EU and Canada sign free trade deal
After a week of intensive negotiation, the EU and Canada have signed a much-delayed Free Trade Agreement, the Comprehensive Economic and Trade Agreement (CETA).
Earlier last week, the deal looked to be in trouble after the French-speaking Belgian region of Wallonia rejected the deal, leaving Belgium unable to ratify it. However, following intense negotiations, an addendum to the deal has addressed regional concerns. This allowed the deal to be signed on Sunday by Canadian Prime Minster Justin Trudeau and top EU officials. The revised deal still needs to be approved by the EU parliament, 28 EU Member States and by Canadian province. Subject to this, though, the agreement should enter into force next year.
Canada is the third largest global exporter of pork after the EU and the United States but shipments to the EU have been negligible in recent years. Under CETA, pork has been classified as a sensitive product. While a zero duty will apply to Canadian pork exported to the EU, it will be limited by tariff rate quotas (TRQs) to around 67,000 tonnes (product weight). This will be phased in over six years, with the existing TRQ of 4,625 tonnes rising to around 15,000 tonnes in the first year. Some technical barriers may need to be addressed before large-scale shipments can begin, though. The eventual Canadian TRQ equates to just 0.4% of total EU consumption of pork but, in reality, Canadian exporters will target cuts that offer the best returns, especially hams, so the impact on the EU market could be greater.
To read more about the Canadian pork sector and the potential implications of CETA, click here.
Stephen Howarth, Market Specialist Manager
Stephen.email@example.com, 024 7647 8856