The Comprehensive Economic and Trade Agreement between Canada and the EU - Opportunities to Attract Polish Investment in the Canadian Manufacturing Sector

General background: The Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU is a proposed agreement which would extensively liberalize trade between the two partners. As currently structured, the deal aims to eliminate roughly 99% of tariffs between Canada and the EU, while also encompassing issues of a “WTO-plus” nature, including investor protection and public procurement. For Canada, the expansive nature of the deal makes it the biggest bilateral initiative since NAFTA, granting the country preferential access to the EU’s 28 member states, 500 million consumers, and an economy of $18 trillion combined. According to a joint Canada-EU study  supporting the launch of the negotiations, the trade agreement could boost Canadian income by $12 billion annually (0.77% of GDP) and increase bilateral trade by approximately 20%. Similarly, CETA also has the opportunity to open new markets for the EU, helping to generate growth and create jobs by boosting exports, lowering the cost of inputs for European businesses, and bringing lower prices and greater choice of quality goods for consumers. The European Commission estimates  that CETA will bring tangible benefits to consumers and companies alike by eliminating or cutting customs duties, providing important market opportunities to European companies, including SMEs. Overall, the EC believes that the liberalization measures embodied in CETA could save EU exporters around $685 million a year for industrial goods and over $61 million a year for agricultural products. Once fully implemented, the EU could see an increase of annual income of nearly $8.5 billion.

Objective of the study: The objective of this study is to analyse two separate case studies that illustrate how adopting this new business model concept could help Polish exporters penetrate both the Canadian and U.S. markets. To do so, the study will outline how CETA could create an environment that attracts Polish investment in Canada through Polish companies looking for greater trade and investment opportunities in North America. In particular the study will focus on furniture and juice exporters, two sectors selected by the Canadian Embassy, and their opportunities to redirect trade to Canadian value chains, who would then re-export final goods to the U.S. market, tariff free, through NAFTA. The results of this study will be summarized in two main deliverables: an internal report developed for the Canadian Embassy in Poland as well as an excel dataset including tables describing the quantitative outcome of both case study scenarios.

Client: Canadian Embassy, Warsaw