The free trade agreement CETA (Comprehensive Economic Trade Agreement) between Canada and the EU has been in force since September 2017, which has led to the elimination of almost 99 percent of the customs duties between the two economies. The trade in goods has increased by more than 50 percent since then. Planned changes and new negotiations on extensions to the trade pact are intended to deepen the bilateral partnership soon.

As a result, the rule of origin for passenger cars under customs tariff number 8703 will be adjusted from 21 September 2024. While the current regulation stipulates that a maximum of 50 percent of the input material may be of non-preferential origin, in future a maximum of 45 percent of the materials used will be exempt from the necessary proof of preferential origin. Exceptions apply to car exports from Canada to the EU. (Annex 5A, Section D – Origin Quotas and alternatives to the product-specific rules of origin in Annex 5)

In addition, on 26 April 2024, the European Commission submitted a proposal for the simplification of dispute resolution procedures under CETA. In particular, small and medium-sized enterprises and natural persons are to be given easier access to the investment court system (ICS) foreseen by CETA.

In future, legal disputes between investors and states are going to be litigated by a one-member – instead of a three-member – tribunal. In addition, the deadlines for resolutions will be streamlined, which aims to save entrepreneurs time and money.

As the next step, the Commission’s proposal requires the Council’s approval before the CETA Joint Committee can finally ratify the new provisions.

Sources: GTAI (in German), European Commission