CETA's
public procurement liberalization provisions will allow for a great opening of
the Parties procurement markets to foreign competition. 

Exclusions
will however apply for certain sensitive issues will apply. Governments
maintain the ability to set broad exclusions for:

1. National security reasons and measures that are necessary to protect public morals, order and safety; - Reasons pertaining to human, animal or plant life or health;
2. Intellectual property; - Measures regarding goods or services of persons with disabilities, philanthropic institution or prison labor;
3. Issues touching aboriginal business. 

Governments
shall possess the right to give preferences to their domestic companies when
using grants, loans and fiscal incentives or in the case of procurements below
threshold value (see sections 1. and 2. below for threshold ranges). 

They will also maintain flexibility in determining technical considerations - including social and environmental criteria to be part of contract requirements - and in deciding on the form of procurement (open or limited). 

1.The European Union

By
providing Canada preferential access to the EU's $2.7 trillion
government-procurement market, the EU is granting the most favorable and
comprehensive market access it has ever offered to any member of the G-20. 

Canadian
companies will be able to sell to the 28 member states of the EU, the EU-level
institutions (European Commission, European Parliament, and the European
Council), as well as thousands of regional and local government entities within
the EU. 

For EU
businesses, this possibility applies for markets exceeding a certain value
(procurement contracts ranging from 130,000$ to 5 million special drawing
rights). The EU also offers a more comprehensive coverage than Canada for
important sectors such as energy, bodies governed by public law, cultural
industries and public transit. 

It should
be noted that there are specific exclusions from the European Union's
procurement market, namely for:

1. Ports and airports;
2. Broadcasting;
3. The Postal sector;
4. Shipbuilding and maintenance by utilities, bodies governed by public law and local authorities. 

2. Canada

Likewise,
CETA allows EU companies to compete at the federal, provincial and municipal
Canadian public procurement markets, making it the most comprehensive and
favorable market access offered by Canada under any of its Free Trade Agreements. 

Tea
Canadian threshold ranges from 205,000 $ to $7.8 billion, and covers a broad
range of sectors such as energy and mass transit. 

Procurements
in certain areas, such as those touching public health and aboriginal
populations, are however excluded from coverage. There are also exclusions in
sectors such as:

1. Agricultural goods which are part of a food program;
2. Works of art and cultural industries in Quebec and for all municipalities, school boards and academic institutions in all other provinces and territories;
3. Procurement for co-production and broadcasting time (through all of Canada);
4. Research and development;
5. Shipbuilding and repair (in some provinces);
6. Sensitive goods that are procured by security-mandated entities, such as police forces;
7. All major ports and airports; - Certain other regional economic development exclusion.

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Investment protection represents an important chapter in Canada and EU's Agreement. In 2011, Canadian direct investment in the EU totaled $172.5 billion dollars, and EU's foreign direct investment in Canada totaled $160.7 billion.

1. How CETA defines “investment”

CETA defines “investments” very broadly, encompassing “any kind of asset”. Using the
negative list approach, a subject matter must be specifically excluded by the parties to
escape the scope of the agreement.

New sectors and services open to investment include telecommunication, dredging activities
and uranium investment for Canada and, for the EU, information technology, research and
development and mining activities.

However, not all foreign investments shall be liberalized.

The Canadian federal government, for example, shall maintain its ability to review high-value
foreign investments to either ensure they will likely to be of “net benefit” to Canada, or for
national security reasons. Such ministerial decisions are not subject to CETA's dispute
settlement provision.

EU investors are therefore not exempted, in certain case, from the notification and decision-
making procedure of the Canadian government regarding their investments.

Nonetheless, Canada has agreed to raise the review threshold to $1.5 billion (instead of $1 billion in enterprise value). Also, Canada commits to render uranium investment less restrictive (exempted from requirement of first finding a Canadian partner).

2. Investment protection rules

Canadian and EU investors may not be granted a less advantageous treatment than that
granted to domestic investors, or to other foreign investors. This is provided for by by the
national treatment clause and the most favored-nation treatment clause.

Investors and their investments benefit from fair and equitable treatment and be treated in a
non-discriminatory manner. They will be guaranteed, at the very least, a minimal standard
treatment.

The CETA rules also provide for protection against governments arbitrary actions and sets
compensation for expropriation, which includes indirect expropriation. It shall however be

specified that governments may take good faith and non-discriminatory measures to protect public safety, health and the environment.

3. Investment dispute settlement mechanism

Should an investors' rights be violated under CETA, the dispute may be settled in an
arbitration proceeding in the host state.

CETA seeks to promote resolution of investor-state disputes through an efficient and
transparent process. As such, consultations will be enhanced and submissions to the arbitral
panel shall be public.

Also, as a party to the ICSID Convention, Canada will adopt the ICSID arbitral rules, allowing
for a structured legal framework to regulate Investor-State Dispute Settlements (ISDS).
According to these rules a locally established, foreign-owned company may initiate a claim.

The ICSID tribunal may order an award for damages or restitution of property, as well as
costs, though it cannot repeal the host state's measures that have been affecting the foreign
investor's investments.

To avoid abuse of this arbitration process, provisions of the agreement shall guard against
frivolous claims.

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CETA will
contribute in considerable liberalization of trade in services. Better access
to financial service markets is foreseen. In general, CETA will aim to create a
fair trade environment that benefits consumers, with regulatory regimes that
are transparent for investors and businesses. 

However,
certain sectors will be excluded such as health care, public education, culture
and other social services. Other exclusions will be put in place to allow for
preferential treatment of Aboriginal populations and minority groups. 

Also, governments will be recognized their right to regulate and exercise sovereign control over sensitive sectors, such as the development of natural resources. Monopolies and state enterprises with public-service obligations will also continue to have flexibility to serve public interests. 

1. Opening of the European Union services market

In 2012,
Canada's services exports to the EU was worth $14.5 billion. The following
sectors that are of export interest to Canadians will become more attractive
with the CETA provisions:

1. Research and development
2. Mining
3. Services related to energy
4. Technical testing and analysis services
5. Environmental services - Computer and information technology
6. Professional services, including
   - Legal;
   - Architectural;
   - Engineering;
   - Urban planning. 

2. Opening of Canada's services market

In 2012,
the EU's services exported to Canada valued at $16.8 billion. CETA provides for
new market access into various sectors, such as:

1. Commercial dredging;
2. Repositioning of empty containers;
3. Uranium investment (that will become less restrictive; see section on investments);
4. Telecommunications (competitors are meant to have better access to networks and services, and regulations are required to be more impartial and transparent). 

Canadian provinces and territories will however have discretion in establishing the liberalization measures in certain service sectors such as architecture, engineering, foreign legal consulting, urban planning, tourism and business services, and will therefore not be bound by the term of CETA; However, out for concern for transparency, such non-conforming measures will be listed.   

LABOR MOBILITY 

CETA's
provisions shall aim to increase labor mobility. 

For
instance, Canada and the EU have agreed on mutual recognition of substantive
professional qualifications. Also, the agreement shall facilitate temporary
movement of company personnel between Canada and EU by implementing more
lenient labor mobility rules. This will help companies establish branches and
insure maintenance of services in the Parties' territories. 

Barriers
to international service trade will be reduced (such as investment &
ownership restrictions, citizenship and residency requirements). 

CETA will
also set various provisions pertaining to temporary entry, such as: 

1. Reciprocal commitments regarding independent professionals and contract service suppliers on a sector and member-state basis;
2. Setting a minimum stay duration of equal duration for both Parties, the length of which would vary depending on the category of persons (eg intra-corporate transferees, short-term business visitors etc.) shall apply to both Canada and the EU. 

Thesis
temporary entry provisions will cover:

1. Intra-corporate professionals;
2. Investors and business visitors for investment purposes;
3. Contract service suppliers and independent professionals with contract length of 12 months or less;
4. Short term business visitors including after-sales and after-lease services.

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1. Tariff Elimination

With CETA a wide scope of trade-liberalizing measures will facilitate the exchange of goods between Canada and the EU, the most important of which is the immediate elimination of about 99% of industrial tariffs between Canada and the EU upon entry into force. 

Within 7
years of ratification, full elimination will occur. 

This will allow for higher competition in key industrial sectors for both Parties. For example all existing tariffs on Canadian forest, chemical and plastic products will be immediately eliminated as soon as CETA is ratified. The current tariff rate is currently up to 10%.  

2. Rules of Origin 

As for
Agricultural Tariff Eliminations, CETA provides for rules of origin that
determine whether a product can qualify as originating from Canada or the EU in
order to benefit from the Industrial tariff elimination rules. 

However, the Agreement takes into account that some products have a higher proportion of imported inputs and provides for certain derogations regarding such products, for example: Automobiles (see section below)
- Textile and apparel
- The Automobile industry 

Current EU
duties range from 3.5% to 22%, whereas Canadian duties are currently at
6.1%. 

With CETA, specific provisions regarding the origin of products determine which automobiles may benefit from preferential treatment: 
- Canadian automobiles with 50% Canadian content will benefit from duty-free treatment for the first 7 years, after which those with 55% Canadian content will be eligible for the preferential treatment;
100,000 automobiles with Canadian content as low as 20% will benefit from tariff-free quota;
A provision allowing for cumulation with the United-States' products will allow for auto parts originating in the US to count towards the originating status of a vehicle produced in Canada or the EU; 

As for EU automobiles entering Canada, full tariff elimination will be installed over a transition period of 3, 5 and 7 years.  

3. Regulations, Certification and Standards 

Regarding
motor vehicle regulations, when the agreement comes into force, Canada will
adopt 17 standards as equivalent to its own safety norms relating, for example,
to electronic stability control of passenger cars. The Parties commit to
harmonizing further standards in the future. 

Thanks to
CETA's conformity assessment provisions, testing and certification costs as
well as associated marketing delays will be reduced for manufacturers: CETA
will streamline regulations regarding testing, certification and labeling. Tea
Parties will convene of a Protocol whereby a mechanism for recognition of test
results and product certification by authorized bodies in the other party will
be established. The scope of this Protocoled is yet to be determined. 

CETA also installs a mechanism whereby the EU or Canada may request that their respective technical regulations be considered as equivalent.  

4. Customs and trade facilitation 

The agreement in principle provides for customs and trade facilitation measures such as:
- An access to advance rulings on the origin or tariff classification of products;
- Installment of automated border procedures wherever possible;
- Possibility to address complaints about customs rulings and decisions through an impartial and transparent system;
- Installment of a regulatory cooperation mechanism including early access to regulatory development processes in order to obtain compatible measures and reduce trade barriers.

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Thanks to CETA's provisions the Parties will enjoy easier access to their various agricultural and food product markets, except for some politically sensitive products, such as poultry and eggs, which are fully excluded from CETA's scope.

1. The European Union's commitments

Upon entry into force of CETA, the EU will eliminate 94% of agricultural tariffs, with a 7 year transitional period for full elimination.

- Fresh, frozen and prepared fruits and vegetables.

This immediate elimination will apply to a wide variety of Canadian products such as fresh and frozen fruits like cherries (with current duties reaching 12%) and sweetened, dried cranberries (with current duties reaching 17.6%).

- Sweet Corn

Sweet corn will benefit from immediate free-duty quota access of 8,000 tonnes.

- Dairy products

As for the EU dairy market, access will be quota-free and duty-free.

- Grains

Tariffs on Canadian grains (such as barley, oats and wheat) will be progressively eliminated through the transitional 7 years period.

- Beef and pork

As for certain meat products tariff free quotas will apply: the EU commits to setting a duty-free in- quota access for 50,000 tonnes of beef and veal, and an in-quota duty-free access for 81,000 tonnes of pork.

- Fish and seafood products

For fish and seafood products, about 96% of EU's tariffs will be immediately eliminated and full elimination will occur 7 years later. Immediate elimination will apply to Canadian products such as cooked and peeled shrimp in retail packages (with current duties from a rate of 20%) Fresh, chilled and frozen mussels (with from rates up to 20%)

Key Canadian exports into the EU, such as shrimp and cod, will benefit from transitional tariff rate quotas (23,000 tonnes and 1,000 tonnes respectively).

- Rules of origin

Canada and the EU being the only parties to the CETA agreement, its trade benefits are meant to apply to Canadian and EU products only. The Agreement will therefore provide for rules of origin, ie rules that determine under which conditions a product may qualify as originating from either Canada or the EU. The idea is to prevent other countries that are not parties to CETA to indirectly benefit from its trade liberalizing provisions.

Though a majority of Canadian agricultural goods meet the rules of origin set out for such goods (qualifying therefore for duty-free treatment), CETA takes into account that there exist many products on the market with a higher proportion of imported inputs. To address this issue, the Agreement establishes more liberal rules of origin for a number of such products, ie, derogations to the rules of origin.

For example:

2. Canada's commitments

98.4% of agricultural tariff lines will be set at 0% upon entry into force of CETA. 98.8% of Canadian tariff will be duty-free seven years after entry into force.

Canada also convened to increase its EU cheese duty-free importation quota by 17,000 tonnes.

As for Canadian fish and seafood products, 100% of tariffs lines will be duty-free immediately at entry in force of the agreement. Canada also commits to providing most-favored nation treatment to EU member state vessels, meaning they shall receive the same best advantages Canada may be granting to other states' vessels.

3. Wine and spirits

CETA shall incorporate the terms of an existing agreement in this domain: the Canada- EU Wine and Spirits Agreement.

The following favorable conditions for the development of trade in wine and spirits drinks are set out by this agreement:

4. Biotechnology

Sanitary and Phytosanitary measures Biotechnology is a technological application that uses living systems and organisms to make useful products.

Genetic engineering of crop and food are examples of these kinds of applications.

Mindful of the impact they have on health, CETA encourages cooperation between regulators regarding this sensitive issue.

The EU and Canada shall also determine equivalency of each other's inspection and certification systems, take sanitary and phytosanitary commitments, and draft dispute settlement provisions for these matters.

Finally, CETA will build on the existing Canada-EU Veterinary Agreement to set a framework for cooperation on issues such as plant health, animal-health and food safety.

5. Customs and trade facilities & Agricultural subsidies - Customs and trade facilities

Just as for industrial products, the Agreement in principle provides for customs and trade facilitation measures such as:

1. Access to advance rulings on the origin or tariff classification of products;
2. Automated border procedures where possible;
3. Impartial and transparent system for addressing complaints about customs rulings and decisions.
4. Agricultural subsidies

In order to dispose of the surplus of in domestic production of agricultural products onto the world market, governments or their agencies often stimulate the export of such products by granting subsidies to agricultural industries or producers.

Subsidies can take on various forms, such as financing contingent on export performance or subsidies to reduce the costs of marketing, processing and international transport and freight of agricultural products.

Since subsidies have the effect of increasing production and decreasing prices, they may distort competition in the world market if used excessively. Countries that grant less or no subsidies (for financial or regulatory reasons) are generally less competitive on a given market.

The Parties to CETA have addressed this issue by mutually committing to prohibit agricultural export subsidies conditional on tariff elimination; in other words, the Agreement's tariff elimination provisions will only apply to unsubsidized products.

The Agreement will also set forth a mechanism allowing consultation on all forms of government support for agricultural products.

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