EU – Canada Comprehensive Economic and Trade Agreement (CETA) - 4th Meeting of the Joint Committee
February 9, 2024 (Brussels, Belgium)
Joint report
The fourth meeting of the Joint Committee of the European Union (EU) - Canada Comprehensive Economic and Trade Agreement (CETA) was held in Brussels in a hybrid format on February 9, 2024. The meeting was co-chaired by the EU’s Executive Vice-President and European Commissioner for Trade, the Honourable Valdis Dombrovskis and Canada’s Minister of Export Promotion, International Trade and Economic Development the Honourable Mary Ng. Also in attendance were representatives of the EU’s Member States, Canada’s Provinces and Territories, as well as EU and Canadian officials.
Introductory points
Seven years into provisional application of CETA, the Co-Chairs highlighted the continuing and increasing mutual benefits resulting from the Agreement and took stock of the ever-closer cooperation under CETA and its committees and dialogues. The Co-Chairs emphasised that CETA is the foundation for the strong EU-Canada economic, trade and investment relationship, and contributes significantly to bilateral cooperation, innovation, and competitiveness on the global stage. They noted that this partnership, based on shared values and a mutual commitment to rules-based and inclusive trade has contributed to withstand wider challenges to our economies in a period of global geopolitical and geoeconomic uncertainty.
The Co-Chairs underlined the success of CETA, with bilateral trade in goods having grown by more than 50 per cent since the provisional application of CETA in September 2017. The latest 2023 trade figures confirm this positive trend. CETA has been effective in eliminating trade tariffs and barriers, fostering the free flow of goods, services, and investment between the EU and Canada. The Co-Chairs noted how CETA has benefited small- and medium-sized enterprises (SMEs). Executive Vice-President Dombrovskis underlined that recent figures indicate that comparatively even more new SMEs than large companies have started exporting to Canada from the EU under CETA. Minister Ng highlighted the extent to which women-owned, Indigenous Peoples and LGBTQ+ businesses participate in trade under CETA.
Both sides agreed that CETA is playing an important role for the resilience of supply chains through diversification. They pointed to the visible effect Russia’s war of aggression against Ukraine is having, notably underlining the role the EU and Canada are playing for each other in ensuring secure supply and diversification including with respect to raw materials, fertilisers and products subject to sanctions against Russia such as machinery.
The Co-Chairs focused on the importance of strengthening bilateral, future oriented cooperation on trade and investment under CETA and underlined the importance and contribution of CETA and its structures to other EU-Canada cooperation tracks, including those announced during the 2023 EU-Canada Summit notably the Digital Partnership, Green Alliance, the Economic Security Dialogue and Canada’s association to Pillar 2 of Horizon Europe as well as ongoing cooperation under the Strategic Partnership on Raw Materials.
The EU and Canada recalled that ratification of CETA was still pending in ten EU Member States and expressed their desire for swift completion of these national processes to ensure a full entry into force of CETA as soon as possible.
Joint updates and endorsements by the Joint Committee
Agreement on an “Interpretation on Investment”
The EU and Canada announced agreement on an Interpretation of the CETA Joint Committee for Article 8.1, Annex 8-A, Article 8.9 and Article 8.39 of CETA that clarifies elements of the investment provisions under CETA, notably “fair and equitable treatment”, “indirect expropriation” and “investment and climate change”. The Interpretation further clarifies that the Parties can regulate in the framework of climate, energy, and health policies to achieve legitimate public objectives. The EU and Canada confirmed that the text of the Interpretation has been approved in substance and committed to the timely final adoption through the Joint Committee by written procedure in accordance with Article 26.1.5 (e) of CETA once the internal procedures have been finalised. The EU informed Canada that it had completed its internal procedures necessary for adoption by the Joint Committee Pending adoption by the Joint Committee, the EU and Canada agreed to publish the draft in their official languages on their respective websites for transparency and information purposes.
Update on the progress towards the adoption of a Mutual Recognition Agreement on professional qualifications of architects
The Co-chairs welcomed progress towards the adoption of a Mutual Recognition Agreement (MRA) on professional qualifications for architects, the negotiations for which were concluded in 2022. The EU noted that it has completed all necessary internal steps to allow for the adoption of the MRA and the Co-Chairs called on the CETA Committee on the Mutual Recognition of Professional Qualifications to work expeditiously towards the formal adoption of the Agreement. The MRA, once in force, will be the first of its kind under CETA and will further demonstrate that CETA is delivering tangible benefits for professionals and small businesses.
Update on the progress towards the adoption of supplemental rules on expedited procedures for the resolution of investment disputes, in particular for natural persons and small- and medium-sized enterprises (SMEs) under CETA
The EU and Canada announced the conclusion of negotiations at the technical level on the text establishing rules to facilitate access of natural persons and SMEs to investment dispute resolution under CETA. Both sides underlined that ultimately, these rules will enhance the ability of SMEs and natural persons to participate and benefit from the opportunities created by CETA. The Co-Chairs declared their shared commitment to work expeditiously towards finalisation of all steps necessary to enable a timely adoption of these rules by the CETA Joint Committee. Pending adoption by the Joint Committee, the EU and Canada agreed to publish the draft decision in their official languages on their respective websites for transparency and information purposes as soon as possible.
Update on the progress towards the inclusion of active pharmaceutical ingredients as medicinal products or drugs listed in paragraph 2 of the Annex 1 to the Protocol on the mutual recognition of the compliance and enforcement programme regarding good manufacturing practices for pharmaceutical products
The EU and Canada welcomed progress towards the extension of the operational scope of the CETA protocol on the mutual recognition of the compliance and enforcement programme regarding good manufacturing practices for pharmaceutical products (the GMP Protocol). The Parties endorsed the initiation of the process for a Joint Committee decision that will extend the operational scope of the GMP Protocol to active pharmaceutical ingredients. This would allow the mutual recognition of inspections and acceptance of official documents for active pharmaceutical ingredients, and thus reduce costs resulting from duplicative inspections. This change is expected to particularly benefit micro, small and medium-sized enterprise, and to contribute to greater pharmaceutical supply chain resilience.
Reporting from the Specialised Committees
Joint update on the implementation of the Trade and Sustainable Development Chapters and review of the implementation of the Joint Committee Recommendation on Trade and Gender, Climate Action and SMEs and the Civil Society Dialogue
The EU and Canada underlined the centrality of the trade and sustainable development (TSD) chapter of CETA and their shared commitment to its successful implementation. At the fifth meeting of the CETA Trade and Sustainable Development Committee on 27 April 2023, both sides identified new joint activities and areas of engagement.
The EU highlighted several key actions under the TSD work plan for 2023-2024, including strengthening opportunities to apply a gender lens to all CETA committees and continuing to ensure women entrepreneurs can benefit from CETA opportunities, as well as considering organising an EU-Canada experts exchange to share information and best practices on environmental priorities, such as the footprint of products, sustainable products, and eco-design. The EU also flagged the importance of exchanging experience and cooperating in promoting high labour standards in third countries and strengthening efforts vis-à-vis shared FTA partners. In addition, the EU informed Canada that work is ongoing to explore implementing elements of the EU’s own TSD review that would not require a reopening of the Agreement. Those elements are notably on occupational safety and health and on enhancing interaction with domestic advisory groups.
The EU highlighted successes achieved in the common work on the implementation of the Joint Committee Recommendation on SMEs, with a growing number of SMEs using opportunities under CETA and gaining market access with tools such as the EU’s Access2Markets portal also covering services, and Canada’s tariffs’ finder. The EU also referred to a dedicated Foreign Policy Instrument (FPI) project called “Low Carbon and Circular Economy Business Action in Canada” that supports EU SMEs offering clean technologies in accessing the Canadian market.
Canada acknowledged the work done on TSD and the successful hybrid Civil Society Forum that took place in Ottawa in April 2023. Canada underlined the importance of ongoing work to strengthen the enforceability of the trade and environment and the trade and labour provisions of the Agreement. Both sides agreed to hold technical discussions on the matter in advance of the next TSD Committee meeting and to explore options that would not require a reopening of the Agreement.
Joint update on the Government Procurement Committee
Canada highlighted the constructive and cooperative engagement by both Parties under the CETA Chapter on Government Procurement. Canada also provided an update on the implementation of the single point of access “CanadaBuys”, that has been in place since 2022, which is a one-stop-shop tender platform that facilitates access for companies to information on all procurement offers and tender notices covered by CETA, including at the provincial and territorial level.
The EU welcomed the good cooperation in the area of procurement and particularly the creation of “CanadaBuys”, emphasizing that CETA has led to better access to both sides’ procurement markets and underlined that the EU has had its Tenders Electronic Daily (TED) website in place for some time. To demonstrate the benefits of tools such as the EU’s TED, Access2Procurement and Canada’s “CanadaBuys”, the EU underlined the importance of gathering data. Thus, the EU requested, and Canada agreed to continue the discussion on the collection and exchange of data on CETA-covered contracts that have been awarded to Canadian and European suppliers, including at the sub-federal level.
Joint update on the Regulatory Cooperation Forum
Both Parties highlighted the crucial role of regulatory cooperation to facilitate bilateral trade and investment and as a means to share information in important areas such as standardisation. Regulatory cooperation is an excellent illustration of the positive relationship between officials and regulators of the EU and Canada.
The EU noted the importance of using the Regulatory Cooperation Forum to deliver key actions and to complement cooperation mechanisms under the recently agreed EU-Canada Digital Partnership and the EU-Canada Green Alliance. Canada echoed the importance of strengthening regulatory cooperation efforts.
The EU’s perspectives on reporting from the specialised committees:
Committee on Trade in Goods: Canadian Select Luxury Items Tax
Referring to the concerns raised previously including most recently at the 2022 Joint Committee meeting and the Committee on Trade in Goods of May 2023, the EU elaborated further on its concerns over Canada’s Selected Luxury Item Tax Act. The EU informed Canada that it had commissioned an independent study to assess the impact of the tax on EU-originating cars, and, in comparison, it showed a disproportionately higher impact on EU-originating cars as opposed to cars originating in Canada or elsewhere. The EU had shared the results of the study with Canada. Against this backdrop, the EU called on Canada to ensure a level playing field, especially as regards electric vehicles and to review this tax to ensure compliance with national treatment and most-favoured nation commitments under CETA.
Canada confirmed receipt of the study and informed the EU that it is currently being studied by the Department of Finance Canada. Canada reiterated that the Selected Luxury Item Tax Act is non-discriminatory, as it applies equally to domestic and imported luxury vehicles.
Geographical Indications Committee: CETA provisions on protection of geographical indications
The EU raised continuing concerns over the protection of geographical indications and Canada’s enforcement system, reiterating concerns raised at the 3rd Joint Committee and the last Committee on Geographical Indications (GIs). While the EU welcomed Canada’s recent initiatives to raise awareness among Canadian stakeholders of their CETA GI obligations, the EU called on Canada to cooperate with a view to making it easier for EU right holders to assert their rights in Canada. The EU called for more transparency and evidence of the effective use of the system in place in Canada.
Canada underlined that it saw the implementation of GI protection under CETA as a success story. Canada recalled that both sides had come a long way, and the progress achieved thanks to education and awareness-raising activities, with stakeholders on both sides becoming more comfortable with GI protection. In this regard, Canada noted that there are cases of EU stakeholders using the Canadian GI protection system to defend their rights successfully. Canada signalled its willingness to continue working with the EU to encourage even more EU right holders to understand and use the Canadian system. Canada acknowledged the EU’s request to provide more information on the use of Canada’s legal system to protect GIs.
Agriculture Committee: Management of the CETA Tariff Rate Quota (TRQ) notably in relation to cheese
The EU expressed concerns about the management of the CETA cheese Tariff Rate Quota (TRQ) and its disappointment that Canada’s comprehensive review of the system was not yet finalised. The EU reiterated its fundamental concern regarding Canada’s pooling system in the administration of the cheese TRQs. The EU is of the view that Canada’s TRQ administration fails to meet the CETA commitments to provide a mechanism which is “as conducive to trade as possible” and which should allocate TRQ to those persons “most likely to use it”, given the reportedly high level of transfers (trading of import quota) and alleged transfer costs which could be reflected in the final price of the EU cheeses.
Canada expressed the view that its TRQ administration is compliant with CETA and that cheese TRQs are a success for the EU, with EU exporters availing of the expansion of quota and access to the Canadian market noting a 300% increase in exports since 2018 and over 90% TRQ use year-on-year.
Canada stated its appreciation for the EU’s continued interest in the comprehensive review of its dairy TRQ management system, particularly in relation to the cheese TRQs. Canada said it intended to finalise the review as soon as possible and will share updates in due course.
Wine and Spirits Committee: EU access to the Canadian market
The EU underlined the long-standing concerns it has had on discriminatory measures regarding wine and spirits but welcomed some progress made at the level of two Canadian provinces in the past year. The EU welcomed the repeal of the federal excise duty exemption for Canadian wines and the elimination of the tax difference by Ontario. The EU also welcomed the recent draft decree published in the Province of Québec that addresses EU concerns regarding the “méthode champenois”.
The EU called on Canada to maintain the good momentum, continue the work with stakeholders on both sides including on new issues such as discriminatory measures introduced by Alberta on spirits.
Canada noted that the EU’s share in the Canadian market continues to increase. In 2023, the EU’s wine exports to Canada reached $1.67 billion. Nevertheless, Canada expressed willingness to continue to work with the EU to address issues raised by EU stakeholders.
Both sides welcomed that the process for the first update of the 2003 EU-Canada Wine and Spirits Agreement is close to being finalised. Once completed, this will allow adding several new Canadian and EU geographic indications to the agreement.
Sanitary and Phytosanitary Measures (SPS) Committee: harmonisation of EU Certificates for exports from the EU to Canada
The EU urged Canada to prioritise completing the work on reaching an agreement for a harmonised certificate for EU exports of processed meat products by June 2024.
Additionally, the EU expressed the need to promptly initiate discussions on its next priority commodities, namely harmonised health certificates for sheep and goat meat and animal casings, with the aim of finalising these agreements soon thereafter.
Acknowledging the complexity of the matter, Canada emphasized that SPS issues are best addressed by experts and reiterated its commitment to continuing discussions with the aim of reaching an agreement on a harmonised certificate for EU exports of processed meat products by June 2024 as defined during the 2023 CETA SPS Joint Management Committee.
Canada’s perspectives on reporting from the Specialised Committees
Sanitary and Phytosanitary Measures (SPS) Committee: Canadian simplified certificates for export to the EU
Canada underlined that simplified health certificates were a long-standing request on their side. Canada urged for progress on the EU side to finalise internal procedures for the simplification of the public health attestations in certificates for imports from Canada of beef, pork, and poultry. They recalled the EU’s commitment at the last SPS Joint Management Committee of October 2023 to finalise its internal procedures by June 2024.
The EU reaffirmed that, regarding the work on simplified certificates, the work programme jointly agreed at the SPS Committee meeting last October foresees completing this process by June 2024.
Sanitary and Phytosanitary Measures (SPS) Committee: Maximum residue levels for plant protection products and import tolerances
Canada welcomed the European Commission’s renewed approval of the active substance glyphosate in the EU for ten years and called on the EU to make science-based assessment and food safety consideration for all its SPS-related decisions including on maximum residue levels (MRLs). As such, Canada expressed its concerns over the EU decision regarding MRLs of two neonicotinoid pesticides made on the basis of environmental concerns (to protect pollinators) rather than food safety. Canada’s view is that MRLs are not an appropriate tool to address environmental concerns and that the EU is adopting measures without recognition of scientifically substantiated best practices by trading partners. Canada asked the EU to consider less trade restrictive measures to achieve its objectives, such as the ones adopted by Canada and other trading partners.
The EU recalled that there had been continuous engagements with Canada on this topic over the past year to explain the reasoning behind the regulation, including the need to protect pollinators which was a very sensitive and important issue. The EU also asked Canada to substantiate its concerns over effect on trade as it had not seen any evidence to this effect.
Sanitary and Phytosanitary Measures (SPS) Committee: Veterinary medicinal products
Canada welcomed the constructive cooperation on such an important issue as antimicrobial resistance, which is considered a global threat. Canada called on the EU to maintain an open and transparent approach to allow third countries to assess the impacts of such regulation.
The EU underlined its continued commitment to engage with Canada. A practical information session by the EU on the implementing act and the certificates was planned to take place in March 2024.
Dialogue on Forest Products/Committee on Trade in Goods: EU Regulation on deforestation-free products
Canada underlined the importance of this issue for its stakeholders, especially in the forest products, soy, and processed food sectors. It expressed concerns on geo-localisation information requirements and the definition of “forest degradation”. Therefore, Canada asked for a delay in the full implementation of the regulation to provide time for stakeholders to adapt and prepare for implementation.
The EU voiced its intention to continue an open dialogue with stakeholders and third countries, including with Canada, recalling that numerous exchanges had already been organised in the recent past.
Committee on Trade in Goods: Artificial intelligence and cybersecurity
Canada announced that several of the concerns raised at the last Joint Committee and Committee on Trade in Goods had been addressed since. On the European Cybersecurity Certification Scheme on Common Criteria, Canada welcomed the continued engagement of EU Member States in the Common Criteria Recognition Arrangement and called on the EU to work towards a single plurilateral Mutual Recognition Agreement (MRA). Canada expressed its interest in being one of the first EU partner countries to conclude an MRA under the EU Cyber Resilience Act. Concerning the Artificial Intelligence Act, Canada welcomed the provisions regarding international standards, access to source code and sandboxes, as well as the framework on foundation models. However, Canada called for continued discussion on how to work on areas identified in the EU-Canada Digital Partnership and notably to consider mutual recognition of conformity assessment for AI enabled products for future inclusion under the CETA Conformity Assessment Protocol.
The EU underlined that the mentioned legislative acts were newly adopted, and as such a waiting period was necessary to understand their effects and determine further implementation. The EU underlined the potential for strong future cooperation in these areas as also acknowledged by the Digital Partnership and the possibilities for further work under CETA including under the Regulatory Cooperation Forum and under the Conformity Assessment Protocol.
Priorities for economic cooperation under CETA and beyond
The Co-Chairs shared their views on the priorities for future cooperation under CETA, in line with the direction set at the 2023 Canada-EU Leaders Summit. The Co-Chairs highlighted the importance of harnessing the full potential for regulatory cooperation and agreed that joints efforts are needed to step up cooperation under CETA on issues such as tackling climate change, decarbonisation, facilitating trade in environmental goods and supporting and harnessing the digital transition. They underlined the potential for cooperation under CETA by leveraging the EU-Canada Green Alliance, the EU-Canada Digital Partnership, Canada’s association to Horizon Europe and the Strategic Partnership on Raw Materials. They also touched upon the operationalisation of the EU-Canada economic security dialogue.
The co-chairs called on all Committees and Dialogues to strive to reflect these priorities in their work and to contribute, where applicable, to relevant areas of cooperation announced during the 2023 EU-Canada Summit, including the Green Alliance, the Digital Partnership, the economic security dialogue, and Canada’s Association to Horizon Europe.
EU-Canada Cooperation at the WTO
The Co-Chairs reiterated their deep-rooted shared commitment to working together to advance WTO reform, notably to ensure a successful outcome at MC13 and uphold the core principles of the rules-based multilateral trading system. Both Co-Chairs highlighted the strong cooperation of the EU and Canada when it comes to the WTO and their shared priorities. They stressed the importance of locking in progress made so far at MC13. They underlined the importance for like-minded partners to work together to preserve and strengthen the multilateral trading system, with the WTO at its centre. Both sides reaffirmed their commitment to engaging constructively and closely on those issues.
Conclusion
Canada announced it would host the next meeting of the CETA Joint Committee meeting in Canada in 2025.
The Co-Chairs acknowledged the important and constructive discussions of this year’s Joint Committee meeting. They reiterated their call for the swift and timely ratification of CETA. The EU also informed Canada that it is preparing an in-depth ex-post evaluation of the benefits of CETA including an external study with findings to be finalised in early 2025.
Both Parties also agreed to publish a on the EU’s and Canada’s respective websites and reiterated their shared commitment to continue to work together to implement CETA, to uphold the rules-based international trade system and to deepen their already strong partnership by way of exploring new areas of cooperation.
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