Canadian Embassy and Canada Spain Chamber of Commerce Encounter. Economic Agreement between the EU and Canada

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1 Canadian Embassy and Canada Spain Chamber f Cmmerce Encunter INTRODUCTION Ecnmic Agreement between the EU and Canada 11 March 2009 I shuld like t thank the Chamber f Cmmerce and the Embassy fr the invitatin t take part in this breakfast n the ccasin f the visit by Mr. Ry MacLaren, a great initiative in supprt f the rle that a clser ecnmic and trading relatinship can play in the ecnmic recvery. Because internatinal trade can and shuld play a majr rle as the engine f grwth and develpment thrughut the wrld, s trade plicy, by pening markets, shuld frm an imprtant part f ur respnse. Fr Spain, prsperity has been linked t an ecnmic plicy inspired by pening up trade and investment relatins. Nw it is mre imprtant than ever t keep ur markets pen and wrk s thers can d s t. We think this prvides an imprtant stimulus t cmpete, innvate and grw. Fr this reasn we supprt the initiatin f negtiatins fr an ambitius agreement between the EU and Canada. Because the tw parties believe that while multilateral trade rules shuld gvern internatinal trade, we can but als g further thrugh mre ambitius bilateral agreements. The supprt f the private sectr fr these initiatives is fundamental, and I am well aware f the interest shwn by the business sectrs f bth parties, represented by the Canada Eurpe Rundtable fr Business, in having an ambitius ecnmic and trade agreement. This event is ne mre example f that cmmitment. PRESENT EU-CANADA RELATIONS The EU is Canada s 2nd mst imprtant trading partner after the US, while Canada is the EU s 11th trading partner. Investment relatins are even mre intense, since the EU is the secnd mst imprtant investr in Canada and Canada is the EU s furth mst imprtant investment partner: The present relatinship is based n three agreements: the Framewrk Agreement fr Cmmercial and Ecnmic Cperatin f 1976, the Transatlantic Declaratin f 1990 and the Canada-EU Jint Plitical Declaratin and Actin Plan f Questins f trade are discussed at annual Summits, in the Jint Cperatin Cmmittee, which meets twice a year, assisted by a Subcmmittee n Trade and Investment. It is supplemented by ther High level dialgues and Cmmittees: Jint Cmmittee n Wines, Regulatry Cperatin, Mutual Recgnitin, Agriculture, etc and ther bilateral agreements, such as the Agreement n wines r that n the Registratin f passenger details. 1

2 NEED FOR A NEW AGREEMENT Hwever, we d nt have a cmprehensive and ambitius Agreement fr ur ecnmic relatins. Sme attempts at achieving clser relatins between us have encuntered difficulties in specific areas f interest fr ur Eurpean and Spanish cmpanies, precisely because we d nt have that agreement, such as access t Canadian public prcurement, prtectin f EU gegraphical indicatrs in Canada, r reciprcal recgnitin f prfessinal qualificatins. A reflectin f these difficulties is the utcme f the negtiatins n the ambitius Trade and Investment Enhancement Agreement (TIEA), that started in 2004 and ran agrund sme years later. Canada nce again demnstrated its cmmitment t making headway, and this led, in 2007, t the prpsal t negtiate a mre ambitius free trade agreement, and we agreed t carry ut a jint study t identify the areas in which it wuld have greatest impact. The study shwed that the greatest ptential fr imprving trade lay in reducing tariff and nn-tariff barriers and the liberalisatin f the trade in services, and quantified it. 1 In additin, it demnstrated the existence f significant ptential fr encuraging ecnmic relatins in ther areas, frm labur mbility, the envirnment and regulatry cperatin t science and technlgy. TOWARDS A NEW AGREEMENT At the EU-Canada Summit which was held in Quebec in Octber 2008 bth parties agreed t wrk tgether t define the scpe and depth f a new Strnger Ecnmic Partnership Agreement. The EU expressed its desire fr an ambitius and cmprehensive agreement, withut a priri limitatins with regard t the ecnmic sectrs that wuld be included, and incrprating all the chapters f the mst ambitius bilateral ecnmic agreements, with regulatin f public prcurement, gegraphical indicatrs and nntariff barriers, and wrking twards a binding cmmitment t incrprate the Canadian prvinces. It was decided t carry ut a jint scping exercise, which has prduced a reprt taking int accunt the bjectives f achieving a deepened and ambitius agreement and the cnclusins f the study referred t. 1 The eliminatin f barriers wuld prduce revenues f 11,600 millin eurs fr the EU and 8,200 millin eurs fr Canada, leading t increases in the GNP f +0.08% fr the EU and +0.77% fr Canada. Ttal exprts frm the EU t Canada culd increase by 24.3% while Canadian exprts wuld increase by 20.6%. Liberalisatin f trade in services wuld cntribute t a substantial part f the gains (50% f the ttal fr the EU; 45.5% fr Canada). 2

3 Thus the Grup has indicated that we shuld include a large number f areas, since the greatest benefit fr bth parties will cme frm a high level f liberalisatin and the inclusin in the agreement f ther areas f mutual interest, as well as thse strictly relating t tariffs. I wuld mentin certain areas: In gds, althugh the general tariff level is lw, we will bth benefit frm the eliminatin f tariffs. The agreement shuld als include clear prvisins n rules f rigin. It will include subsidies fr the exprt f agricultural prduce and Statewned cmmercial enterprises and cnsider pssible distrtin f cmpetitin. It will be necessary t substantially reduce nn-tariff barriers t trade, with regulatins n this matter. It will be necessary t strengthen the WTO prvisins n Sanitary and phytsanitary measures by establishing a specific mechanism. We shall als have strengthened regulatins n technical barriers t trade in the areas f transparency, internatinal standards, technical regulatin and certificatin, als using a specific mechanism. We als need t advance in facilitating trade, including gals f efficiency, transparency, cperatin and cnsultatin. The liberalisatin f the trade in services shuld frm an imprtant part f any agreement, with extensive cver in terms f number f sectrs, vlume f trade and frms f supply. The prvisins shuld apply t measures pertaining t all levels f gvernment and nn-gvernmental rganisatins. It will als include ways t facilitate reciprcal recgnitin f prfessinal qualificatins. In the field f investment there are als bvius pprtunities fr imprvement. The negtiatins will embrace the fields f pre- and pst-establishment in all sectrs, increasing transparency and ensuring nn-discriminatry treatment f investrs and investments. The bligatins that are agreed shuld be binding n bth central and sub-central levels f gvernment. The agreement will have t imprve access t public prcurement markets in rder t cmpletely cver all sectrs, bth at a central and sub-central level, ensuring the ther party s suppliers a n less favurable treatment than that given t lcal suppliers. Transparency, regulatin, prcedures and practices must be imprved. We must als negtiate regulatins in intellectual prperty, including gegraphical indicatrs, ging beynd multilateral rules in all categries f intellectual prperty rights t imprve their prtectin and applicatin. 3

4 We shall als be able t include issues cncerning sustainable develpment, with prvisins n the envirnment and labur rights, t ensure that they cannt be used as measures t distrt trade r investment. Liberalisatin f envirnmental gds and services culd be part f the cmmitments n market access. This lng list f issues will give yu an idea f hw ambitius this exercise is, f the majr impact we can expect frm it cming int effect, but at the same time the difficulty it als invlves. One f the critical pints that cncerns the Eurpean side is the cmmitment f the gvernments f the Canadian Prvinces t apply the agreements in the areas in which they have brad jurisdictin, given the Canadian institutinal structure. Thus a few weeks ag the Cuncil f the Federatin issued a Declaratin supprting the negtiatins f this new and cmprehensive Ecnmic Agreement with the EU, in which 12 f the 13 prvinces and territries cnfirm their cmmitment t participating cnstructively in the negtiatins and applying the results f the agreement within their areas f jurisdictin. Hence it is the Canadian federal gvernment that has the cmpetency and respnsibility fr pursuing the negtiatins and incrprating the result in internatinal treaties, while the prvinces and territries are respnsible fr their applicatin within their area f jurisdictin, and drawing up the legislatin necessary t d s. The EU has cnfidence in the Prvinces cmmitment t implementing the results, since if they failed t d s the scpe and value f the agreement wuld be very limited. BILATERAL IMPLICATIONS An EU Canada Agreement will have a favurable impact n strengthening ecnmic relatins between Spain and Canada, which have been intensifying in recent years nt nly in terms f exprts, but als in mre cmplex peratins in the services sectr and setting up enterprises. The agreement will be a stimulus fr increasing ur bilateral ecnmic and trade flws, which are still mdest if we cnsider that ur exprts t Canada represent sme 850 millin eurs per annum and ur imprts 1,400 millin eurs. Our investment stck in Canada in 2006 was millin eurs, and increasing, while the Canadian investment stck in Spain that year was 7 time greater, at 3,614 millin eurs. CONCLUSION T cnclude, I shuld like t emphasise that the ecnmic plicy that is leading t recvery shuld include pening up markets in rder t increase trade and investment, the creatin f new business pprtunities fr cmpanies n bth sides, and an ambitins ecnmic partnership agreement between the EU and Canada fits perfectly int this strategy. 4

5 We hpe and trust, then, that it will be pssible t frmally launch the negtiatins at the frthcming EU-Canada Summit in May. Thank yu nce again fr the invitatin. 5

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