Major new developments in global trade are expected to play a significant role in 2016 and affect nearly every Canadian business that imports or exports goods. Broad in scope and substance, many of these developments represent several years of negotiations or implementation phases. Here’s a breakdown of these developments and why they are important:
- CBSA Assessment and Revenue Management Project (CARM): CARM is a large, multi-year project that will change the way businesses interact with the Canada Border Services Agency (CBSA) by transforming how it assesses, collects, manages and reports on import revenue and trade information. The first phase, Accounts Receivable Ledger (ARL), starts on January 25, 2016 and changes the way importers will see their accounting records. ARL will replace existing revenue and cash management systems, providing new electronic payment options, improved management of accounts receivable and enhanced daily notices. CARM is expected to be implemented in phases through to 2020.
- Comprehensive Economic and Trade Agreement (CETA): Expected to come into force in 2016, the Canada-EU agreement is the country’s most ambitious trade initiative, broader in scope and substance than the North American Free Trade Agreement. Signed in the fall of 2014, CETA is expected to provide significant benefits for goods qualifying under the rules of origin. Once fully implemented, CETA could increase cooperative trade in goods and services between Canada and the EU by 23 percent, or $36.8-billion, and deliver an anticipated $12 billion annual boost to Canada’s economy. It will remove Customs duties, end limitations in access to public contracts, open-up services’ market, offer predictable conditions for investors and help prevent illegal copying of EU innovations and traditional products.
- Information Technology Agreement (ITA): If approved, this agreement would eliminate tariffs on roughly 200 IT products, valued at approximately $1.3 trillion in annual trade. This is the first tariff-cutting agreement in the World Trade Organization (WTO) in 18 years. More than 80 countries, including Canada, the US and China, representing 97 percent of world trade in information technology products have agreed to participate in the ITA. The ITA could offer trade opportunities that weren’t originally available. It could also increase competition for Canadian tech manufacturers by opening the Canadian market to similar products from other countries.
- Single Window Initiative (SWI): SWI is a joint initiative between the CBSA and other Canadian federal government departments (OGDs) that want to receive shipment release information electronically. It provides commercial traders with a single integrated electronic platform to submit all information required to comply with customs and other government regulations. Nine Participating Government Agent Agencies (PGA) representing about 40 programs are involved in the initiative. SWI is the Canadian counterpart under the Beyond the Border Action Plan, an agreement between Canada and the United States to provide commercial traders with a single window to submit all information required to comply with customs and other government regulations. Once implemented, importers will benefit from decreased wait time and reduction or elimination in examination costs.
- Trans-Pacific Partnership (TPP): The TPP is the biggest free trade deal in history. The 12 countries participating in the TPP finally reached an agreement in October 2015 after seven years of negotiations. The agreement must now be ratified by the government of each country, a process that could start in Canada in 2016. Collectively, the countries—Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam–represent 40 percent of the global GDP $27.5 trillion combined economy, or a third of world trade. With the passing of TPP, multi-national businesses would have more intellectual property protection and overall consistency as investors and traders in the region. TPP would also lower or eliminate tariffs on a variety of products.
- Transatlantic Trade and Investment Partnership (T-TIP): T-TIP is a trade and investment agreement being negotiated between Canada, the US and the 28 European Union member countries. It would increase access to both European and Canadian markets for goods and services. For example, T-TIP aims to coordinate on product testing, inspection, and certification procedures; resolve pest and pathogen sanitary issues with a single approval process; standardize forms filed at the border; and align fees and charges. Canadian businesses whose products are highly regulated should find navigating EU trade easier and incur lower costs for obtaining approvals and permits.