CETA Essay: Benefits For Canada, Impacts On Consumers, Employment, Competitiveness, Culture.

The benefits to Canada of entering into this free trade agreement with Europe

Describe about the Contemporary Canadian Business for Rationalized Procedure.

The benefits to Canada of entering into this free trade agreement with Europe

CETA creates a rationalized procedure for the acknowledgement of overseas qualifications in some particular sectors, and a comprehensive context by which professional organizations and regulators might discuss common recognition settlements for other professions (Marise Cremona, 2016).  An expert stated that’ “if the deal referred to as CETA is ultimately sealed, a very big market for Canadian companies will emerge. Through CETA, Canada will get a chance contact opportunities in municipalities and EU regions. Generally it is estimated that this will be advantageous to both European and Canadian companies. Places of interest in the deal involve huge quotas for Agro-products and opportunities for Canadian companies to tender for projects in Europe through the EU procurement market.

In regard to CETA overview that government of Canada has provided, the agreement could do away with 98 per cent of the tariffs on items traded by across EU and Canada. This would present a clear advantage to the exporters from Canada over other nations also exporting their goods to Europe. E.g. the 8 per cent Canadian maple syrup tariff would be eliminated by CETA. This way, in the eyes of EU buyers it will appear to be more competitive than others.

In the current, about 25 per cent only of EU tariffs lines will be duty free on goods from Canada exported to EU. In the first CETA takes effect, goods originating from Canada will be duty free by 98 % 0f EU tariff lines. A further one per cent will be scrapped within a seven years period. Upon full implementation of CETA, there will be 99 per cent duty free to EU tariffs lines.

Therefore there will be significant and tangible chances for Canadians to trade in the EU market. This will make Canada exporters to build brand markets for their products or widen the already existing in EU.

Potential impact on consumers, employment, competitiveness, and culture in the Canadian context

In general, a number of witnesses agreed that the EU-Canada CETA would benefit the economy of Canada. The agreement is expected to be positive in several ranks, especially in the medium and long term. The EU-Canada CETA will improve gross domestic product (GDP) of Canada, Lower Canada taxpayers cost, promote creation of jobs, stimulate to-way flow of investment among Canada and EU. The presence of Canadian businesses will also be increased in the Europe market. A preferred market of over five hundred million consumers will be accessed by Canadian businesses where they would get chances to investment opportunities, technology and partnership, manufacturing, developed licensing in technology and distribution (Steffen Hindelang, 2016). The agreements seems to be far-reaching and ambitious to boost growth of economy, job creation and increase across the board opportunities for all sized companies, whether large, medium or small in every sector (Andrea K. Bjorklund, 2016). It will also businesses and consumers enhanced access European services and products due to improved competitiveness.

Potential impact on consumers, employment, competitiveness, and culture in the Canadian context

Under CETA there will be a positive impact to the consumers in Canada. Although industries form Canada might face higher completion from European industries, they must go on thriving in case the agreement is adopted in order to ensure economic transition is efficiently taking place. It will give all Canadians a better choice to consumer products (Savvas Katsikides, 2015). This will result to quality services and subsidized prices. Domestics industries that previously have had advantage of tariff barriers will now be forced to compete with imports of lower cost. This way industries’ continuity to thrive will be enabled due to a proper-balanced agreement accompanied by an excellent economic transition plan.

CETA implementation will make sure that Canada is in a better marketplace internationally (Congress, 2012). Combination of CETA and NAFTA (North American Free Trade Agreement) will make Canada have a priority access eight hundred million up nine hundred million richest consumers in the world.

In terms of employment trade deals like CETA agreement in the long term might result creation of more jobs to Canadians. Anyway, between job creation and economic liberalization agreements automatic correlation does not exist. In the short term there might be loss of jobs if there is increased competitiveness and productivity due to trade deals. Increase in economy productivity requires less labor which means lower jobs in the short term (Hübner, 2011). If more trade for both exports and imports, more jobs in relation to import might be created as distribution and other services are needed. There are twin references to culture provided in the preamble of CETA. The agreement provides conservation to control inside their territories & resolving to conserve their elasticity to meet policy goals. Examples are public morals and the promotion, public health, protection of cultural diversity, environment and public morals. All states have the right to implement, develop and maintain their cultural policies. They are also entitled to culturally support their industries with the aim of making cultural expressions diversity stronger. The major objective is to conserve cultural identity with the inclusion of financial support and regulatory measures. Cultural exemptions revolve around five of the trio dozen agreement chapters. They are namely cross-border trade in services, subsidies, government procurement, investments and domestic regulation (Savvas Katsikides, 2015). There is partial and asymmetric exception to culture included in CETA. In Canadian context all cultural industries as defined in trade agreements are covered.

Under consideration of UNESCO inclusion, preamble has provision as to how the EU and Canada can agree to culture exemptions. The exemptions include the following:

• Cultural independency provided assurance that both parties are aware of intentions to exempt.
• Elasticity on not demanding cultural exemption in irrelevant chapters.
• Canada and the EU can request in future dealings with outside partners and reject cultural exemptions.

Why Canadian govern should not play the role of guardian of businesses

There is limitation of cultural exemptions to some chapters and provisions that are relevant except for the subsidies because they are completely exempted (Casteleiro, 2016). Therefore anything that is not in each party specific reservations lists or article is not under protection as while. For Canadian cultural industries and EU audiovisual services, exemptions are confined to particular chapters.

Why Canadian govern should not play the role of guardian of businesses           

Sometimes views of public opinion in policy making can play an important role in policy making. This is because as the opinions themselves policies can be diverse. Abraham Lincoln stated that “public opinion in this country is everything” (Congress, 2012). Foreign policies give interesting beginning points. It has historical samples indicating situations where public opinion has and hasn’t effect on government policies.

Giving business opportunity to be independent regulators makes them accountable facilitating stable, efficient and fair financial system operation. To the point, independence should optimumly be respected in accompaniment of healthy and clear mechanisms of accountability that give suitable surveillance and balances. However, practically, the level of independence and accountability will rely on statutory and institutional structures (IBP, 2015). It will also rely on the Canadian business culture. Independency of investors and the market make them to prepare and be fully equipped by undue industry influence and political pressure. Nevertheless, accountable regulation of the markets and investment in Canada requires respect in discharge of powers and open to questioning, evidence, new ideas and feedback.

Sometimes government can be politically swayed and get biased in when making specific decisions and policies. The incumbent government in setting up policies may seek to influence the economic cycle in order to match the next elections. Some governments tend to make poor decisions on economy. Particularly they rush to make short term decisions that are highly politicized (Steffen Hindelang, 2016). The government is capable of allowing economy deterioration so that it can get an opportunity to mend it again for its own advantage.

Potential negative consequences of removing tariffs on European imports to Canada

Canadian producers will ultimately be disadvantaged and discouraged due to increased competition from increased imports. Goods and services will be provided in Canada by the EU at lower prices which domestic suppliers might not meet due to their high cost of production.

The rate of employment might go down because producers might decide to reduce the number of employees in their companies.  As the competition rises consumers will have a variety of products and service to choose from. Therefore the sales of a specific company will go down hence decreased revenues. The low demand will lead to decreased prices which will automatically affect the profit margin of a product. To cut off the costs of production the employers opts for lesser number of workers and low production.

Although consumers in Canada might enjoy subsidized prices for the products, they might as while experience low quality products as services. As the producers try to lower cost of production it might affect the quality of end products. Therefore there will be less customer satisfaction.

Every country has a cultural way of production and consumption. On the other hand products that are at the disposal of citizens tend to influence their way of living. Availability of EU’s products in the Canadian market also tends to influence Canadians culture. For example introduction of new musical instrument in Canada can make Canadians to adopt the kind of music they are used for.

Impact of foreign ownership of Canadian businesses to Canada

Positive

Economic research has proven that foreign business activity enhances competition, new technology, consumer choice, innovation and investments (Marise Cremona, 2016). Although policies with restrictions to foreign business activities are designed to defend specific internal interests at last they injure better part of economic participants and obstruct the growth of a strong and implementable economy. As per the provided proves Canada should target to develop a structure that encourages foreign business activity. This will help improve competitiveness of Canadian products and services compared to other industrialized nations (Casteleiro, 2016). Recognizing economical advantages of external business activity should have an important role completion policy and later investments in Canada.

Canada’s competitiveness will be enhanced by foreign investments. This will happen through revitalization of home industries and increment of services and goods flow to among Canada and its trade partners (Susy Frankel, Cambridge University Press). Canadian companies, workers and consumers will be attached to new global economy that knowledge-based. Apart from the provision of jobs by foreign investments, Canadians will be introduced to new international technology, new market access and new skills of management.

Foreign investment might be of a strategic advantage to Canadian resource-rich territories. Natural resources harbored at Nunavut offer opportunities for investments in various sectors. These sectors range from ecotourism to mining to commercial fishing. Nunavut is also a excellent spot for pivotal business destination and exploration of science. This is facilitated by Northwest Passage Navigability.

EU being the second largest investor in Canada after the United States, it might increase creation of jobs and enhance economic growth by putting investments in premeditated parts of the territory. CETA will make sure that Canadian exporters are allowed to of the firms in European Union relating to European Union government procurement supply any contracts. Opportunities will be secured and expanded to allow Canadian firms to offer services and supply goods to the 3 major EU-level institutions. Namely,  “the Parliament, the EU Commission and the Council” (Marise Cremona, 2016). Canadian workers will also get the advantage of a better access to EU’s procurement market.

It will not be easy for Canadian to invest in EU. This is because investing in foreign countries is more expensive that exportation of goods. Prepare enough money to set up operations might be very imperative. Direct investments and foreign exchange rules can impact Canada in a negative way. Investments that are legal in Canada might be illegal in the EU. Therefore it might be impossible for a Canadian to pursue an open opportunity (Andrea K. Bjorklund, 2016). Given that EU has a better economy than Canada; EU direct investment might lead to modern day economic colonialism which may leave Canada exposed to exploitation by foreign companies.

Canada might be hindered to invest domestically. All the resources might be focused to investing in EU other than domestically. Political changes in Europe can affect the Canadian economy (Savvas Katsikides, 2015). Sometimes foreign direct investments are highly risky because other countries political issues can change instantly. In this case several of the risk factors to experience might be tremendously high. Historically foreign direct investments sometimes do affect exchange rates to the detriment of one country and advantage the other. In most cases the most developed country will always gain an advantage because it has a stronger economy.

From Canada’s point of view direct investment in the EU might be capital intensive. This might be economic non-viable which is highly risky (Congress, 2012). Also the government might gain control over investors’ assets and property due to political changes. This is called political expropriation.

References

Andrea K. Bjorklund, F. P. (2016). Yearbook on International Investment Law and Policy 2014-2015. Oxford: Oxford University Press.

Casteleiro, A. D. (2016). The International Responsibility of the European Union: From Competence to Normative Control. Cambridge : Cambridge University Press.

Congress, C. L. (2012). How Well is Public Health Care Protected from Canada-EU Free Trade?: Backgrounder on CETA. . Cornwal: Canadian Labour Congres.

Hübner, K. (2011). Europe, Canada and the Comprehensive Economic Partnership Agreement. Abingdon-on-Thames,: Taylor & Francis.

IBP, I. (2015). Canada Investment, Trade Strategy and Agreements Handbook Volume 1 Strategic Information and Materials. Raleigh: Lulu.com.

Marise Cremona, H. W. (2016). Private Law in the External Relations of the EU. Oxford: Oxford University Press.

Pierre Sauvé, M. R. (2016). Research Handbook on Trade in Services. Edward Elgar Publishing.

Savvas Katsikides, P. I. (2015). Societies in Transition: Economic, Political and Security Transformations in Contemporary Europe. Berlin: Springer.

Steffen Hindelang, M. K. (2016). Shifting Paradigms in International Investment Law: More Balanced, Less Isolated, Increasingly Diversified. Oxford: Oxford University Press.

Susy Frankel, D. G. (Cambridge University Press). The Evolution and Equilibrium of Copyright in the Digital Age. Cambridge: Cambridge University Press.