Canadian businesses only lukewarm to CETA

by MM&D Online Staff

MISSISSAUGA, ONTARIO—There is a significant divide between what small, medium and large businesses in Canada support in principle when it comes to free trade and how or if they plan to capitalize on the benefits.

According to a Canada-European Union Comprehensive Economic Trade Agreement (CETA) survey, conducted by Leger for UPS, more than 80 percent of  businesses in Canada see global trade as critical to driving private sector competitiveness. Some 84 percent believe that trade diversification beyond North America is necessary. Yet, less than 25 percent of businesses in Canada strongly support CETA, with another 44 percent showing only lukewarm support.

“The ambivalence we’re seeing among Canadian business may be a result of the fact that the deal is still very new,” said Cristina Falcone, vice-president, public affairs, UPS Canada. “Still we’re optimistic that as businesses learn more about CETA and how it opens up new opportunities for competitiveness, we’ll see a stronger endorsement and strategic engagement with prospective new European customers.”

Other important findings from the UPS Canada CETA survey include:

  • Two thirds of businesses currently export globally and of these companies, only one third export to the E.U.
  • Of those businesses that target Europe for export, 37 percent expect CETA to compel them to increase export volumes to E.U. markets.
  • Only 17 percent of respondents anticipate the deal to motivate them to examine opportunities in Europe for the first time.
  • Businesses that have a supply chain strategy in place (62.7 percent) are much more likely to believe that their organizations could leverage CETA to their advantage than those that don’t (43.7 percent).
  • Overall businesses were more likely to exceed their growth benchmarks with a supply chain strategy in place (24.6 percent), rather than without (16.3 percent) Nearly 60 percent of organizations have a supply chain/shipping strategy.
  • Part of the solution to the divide between support for the deal and putting it into practice are the use of third-party partners for exporting. One half of businesses in the survey currently use a third-party company for exporting or would find it beneficial. Of those who do, 84 percent would recommend businesses of any size leverage the services of a third-party supply chain specialist.

“It’s encouraging to see that a supply chain strategy that has international legs is fundamental to driving innovation and productivity,” adds Falcone. “We encourage businesses of all sizes—but especially small business—to get to know this deal better. By integrating their products or services into global value chains; companies of all sizes can benefit from this opportunity. CETA represents an exceptional channel into a market that boasts more than 500 million people who live and work in highly developed and diversified economies.”

Representing Canada’s largest importers and exporters, Joy Nott, president, I.E.Canada adds, “CETA is a new type of trade deal suitable for companies operating in the realities of today’s global markets. The deal will reduce barriers to the movement of goods, but it will also mean competitive advantages and an increase in employment opportunities for Canadians.”

This survey was completed on-line between March 17th and March 21st, 2014 using Leger’s online panel, LegerWeb, with a sample of 807. Individuals across Canada working for, or running, a business that currently spends at least $5,000 annually on shipping were interviewed. Only those at a manager level or above qualified. Awareness of the Canadian-European Union Free Trade Agreement was not required to qualify for this survey.

A probability sample of the same size would yield a margin of error of +/- 3.5%, 19 times out of 20.

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