International Trade Regulation

International Trade Regulation is generally understood to encompass matters concerning anti-dumping, countervailing duty and other such trade proceedings; customs law including tariff classification, valuation of goods, country of origin determination and documentation, penalties, and seizures; and import and export controls as governed by the Customs Act, Customs Tariff, the Cultural Property Export and Import Act, the Special Import Measures Act, USMCA, WTO, and GATT trade provisions.

CETA

As of September 2016, Canada entered into the bilateral Canada and European Union (EU) Comprehensive Economic and Trade Agreement (CETA), which as the federal government pointed out is “by far one of Canada’s most ambitious trade initiatives,” setting new standards in the trade in goods and services, non-tariff barriers, investment, government procurement, as well as other areas like labour and environment. CETA will open new markets in the EU for our exporters and generate significant benefits for
all Canadians.

CETA obligates Canada and the EU to eliminate tariffs that increase costs for imported goods. The Canadian Government hopes that this will allow Canadian producers, manufacturers, and exporters to have “increasingly better competitive market access for their products over time.”

“The EU is the world’s second largest economy and Canada’s second largest trading partner after the United States,” announced the Canadian Government. “It is also the world’s second largest importing market for goods. The EU’s annual imports alone are worth more than Canada’s GDP. Preferential access to this large, dynamic market offers tremendous opportunities and a real competitive edge for Canada.”

“CETA covers virtually all sectors and aspects of Canada–EU trade in order to eliminate or reduce barriers. CETA addresses everything from tariffs to product standards, investment, professional certification and many other areas of activity. The agreement’s broad scope—including improved access to EU markets for goods and services; greater certainty, transparency, and protection for investments; and new opportunities in EU procurement markets—will translate into real benefits for Canadians and contribute to Canada’s long-term prosperity.”

USMCA Replaces NAFTA

With teams led by US Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland, negotiators replaced NAFTA with a new agreement, to be known as United States–Mexico–Canada Agreement (USMCA), which Lighthizer and Freeland said in late 2018, “will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.”

Many provisions from NAFTA were incorporated into the agreement, so the changes are incremental. The negotiations between American and Canadian officials involved offering more market access to US dairy farmers, as well as Canada agreeing to an arrangement effectively capping automobile exports to the United States. Other areas of focus include updated intellectual property protections and steel and aluminum tariffs.

On July 1, 2020 the USMCA entered into force in all member states.

Brexit

After the 2016 referendum where the United Kingdom voted to withdraw from the EU, Prime Minister Justin Trudeau and then British Prime Minister Theresa May jointly announced the two countries were working to establish a new bilateral free trade deal to take effect after the United Kingdom leaves the European Union. According to press reports, “both leaders say the template for a deal would be the long-heralded Comprehensive Economic Trade Agreement.”

The Canada–EU trade deal eliminates well over 90 per cent of all barriers in trade between Canada and the European Union, and as such provides “an excellent basis for ensuring a smooth transition” post-Brexit, Trudeau said.

The UK left the EU on January 31, 2020 and entered a “transition period” in which the UK and the EU are negotiating their future relationship. After the transition period, the UK will no longer be bound by CETA. As of October 2020, negotiations are ongoing. If Canada and the UK do not reach a new bilateral agreement by the end of the transition period (December 31, 2020), Canada–UK trade will revert to WTO rules, including most-favored nation tariffs on goods.