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Over the next two years, 90% of world demand will be generated outside the EU. That is why it is a key priority for the EU to open up more market opportunities for European business by negotiating new Free Trade Agreements with key countries. The well-being and prosperity of the European Union (EU) depends on healthy international trade and investment relationships and on the ability of Europeans to succeed in all areas of global commerce.
The EU and Canada – among the most prosperous economies in the world – are heavily dependent on international trade. Canada and the EU have a long history of economic cooperation. The Comprehensive Trade and Economic Agreement (CETA) which is being negotiated between the EU and Canada will offer EU firms more and better business opportunities in Canada and support jobs in Europe.
CETA will tackle a whole range of issues to make business with Canada easier. It will remove customs duties, end limitations in access to public contracts, open-up services' market, offer predictable conditions for investors and, last but not least, help prevent illegal copying of EU innovations and traditional products.
The agreement contains also all the guarantees to make sure that the economic gains do not come on expense of democracy, environment or consumers' health and safety.
Before embarking on negotiations for this historic agreement, Canada and the EU completed a joint study to assess its potential benefits. The study revealed that CETA could deliver a 20% boost in bilateral trade and an €11.6 billion annual increase to the EU economy. These are significant benefits, coming at an important time for all those with a stake in securing stable and expanded growth across North America.
Luxembourg as an open and exporting economy will benefit from CETA. As a founding member of the European Union, the country has always promoted free trade and the European fundamental freedoms, namely the free movement of goods, services, people and capital. In terms of exports and imports, Luxembourg is the most open country in the European Union and the third most open country in the world after Singapore and Hong Kong.
The Grand Duchy exports over 80% of goods and services produced in the country; the manufacturing industry exporting even more than 90% of its production. This openness to the world has already convinced many international companies to settle in the Grand Duchy. Abandonning such a beneficial approach would therefore be unwise.
Furthermore, we should remember that the country remains heavily dependent on Europe and that the problems facing the European Union, particularly on the economic front (low growth rate since the crisis) and employment, directly affect Luxembourg. If it seeks to reposition itself in the international economic arena, it will seize the unique opportunity that CETA offers. CETA becomes especially important considering the current economic situation.
In recent years, Luxembourg has shown a downward trend in terms of competitiveness and public finances deteriorated significantly, hence the need to strengthen the purchasing power, maximize margins and increase tax revenues. The cheapest way to achieve this while avoiding additional public debt might be a free trade agreement that promotes foreign trade.
Quick Facts on CETA
- comprehensive EU-Canada economic agreement
- removing 99% of customs duties & many other obstacles for business
- to boost trade, strengthen economic relations and create jobs
- an expected €12 billion increase for Europe's GDP
- agreed text available for the public
- presented for EU democratic approval
- a foothold in Canada provides access to North America and to the NAFT agreement