「CETA could create nearly 80,000 jobs in Canada and Europe.」
Unlocking CETA's potential
The signing of the Comprehensive Economic and Trade Agreement (CETA) treaty between Canada and the European Union is expected to generate positive economic benefits on both sides of the Atlantic. According to a joint study developed by the European Union and Canada, CETA could add nearly CAD 30 bn (EUR 20 bn) of GDP (about CAD 12 bn – EUR 8bn – for Canada) and create nearly 80,000 jobs for both parties. As Europe and Canada are affected by unfavorable economic cycles (respectively staggering growth and prolonged drop in oil and natural resources) the CETA creates additional growth drivers from international trade.
While it is true that free trade agreements pose their own challenges, the fact remains that they stimulate economic development for the respective parties. Thus, for the European Union, CETA represents the opportunity to strengthen its economic ties with a stable and reliable partner with one of the world's largest energy and natural resource reserves. For Canadian companies, preferential access to one of the world's largest economies and its market of over 500 million consumers is a clear competitive advantage.
All Canadian sectors will in one way or another benefit from the ratification of this free trade agreement; however the relative structure of the two economies will allow three sectors to disproportionately flourish:
- The Canadian automotive sector, which is the second largest exporter following the natural resources sector, could generate around CAD 2.0 billion in additional annual revenue through the additional export of close to 95,000 vehicles per year.
- According to recent estimates, total infrastructure investment needs in the European Union member states are staggering. Current infrastructure requirements encompass a wide variety of domains ranging from transport to energy and digital infrastructure. Europe has put in place mechanisms to support the development of such projects and increase their attractiveness to international investors with the Juncker Plan. CETA will provide Canadian engineering companies as well as pension funds preferential access to European market opportunities.
- Canada is resource rich. With the United States purchasing nearly 74% of all extracted resources, market diversification is needed, especially for the energy sector. Europe, by contrast is heavily reliant on North Sea, Eastern European and Russian oil and gas imports. CETA opens the possibility for Canada to further expand its client base and for Europe to diversify its supplier base. CETA provides a framework to envision longer term projects that could justify the development of new transatlantic infrastructure such as new oil pipelines to coastal waters, and LNG plants that would enable natural gas to be transported by tanker overseas.
The time has come to take advantage of the opportunities offered by CETA and maximize the underlying benefits in Canada and the European Union.
Unlocking CETA's potential
Why Europe will be a growth driver for Canada
- Photo credits Andres Garcia Martin / iStockphoto; COSPV / iStockphoto