Ceta

EXECUTIVE SUMMARY

The CETA is a trade agreement but also is a very important message to the actual age of world where presidents want to build walls between countries like United States with México or nations like United Kingdom separating form the European Union just because they don’t want to carry on the financial problem of other countries, examples like this we have all over the world.

This message from Canada and Europe is to all the world that open progressive trade and globalization is possible opening bridges between nations and not walls or protectionist ideology.

With this open market not all would be good, there will be companies that will sell their products below the local price to acquire more piece of the cake (market share), governments trying to defend the local industries giving them a type of subsidies or safeguards.

Because of all of this in essay you will see what CETA tells about antidumping, subsides and safeguards .Also how this will affect Canada and the European Union.

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The CETA is a trade between Canada and the European Union trade agreement which cover all sectors in order to eliminate or reduce barriers. In this essay I will focus more on price discrimination such as anti-dumping, subsidies and safeguards that although is not a price discrimination it’s a way to defend the industry of a country but we will see the opinion of both sides the Canadian and the European Union.

With this trade the duties will be eliminated and putting all goods into four different categories: A, B, C, and D. A are tax free when both parties goes into effect. Category B tariffs would be reduce in four equal amounts in four years, C categories take 6 years and D eight years. And are special provisions for agricultural products with intervention prices.[1]

Each party retain all their rights under the WTO rules for anti-dumping and countervailing duties. The parties would implement the dumping and countervailing measures in accordance with WTO requirements under a fair and transparent process.

Also each party retains its rights and obligations under the WTO agreement on safeguards. They have the obligation of a transparency implement in order to have the least impact on bilateral trade.

The purpose of the tariff reduction is to reduce costs to the exporters and give them a better opportunity to compete on the market. Also with this the consumers will have choices and better prices.

ANTIDUMPING

The antidumping it’s when a company is exporting their products below the national industry prices, this companies sacrifices most of the time the reasonable utilities but sometimes they also sacrifices their costs with the intention of displacing the national industry.

The chapter three of the CETA it’s about “TRADE REMEDIES” and all the section A talks about Anti-dumping. (Antidumping and countervailing measures)

Article 3.1 “General provisions concerning antidumping and countervailing measures”

Article 3.2 “Transparency”

1. Every party would apply antidumping countervailing measures with the WTO requirements

2. Provided it does not unnecessarily delay the conduct of the investigation, each interested party in an antidumping or countervailing investigation 4 shall be granted a full opportunity to defend its interests.

Article 3.3 “Consideration of public interest and lesser duty”

After considering the information, the Party's authorities may consider whether the amount of the antidumping or countervailing duty to be imposed shall be the full margin of dumping or amount of subsidy or a lesser amount, in accordance with the Party's law.

All this in short words means that the affected party should present a complete and meaningful disclosure of the essential facts for the decision to apply measures. After this the relevant authorities will consider the amount to be impose, it can be the full margin of antidumping or a lesser amount. The amount of anti-dumping depends of the sacrifice of the exporter company, if the company sacrifice the rational utilities, the countervailing would be low. If the company sacrifices the rational utilities and costs or operating expenses the countervailing would be medium but if they sacrifice the three would be very high.

In my opinion antidumping would not be a problem between Canada and the EU because the CETA eliminate all tariffs and the companies will not take the risk of lowering the price and being punish with compensatory quotas just to acquire more market share or eliminate the local industry. I think the main two problems will have Canada and Europe will be the subsidies with governments trying to protect the local industry and more with the agricultural sector. And the other big problem the Safeguards with the companies trying to defend themselves from all the imports that will receive and probably affecting their incomes.

SUBSIDIES

The subsidies are benefits that the government directly or indirectly these means that the subsidies can be in many ways for example in cash payments, tax reduction, facilities for loans, etc.

One of the sectors that are most benefited around the world by subsidies is the agriculture and is this one is generating a lot of controversy between Canada and the EU.

In the CETA all the chapter 7 is about the subsidies

7.1 Definition

7.2 Transparency

7.3 Consultations on subsidies and government support in sectors other than agriculture and fishers