One year after the entry into force of the economic and trade agreement between Canada and the European Union, the data analysis, the results and the estimates for 2018 confirm that we have much to gain from this agreement.
After one year of the (provisional) entry into force of CETA, the economic and trade agreement between Canada and the European Union, the results are positive and the risks are avoided. The agreement, which activated a series of measures to facilitate trade, has produced trade growth and realized the advantages that wanted to achieve at the beginning of the negotiations.
In 2017, the European Union was the 3rd largest supplier in Canada, with an 11% share of imports, and Italy the 8th supplier in Canada (worldwide), registering an increase of + 8% compared to the previous year.
DATA AND ESTIMATES FOR 2018
The analysis of the updated data in July 2018 and collected from authoritative sources such as Statistics Canada and ICE-agency, confirmed the positive trend which was already disclosed in the last few months during the first 5 months of execution of the CETA(October 2017 - February 2018), with an increase in Italian exports of + 16.9%. In the first 7 months of the year, with reference to the same period of the previous year, there was an increase in European and Italian exports to Canada, respectively, with regard to European exports to Canada of +12.6% (for an increase of about $ 4 billion CAD), while for Italy it is + 10.4% (with an increase of about $ 365 million CAD).
The data are encouraging also for the imports of European Union and Italy from Canada, with an increase of +23.6% to Europe and +39.2% to Italy.
It should be noted that the percentage data, which is very positive for Canada, is explained by the Canadian disadvantage, in terms of absolute value, which was initially recorded compared to data on European and Italian exports.
The following data will clarify the concept, the total value of Canadian exports to Italy from January to July 2018 is $ 1,892 billion CAD and the total value of Canadian imports from Italy in the same period is $ 3,858 billion CAD. (ISTAT).
Table 2: Canada/Italy trade balance. Reference period Jan-July 2017 and 2018. Data source: Statistics Canada. Table 12-10-0011-01.
Consequently the Italian import from Canada increased, but did not change the trade balance between the two countries that remains favorable to Italy. Furthermore, Italian exports to the North American country have continued to grow: thus, the fear of the invasion of unspecified products, more or less harmful, from Canada, in a year from the entry into force of CETA did not occur.
In relations with Europe, Canada confirms itself to be a serial importer. One only need think that Canada's trade balance is always in sharp deficit compared to its major European partners: considering that it is much more productive in imports than in exports.
Basically, to date, the data show that the agreement is working in its entirety and the first year of CETA ends in a positive way, also taking into account other elements, often the subject of debate:
- There has been no invasion of Canadian junk food. Talking about of junk food, which has been widely discussed and whose entry into Europe has been given as immediate, direct and unstoppable consequence, of the entry into force of CETA and its possible ratification - it is noted that this invasion did not take place. However, the agreement itself shows that the European Union continues to process the products that enter its market through preventive measures and that no agreement is able tomodify or eliminate. (Chapter 5 of CETA). In particular, it should be reiterated that no international agreement can, by virtue of Article 119 of the TFEU (Treaty on the Functioning of the European Union), modify or repeal the "precautionary principle" placed as the essential cornerstone of the EU. However, in the declarations on behalf of the EU, attached to the EU Council procedure for authorization to sign the CETA, point 7 states:
“The Commission confirms that CETA preserves the ability of the European Union and its Member States to apply their fundamental principles governing regulatory activities. For the European Union, those principles include those established in the Treaty of the European Union and the Treaty on the Functioning of the European Union and include, in particular, theprecautionary principle as mentioned in Article 191 and reflected in Articles 168(1), 169(1) and (2) of the Treaty on the Functioning of the European Union”.
Nor does CETA include any obligation for the EU to recognize the "principle of equivalence", as set out in Article 5.6.1 of the CETA, which states:
“The importing Party shall accept the equivalence of the SPS measures taken by the exporting Party if the latter demonstrates objectively to the importing Party that its measures reach the appropriate level of health and phytosanitary protection of the importing Party. "
Therefore, products treated with additives currently banned by the EU cannot be imported into the EU.
- There has been no invasion of Canadian wheat. On the basis of the data provided by an ICE-Agency elaboration, exports to Italy of Canadian wheat, considered by some toxics, with the entry into force of CETA have decreased. Statistics Canada, confirms the collapse of Italian imports of durum wheat (-99%) and soft wheat (-47%), a drop that had already begun for 3 years.
CETA, like all free trade agreements, does not alter the rules of the markets but has a positive impact on the trend of supply and demand in terms of quantity and quality. It can therefore only simplify procedures and make the exchange of goods quicker and easier, in full and absolute compliance with the rules governing the entry of products.
In a subsequent analysis to be published by the Centro Studi Italia Canada, a detailed information will be provided on the items of the above data, including in particular the increase recorded by the manufacturing industry, which, we anticipate, represents, 25% of total exports from Italy to Canada.
Trade is the important topic of the agreement between Canada and the European Union, but certainly not the only one. Among the key points of the agreement, there is public procurement: In fact, the mutual opening of the infrastructure market should not be forgotten. For European (and Italian) companies this means being able to participate in tenders for the supply of services and goods, issued at all levels (federal, provincial and municipal). Considering that Canada is a country in constant growth, this means being able to access to a rich and safe market, characterized by a high level of legal certainty.
The desired ratification of the Agreement will therefore be able to bring benefits.
WHAT HAPPEN IN CASE OF A NON-RATIFICATION?
Omitting for a moment the analysis of the complex scenario that would occur (with all the uncertainties on the procedures to be adopted, their existence and the wounds inside the Union), the relations between Italy and Canada, have always been excellent, could deteriorate irremediable, negatively involving also those sectors in which the relationships are consolidated and advantageous.
STRATEGIC PARTNERSHIP AGREEMENT (SPA)
Italy has given a lot to Canada, Canada did the same with Italy.
What we still cannot understand is how this friendship should be interrupted or nullified by an inexplicable behavior, which takes us away from a historical relationship that has brought growth and can bring further development in the sectors of economy and commerce, but also in social, environmental, cultural, political, and strategic in general. It is in fact thanks to the strategic partnership agreement, premise and completion of CETA, that these objectives of epochal relevance can be achieved for the collective well-being and for the construction of a balance point between the great of the planet, guarantee of peace and development.
But nobody talks about the Strategic Partnership Agreement (SPA).
*Equity Partner od Nctm Law Firm,
Vice President ICCCW,
Director of Centro Studi Italia-Canada
*Research coordination and Public Relations