3. Differences may exist between the Parties standards, technical regulations and conformity assessment procedures. Where such differences exist, the recognizing Party may seek to assure itself that a nominated accreditation body is competent to accredit conformity assessment bodies as competent to assess conformity with relevant technical regulations of the recognizing Party. The recognizing Party may assure itself based on: (a) a cooperation arrangement between the European and Canadian accreditation systems; Or, in the absence of such an arrangement; (b) a cooperation arrangement between the nominated accreditation body and an accreditation body recognized as competent by the recognizing Party. With the European accreditation system in accordance with Regulation 765/2008 in connection with ILAC and IAF, a coherent accreditation system has been established for conformity assessment bodies. ILAC and IAF offer the possibility of a Mutual Recognition Agreement already today. The VDMA does not see a stringent necessity to implement any additional provisions and suggests the use of the existing international system for the accreditation organizations as well as for granted accreditations. Edition:

13 Contact persons within the VDMA Ackermann, Ulrich Managing Director Foreign Trade Denz, Naemi Managing Director Technical and Environmental Affairs Göres, Jessica Department of Foreign Trade, Transatlantic Trade and Investment Partnership (TTIP), Trade Policy Kern, Daniel European Office, Representation of Interests, Trade Policy Noll, Thomas thomas.noll@vdma.org Department of Technical and Environmental Affairs, occupational health and safety, pressure equipment and explosion protection in the area of BRIC and USA Wagner, Friedrich friedrich.wagner@vdma.org Department of Foreign Trade, customs regulations, goods origin/preferences Welcker-Clemens, Gabriele gabriele.welcker-clemens@vdma.org Department of Foreign Trade, NAFTA