Slovakia’s government greenlighted the EU-Canada Comprehensive Economic and Trade Agreement (CETA) at its February 21 session.
The agreement facilitates the trading of goods and services by removing customs duties and trade barriers. It is the most ambitious free-trade agreement that the EU has reached with an important G7 partner, the Slovak Economy Ministry said.
At the same time, the government recommended the parliament to approve it as well, the TASR newswire reported.
What are CETA’s benefits?
The European Parliament approved CETA on February 15, 2017, and it took effect provisionally as of September 21, 2017. It still needed to be ratified by individual member states in order to take effect completely.
Customs duties for products exported from the EU to Canada should be completely removed after CETA has been in place for seven years, the Economy Ministry said. The agreement will make it easier for European firms to gain a foothold on the Canadian market and will create better conditions for developing investments. It will establish new trading and investment opportunities for both EU and Canadian companies.
CETA will remove duties, end limits regarding access to public orders, open the market up for services and provide predictable conditions for investors. The agreement also contains guarantees preventing economic profits at the expense of fundamental rights, social standards, government rights to regulate, protection of the environment and health and consumer safety, TASR reported.
Impact on trade exchange
The EU and Canada will remove duties for 98 percent of customs items as of the first day of CETA’s implementation, which is the best result ever achieved by the EU in negotiating a free-trade agreement. Duties in the industrial sector will be fully liberalised, which will save about €470 million annually for EU exporters.
The Economy Ministry estimates that CETA’s effect on the Slovak economy will equal 0.013 percent of GDP on average. Meanwhile, the ministry expects the agreement’s impact on job creation in Slovakia to be 0.012 percent of total employment.
“Adopting CETA will have a positive impact on bilateral trade between Slovakia and Canada, chiefly thanks to expected positive effects in the automotive industry,” stated the ministry, as quoted by TASR.
Removing customs hurdles should result in an 8-percent increase in Slovakia’s exports to Canada, and the figure might even reach 18 percent if there is a strong reaction to falls in prices.
22. Feb 2018 at 14:11 | Compiled by Spectator staff