Canada shone on the world stage this past month, working with a fleet of European Union nations to craft the Comprehensive Economic and Trade Agreement, or CETA. Under this agreement, if enacted pending the requisite legislation, one of the biggest impacts would be the elimination of 98% of trade tariffs between European Union nations and Canadian markets, and vice versa.
The combination of the North American Free Trade Agreement (NAFTA) and CETA gives all European companies, and in fact all foreign companies with a Canadian presence access to a market of nearly one billion consumers and a GDP of over US$35 trillion.
CETA has been criticized as a boon for big business and big business alone, but the reality is that it will have significant effects on Canadian small business owners and operators as well.
According to a recent UPS Canada survey, three-quarters of Canadian small and medium-sized businesses (SMBs) recognize that free-trade agreements create opportunities in foreign markets by reducing trade barriers, and 61 per cent say exports are the key factor for continued growth and success.
CETA opens up export opportunities for Canadian small businesses. While the vast majority of small businesses with an online/e-commerce sales platform already export goods outside of Canada, CETA regulations will make it easier for businesses without existing e-commerce to engage in transactions with European Union nations. Building economic bridges and establishing links with foreign markets is financially prohibitive for small enterprises on their own: CETA regulations will lower the barrier of entry to this valuable marketplace. There is evidence that access to export services improves business confidence, as reported by The Globe and Mail.
Unfortunately, CETA is pending ratification in each of the many European parliaments involved in its creation. It may be some time before the full spectrum of tariff benefits reaches the average Canadian small business. However, this delay gives businesses the time they need to strategize effectively and to create new plans for embracing the opportunities afforded to them by freer European trade options.