Thank you very much, Mr. Chair.
Good morning, everybody, honourable members.
I am extremely pleased to be here. I want to thank you very much for making it possible for me to appear at this hearing.
I started my nearly 30-year career with the European institution as a parliamentary assistant. For 15 years I dealt with relations with the European Parliament, so I really feel at home. Thank you very much for giving me the opportunity to appear here.
The object of the hearing is to speak about CETA. CETA is the most comprehensive, ambitious agreement the European Union will have ever concluded. It took a little bit more than four years to negotiate. Some people might say that's a lot. I would say it's not a lot for such a comprehensive agreement, which included, from your side—and a very positive element—the involvement of all the provinces, and from our side, the European Union, 28 member states. Coming to this result after four years is really a very good deal.
This agreement will bring very clear benefits to both parties, Canada and the European Union. I know there has been quite a lot of speculation around the increase in trade. I don't want to give an answer to these speculations, but in our vast experience as the European Union, with all the FTAs that we have concluded, and especially the most recent ones, the moment we have an FTA, the moment it enters into force, it immediately brings benefits to both parties and it immediately boosts trade considerably.
Why is this agreement, this comprehensive trade agreement, the most ambitious agreement today that we have reached? The agreement itself contains some parts that are typical of a traditional FTA. There is abolition of tariffs for industrial goods and for agricultural goods. Before CETA, or currently, the tariffs were or are not very high between Canada and the European Union. But even if it is only 3% or 4%, when you go to zero, it's evident that this will bring quite a lot of advantages.
There will be an elimination of the tariffs on practically all industrial goods, and almost all agricultural tariffs on some products that are still sensitive, notably those in the dairy sector, which will be subject to some transition periods or to some quotas.
It will also bring benefits to consumers. There will be more competition, more offers to consumers, cheaper prices. This includes consumers from both sides.
Services will be liberated in our bilateral trade to a large extent. CETA will facilitate investment on both sides by removing investment barriers. This is a new competency the European Union got a couple of years ago. They have an exclusive competency to negotiate an investment protection agreement, on behalf of all the member states.
A very important point that I stress in all the interventions I make on CETA is that CETA will deal with the abolition of non-trade barriers, such as technical, sanitary, and phytosanitary regulations. I want to stress this, because though the tariffs were not very high, there were and still are quite a lot of non-technical barriers. If those are abolished, small and medium-sized enterprises will particularly profit. I think this is a major advantage. It will save companies on both sides of the Atlantic enormous efforts and enormous costs.
CETA is not only a classic free trade agreement. As I said, it's an ambitious, comprehensive trade agreement. It is what we call a “new generation” trade agreement. Why? Because it also deals with elements such as procurement, intellectual property, geographical indicators, and movement of people.
Regarding procurement, CETA will provide an opening of the procurement at the sub-federal level—the provincial and municipal levels. The advantages are clear: more competition, cheaper prices, and open and transparent government spending that will lead to better value for money for our taxpayers. But I also have to make clear that there is a threshold. The municipalities will continue to buy locally below the thresholds. Also, I have to stress that in this regard all foreign contractors will always have to comply with local labour and environmental laws. As well, this chapter is reciprocal, so I would say that it's opening procurement not only in Canada, but also in Europe, although in Europe there is already a very open procurement market.
Intellectual property is also a key element of the agreement for us. CETA contains provisions on intellectual property that are important to the European Union, such as patent protection for medicines. Why is it important? Because we believe that adequate intellectual property is necessary. It's necessary due to the high research costs that lead to the research in these medicines and these drugs, and it's necessary to reinvest funds in new projects to improve health. We also believe that this intellectual property will benefit research-based Canadian companies. Again, because I've heard that some concerns have been expressed, in our experience within the European Union we also have publicly funded health care systems like those here in Canada. We manage to keep drug prices pretty well under control while at the same time ensuring high protection and stimulating research. So intellectual property is very important.
On geographical indicators, we are very pleased that Canada and the EU have been able to agree on protection of European Union geographical indicators. This will definitely lead to an increase in consumption of genuinely delicious European foods in the Canadian market.
Finally, on the features of CETA, I would say that it will bring people together. An important element is the temporary mobility of high-skilled workers, which was of paramount importance for Canada given the large direct investment Canada has in the European Union. Canada is the fourth largest investor in the European Union, so this temporary mobility of workers is important. That is combined with another element that is very important, which is the recognition of professional qualifications that will facilitate the movement of professionals.
I would not be the ambassador of the European Union if I did not give you some positive and realistic PR about the strength of the European Union market. I'm not saying this because I'm paid for it, but because I'm a convinced European. The European Union is the largest and strongest economy in the world.
It's a market with 500 million consumers. It is the most integrated market in the world. It's a market with free movement of persons, goods, capital, and services, which means, for example, for a product from Canada entering into the European market—wherever it enters, in Rotterdam, Antwerp, or in other places—it can be freely and automatically marketed throughout the whole European Union, a market which, I repeat, is a market of 500 million consumers. It's a very highly competitive market. I always say that if you make it there, you make it everywhere. Also, it's known that the European Union has a very strong legal system, which ensures that the laws, the legal aspects, will be respected.
All of this, I would say, also offers tremendous economies of scale to Canadian companies.
Another aspect of what CETA will bring is that the European Union is the largest trading bloc in the world. We are the first trading partner for 80 countries worldwide, compared, for example, with the U.S., which is the first trading partner for 20 countries. We are the first for 80 countries. For Canada, we are the second trading partner; I don't have to say what the first one is. By expanding our network of free trade agreements, if we include CETA, 50% of the European Union's trade will be covered by free trade agreements. If we succeed with the U.S., where, as you know, we are currently negotiating a transatlantic trade and investment partnership agreement, 75% of the trade of the European Union will be covered by free trade agreements. Regarding these negotiations with the U.S., I think the fact is that we already have CETA now in any case, and we have a political breakthrough. It will take some time before it enters into force, but CETA, compared with the American agreement, will definitely offer a considerable first-mover advantage to Canadian companies in the European Union market.
But it is very clear that the European Union and Canada will have to work together to ensure that CETA will bring benefits. To have an agreement on its own is not sufficient. You have to work together. You have to give it visibility. You have to promote it. You have to explain it. You have to advocate what the new opportunities are. Here as well, I think the Canadian government and the European Union are doing quite a lot to advocate and to explain what it means.
Again, I want to stress that it will be of huge importance to do this advocacy and explaining for small and medium-sized enterprises. Big companies don't need this. They already know this very well. Small and medium-sized enterprises in particular are the backbone of our economies. Therefore, we need to work together, and I have absolutely no doubt that we will succeed.
Finally, as a conclusion, Mr. Chair, I want to say that I know this hearing is focused only on trade and economies, but I would not be the ambassador of the European Union without highlighting the point that the relationship with the European Union is not only about trade and economics. Canada is a strategic partner of the European Union, and the European Union only has 10 strategic partners worldwide.
We work very closely together with Canada in many other fields, such as external relations, scientific knowledge, and education, to name only a few. Also, we share the same values. We have very strong cultural ties and ties of friendship. We are very strong allies and partners. With CETA, I think we will be even stronger, which will be to the benefit not only of both countries and of business, but also of our people.
Thank you very much.
