CETA - 1. Agricultural and food product tariff elimination (En)

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:

  1. Fish / seafood: lenient rules of origin will apply to certain Canadian products such as prepared and preserved salmon (for export up to 3,000 tonnes);
  2. Cooked and frozen lobster (for export up to 2,000 tonnes);
  3. Prepared and preserved sardines (for export up to 200 tonnes);
  4. Processed shrimp (for export up to 5,000 tonnes).
  5. An initial volume of 30,000 tonnes of high-sugar-containing products (such as flavored drink mixes, iced-tea mixes, instant hot chocolate and coffee) will benefit from flexible rules of origin upon entry into force of the Agreement. This volume will then increase to allow exportation of up to 51,840 tonnes of these products over a span of 15 years, following a progressive conditional growth mechanism.
  6. The derogation will also apply to chocolate and confisery (such as bubble gum, sugar candies and chocolate preparations) for up to 10,000 tonnes.
  7. Processed food (such as baked products, breakfast cereals, mixes and doughs, rice, pasta, and certain jellies) for up to 35,000 tonnes will also benefit from these more flexible rules.
  8. Cat and dog food, for up to 60,000 tonnes.

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:

  1. Mutual recognition of various oenological practices and processes and product specifications (as listed in the Canada-EU Wine and Spirit Annexes);
  2. Establishment of:
    - a list of requirements concerning consumer protection and quality standard practices for new oenological practices or modifications;
    - conditions under which geographical indications of wine and spirit drinks of each Party will be protected in the territory of the other Party;
    - rules of wine certification whereby neither of the Parties can impose a more restrictive system than the one applied on the date of entry into force of the Agreement.
  3. CETA also provides for protection of certain domestic practices such as Quebec's bottling requirements.
  4. Finally, the Agreement shall reduce the “cost of service” that Canadian provinces levy on European wines.

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.