A FOREIGN INVESTOR S CETA GUIDE TO

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1 A FOREIGN INVESTOR S GUIDE TO CETA

2 Disclaimer: This guide is intended to provide a general overview of CETA obligations. For more detailed information, investors should rely on the text of the CETA and seek independent legal advice.

3 The Canada-European Union Comprehensive Trade Agreement (CETA) is Canada s most ambitious international trade agreement since NAFTA. The European Union (EU) is already Ontario s second largest trading partner, accounting for 9% of Ontario exports in With preferential access afforded through CETA, Ontario is primed to increase trade with the world s second largest economy.

4 CANADA GAINS PREFERENTIAL ACCESS TO WORLD'S 2ND LARGEST ECONOMY Here are ways investors can benefit from Canada s most recent trade agreement. Investors can take advantage of CETA s duty free access CETA will remove 98% of EU duties on Canadian goods after September 21, An investor who sets up a manufacturing facility in Ontario can export that product to the EU at reduced or zero EU duties applicable to that product 1. Sector EU Tariff lines Pre-CETA Post-CETA* Aerospace Aircraft launching gear and parts 2.7% 0% Air combat simulators 1.7% 0% EU's annual GDP is nearly $17 trillion EU's 28 Member states have 500 million consumers Medical Products Cleantech ICT Automotive Thermometers and pyrometers 3.2% 0% X-ray generators and tubes 2.1% 0% Electronic control equipment 2.1% 0% Wind turbines 3.7% 0% TV and Digital Cameras Up to 14% 0% Optical Fibre 2.9% 0% Auto parts Up to 4.5% 0% Chassis Up to 19% 0% EU's government procurement market is worth an estimated S3.3 trillion annually Food Processing / Confectionery Goods Transporting Vehicles Up to 22% 0% Maple Sugar and Syrup 8% 0% Processed Cereals 54.30/100 kg 0% *Tariffs will be eliminated as soon as the agreement takes effect, except for tariff on Goods Transporting Vehicles, which will be covered under the 3 year phase-out schedule for tariff elimination. This list is not exhaustive of all EU duties. 1 Subject to the CETA Rules of Origin requirements that apply to that product. Products must be wholly obtained from or sufficiently produced in Canada. Assembly, packaging and other minor production activities are insufficient to take advantage of reduced or zero EU duties available to goods originating in Canada.

5 CETA makes Canada-EU business travel easier Under Chapter 10 of CETA, companies in Canada and the EU can receive special treatment for bringing key skilled employees into each other s labour markets on a temporary basis. Canadian employees can enter into EU labour markets on a temporary basis without fulfilling a labour market test or an economic needs test. The same special treatment will be available for European employees entering the Canadian labour market on a temporary basis. To qualify, employees must be Canadian or EU citizens and fall under one of the temporary immigration categories of business visitors (managers or specialists responsible for setting up an enterprise), investors (supervisors or executives who have or will commit a substantial amount of capital and be responsible for setting and administering the operations), or professionals or intracompany transferees. EU companies establishing a base in Ontario can bring in necessary skilled employees for their investment planning and operations. Likewise, Canadian companies opening a branch office/ operation in an EU member country to boost their EU exports or supplying professional services under contract to EU markets can also benefit from this special treatment.

6 CETA gives investors access to government tenders in the EU Government procurement contracts offer companies the opportunity to increase sales while efficiently marketing goods and services to reliable and transparent public organizations. On the day CETA comes into effect, business located in Ontario will have direct access to bid on EU public procurements. EU governments and public organizations include schools, hospitals and universities. Investors can tap into $448 billion in EU government and public tenders Tenders Electronic Daily (TED) is the official portal to ALL government tenders in the EU TED publishes 460,000 tenders/year (valued at $488 billion). Businesses can access tender notices for Free on TED.

7 Examples of government tenders posted on TED Sector Country Tender Aerospace Sweden Airplanes for Air Ambulance Automotive France Parts and accessories for vehicles and their engines Information and Communication Technology Poland Computer Control Systems LEVERAGE CETA TO BUILD CANADA-EU SUPPLY CHAINS CETA promotes simpler, more costeffective supply chains between Canada and the EU Cleantech Netherlands Solar photovoltaic modules Life Sciences Norway CT Scanners Source: Tenders Electronic Daily (2017). This is not an exhaustive list of all EU contract notices. CETA makes building Canada-EU supply chains easier Investors that set up their manufacturing base in Ontario can leverage Ontario s proven export expertise and smoother Canada-EU customs and trade paths to reduce their costs, tighten their delivery cycles and create new supply chains between Ontario and the EU. CETA allows companies to maximize their duty free supply to EU buyers by using clearer and simpler paperwork for EU-bound product originating in Canada. Pre-shipping confirmation will ensure supply chains into the EU are quick and cost effective. CETA establishes a framework that can make it easier for Canadian and EU-based businesses to meet testing and certification standards, allowing companies to maximize supply to customers.

8 Do you have questions about how your business can benefit from CETA? The Ontario Investment Office is your one-stop source to business information, tailored investment solutions and valuable connections for investors looking to establish or expand their business in Ontario. CONTACT US DIRECTLY or (North America) All figures are in U.S. dollars unless otherwise noted. Printed in Ontario, Canada on recycled paper. Queen s Printer for Ontario, ENG/09/17