Mr. Speaker, I am very pleased to rise in the House in support of the legislation before us today, and to introduce why the historic Canada-EU comprehensive economic and trade agreement, also known as CETA, is so important.
It is a great step forward in our government's progressive trade agenda. CETA addresses a full range of Canadian interests and touches on all sectors with Canada's second-largest trading partner, the European Union. The foundation of our international relations between Canada and the countries of the EU is a clear example of working together towards greater prosperity for Canada and our trading partners in Europe.
The EU is Canada's second-largest trading partner after the United States. In 2015, Canadian merchandise exports to the EU reached $38 billion, and imports totalled $61 billion. The EU is a strong, established market to which Canadian firms will gain preferential access when CETA enters into force. Canada and the EU already share a robust commercial relationship, which is about to become much deeper, to great mutual benefit.
With a total population of 507 million people and a combined GDP of over $21 trillion, the EU is the world's largest foreign investor and trader. It accounts for approximately 16% of global trade. Investment also forms a substantial portion of the Canada-EU economic relationship. The EU is Canada's second-largest source of foreign direct investment, something which is very important to our minister, totalling $242 billion in 2015 and representing over 30% of total foreign direct investment in Canada.
As well, Canada has significant investments in the EU. Our foreign direct investment totalled $210 billion in 2015, which is 21% of our foreign direct investment abroad. Clearly, our commercial ties to the EU are significant.
Trade is about goods and services, and procurement. The services sector is responsible for 70% of economic activity in both Canada and the EU, which is reflected in the current volume of trade and services. We exported $16 billion in services to the EU in 2015, and imported $22 billion during the same period.
Hon. members know that the EU is currently the world's largest importer of services. This is very good news for Canada, as we are one of the largest exporters of services in the world. Our service providers will benefit from the best market access the EU has ever provided in a trade agreement, as well as the most ambitious commitments on temporary entry that the EU has ever granted to a trading partner.
During the pre-study on Bill C-30 by the Standing Committee on International Trade, the Canadian Federation of Independent Business said that the reasons their members want to increase their trade into Europe to expand their business and pursue more opportunities as their economy recovers is because this is an alternative and important opportunity on top of their arrangements with the U.S. market.
CETA recognizes the increasingly important role that services play in global trade. It creates a wealth of new business opportunities for Canadian service providers. This agreement will ensure that Canadian service suppliers compete on equal footing with domestic providers in the EU. Canadian companies will receive better treatment than most competitors from non-EU countries.
CETA covers nearly all sectors and aspects of Canada-EU trade. It addresses the removal of tariffs, the conforming of product standards, professional certification and assessment procedures, the cultivation of investment, and alignment of regulatory regimes.
CETA creates greater certainty for business, greater protection for investments, vastly improved access to EU markets for goods and services, and new opportunities for procurement markets. That will translate into real benefits for Canadians and contribute to Canada's long-term prosperity.
CETA will provide Canadian companies with a distinct advantage in the EU market over our competitors, including the United States. It will enable Canadian businesses to have first mover advantage in developing customer relationships, networks, and joint projects. It offers Canadian small and medium-sized business enterprises the opportunity to be part of global supply chains anchored in the EU.
CETA leverages not only EU markets, but also the other trading partners of the EU. Approximately 98% of the EU's tariff lines on Canadian goods will be duty free immediately upon implementation. The elimination of tariffs under CETA creates enhanced opportunities for many of our exports to the EU, where tariffs to this day remain high. For example, Canadian fish and seafood exporters currently face EU tariffs as high as 25%. Tariffs on wood products may be as high as 14%. These tariffs will be virtually eliminated under CETA.
A protocol on conforming assessment will allow Canadian manufacturers in certain sectors to have their products tested and certified in Canada for sale in the EU. This is a significant innovation that will save companies, especially small and medium-sized enterprises, time and money.
CETA also includes provisions to enhance the recognition of professional qualifications in Canada and the EU, which is a key aspect of labour mobility. CETA's labour mobility provisions will enhance the ability of Canadian and EU business people to move across borders. It will make it easier for short-term business visitors, intra-company transferees, investors, contract service suppliers, and independent professionals to conduct business in the EU.
As well, CETA will open up new opportunities for Canadian businesses in the EU's estimated $3.3 trillion government procurement market. Once CETA enters into force, Canadian firms will be able to supply goods and select services to all levels of EU government, including its 28 member states and thousands of regional and local government entities.
CETA's obligations are backed by a mechanism for investment dispute resolution, which includes an appellate tribunal. Canada needs to attract more investment. More investment means more jobs for Canadian workers, more growth for our economy, and a stronger middle class. At the same time, it is very important to ensure that CETA protects the rights of governments to regulate in the public interest. We need to ensure that increased trade does not happen at the expense of environmental protection or labour rights. We need to ensure that trade is fair and that everyone benefits from the increased economic activity that trade delivers.
Our government believes strongly in an open global economy, and we will continue to champion an open society and open global trade. However, we cannot ignore the fact that many people are very concerned about trade globalization, which is blamed for job losses. We are now seeing the growth of anti-trade and anti-globalization sentiment. We are seeing a rise in protectionism. It is imperative that we understand and address this concern.
This is why one of the most important things that our government did right after taking office was to listen to the critics of CETA, both in Canada and in the EU. It is important to appreciate that we partnered with stakeholder, labour, and environmental groups to ensure that CETA is the most progressive trade agreement ever negotiated, and that it reflects today's expectations for doing business in a way that respects the environment, the economy, and our shared social values.
CETA represents an important step towards the development of our progressive trade agenda, one that places more emphasis on the promotion of strong labour and environmental standards; clear provisions to ensure that governments can regulate in the public interest in areas such as health, safety, and the environment; as well as the promotion and protection of cultural diversity.
CETA is a progressive trade agreement with the EU, a like-minded and long-standing trading partner. The relationship between Canada and Europe is the result of extensive historical, cultural, political, economic, and deep people-to-people relationships. We believe our shared values are important for the dignity and prosperity of all, and increasingly important in a world of shifting global power. CETA is a progressive trade agreement that upholds and promotes the values that we share with the EU.
We look forward to implementing this landmark agreement with our European partners in 2017.