The Comprehensive Economic and Trade Agreement between the EU and Canada has entered into force – what does this mean for UK businesses?
On Thursday 21 September the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada entered into force. Import tariffs on about 98 percent of all products will be removed from this date, helping EU firms to achieve a competitive advantage on Canadian markets and costs savings on imports from Canada. CETA is one of the most comprehensive trade agreements signed to date. It will facilitate the movement of goods and cover a number of other areas including trade in services, investment protection, various forms of regulatory cooperation and e-commerce. It will also allow EU companies to bid for high-value Government procurement contracts in Canada. With the Canadian Government spending nearly $200 billion annually on procurement (OECD estimates 2016), the provision represents a significant opportunity for UK firms.
CETA and Brexit
UK firms can take a full advantage of opportunities under CETA from 21 September until the day the UK leaves the EU. As customs duties are an irrecoverable tax, any savings have a direct impact on the bottom line.
What do firms need to do to take advantage of CETA?
In order to benefit from CETA, companies need to ensure that their products meet rules of origin contained in the Agreement. CETA also introduces a new mandatory exporter registration system. It currently takes approximately 30 days for HMRC to process such applications. Therefore, companies wishing to take advantage of CETA need to act now.
This is long-awaited and represents the fruits of several year’s labour. It is a good thing for UK businesses as Canada is the UK’s 5th biggest trade partner outside the EU. This Trade Agreement will have significant implications across all sectors for UK businesses. Companies will want to move quickly though as the advantages provided by this Agreement will be short-lived as things currently stand.
To discuss the impact of CETA on your business, documentary requirements or obtaining authorisations, please contact Olivier Sorgniard and Anna Jerzewska in the Customs & International Trade Team.
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