The Canadian Minister of International Trade, Stockwell Day has declared the FTA with the members of the European Free Trade Association (EFTA) Iceland, Liechtenstein, Norway and Switzerland would come into force from July 1 this year. The first ever FTA and associated Bilateral Agricultural Agreements were signed between both parties at the side lines of the World Economic Forum in Davos, Switzerland in January 2008. At that time it was decided that it would try to fulfill the timeline of ratification in the end of April 2009 and the same to take effect from July in the same year.
The new FTA is expected to largely benefit the Canadian producers and exporters as the duties of all Canadian non-agricultural merchandise exports are eliminated thus making it more competitive in those markets. Tariffs will also be removed or reduced on selected Canadian agricultural exports such as durum wheat, frozen french fries, beer and crude canola oil.
Now Canada will have access to state of the art technologies and other knowhow from the sophisticated EFTA markets at lower costs that includes the importation of machinery and scientific and precision instruments. Besides, the new deal is likely to attract other European countries as well in reaching similar trade ties and thereby increase the visibility of the Canadian business entities over there.
The EFTA was the seventh-largest export destination of Canada last year. The two-way trade between both parties reached $13.2bn in 2008 with Canada exporting goods worth $4.2bn. In 2007, the two-way trade was valued at about $12.9bn with the Canadian exports and imports reaching at about $5.2bn and about $7.7bn respectively.
According to the deal, there will be significant cuts in tariffs of merchandise from both sides, but Canada’s tariffs on sensitive shipbuilding products will stay. They have decided to waive these tariffs in phases over a period of 15 years with regard to the sensitivity of each product.