Opportunities and Benefits of CETA for Canada’s Aerospace Exporters
Why export to the EU?
- The EU is the world’s largest importer of aerospace products – $109 billion in 2016, or 32% of the world’s total aerospace imports.
- Real opportunities being realized: Canadian aerospace supply chain exports to Europe have increased by over 70% since 2003.
- Major industrial centre: The EU aerospace industry is the second largest in the world, generating a turnover of close to €140 billion in 2013.
How will CETA benefit Canadian aerospace product exporters?
- CETA will eliminate tariffs on aerospace products.
- Canadian companies will also benefit from provisions in CETA related to temporary entry, government procurement, regulatory cooperation and conformity assessment.
- Canada will gain a preferential trade advantage with the EU that many competitors won’t have.
|Current EU Tariff||Tariff upon CETA’s provisional application|
|Suborbital and spacecraft launch vehicles||4.2%||0%|
|Aircraft launching gear and parts thereof||2.7%||0%|
|Air combat simulators||1.7%||0%|
- Canadian aerospace products that fall under the WTO Plurilateral Agreement on Trade in Civil Aircraft enter the EU duty free.
- Upon CETA’s provisional application, all EU tariffs on Canadian aerospace products will be eliminated, as well as all EU tariffs on Canadian aerospace products for military use.
- The CETA rules of origin for aerospace products are clear and simple and will allow products produced using non-originating parts and materials to qualify for duty-free access to the EU market.
Other non-CETA related aspects to keep in mind when exporting aerospace products to the EU
- Differing standards set by Transport Canada and the European Aviation Safety Agency (EASA), as well as policy initiatives and EU regulations, such as new rules governing the use of chemicals (REACH), can impact time-to-market and incur additional adaptation costs.
- CETA provisions will make it easier for short-term business visitors, intra-company transferees, investors, contract service suppliers, and independent professionals to conduct business in the EU.
- Entry without the requirement of a work permit for 90 days in any 6 month period for any of the following activities: meetings or consultations, research and design, marketing research, training seminars, trade fairs and exhibitions, sales, purchasing, after-sales or after-lease service, commercial transactions, translation and interpretation (some conditions apply in some Members States).
- New under CETA, the EU has offered Canada additional market access at the sub-central level (regions and municipalities).
- At the sub-central level, Canada gains access to procurement by local contracting authorities as well as by bodies governed by public law, as well as 100% access to European public utilities.
Regulatory cooperation and conformity assessment
- CETA includes a formal mechanism designed to facilitate joint initiatives for regulatory cooperation and conformity assessment.
- The Protocol on the Mutual Acceptance of the Results of Conformity Assessment will provide a mechanism to facilitate the acceptance by Canada and the EU of test results and products certification from the other party. Lists have been established to prioritize product coverage under the Protocol, with the ability to add future categories of goods. These provisions may reduce costs and marketing delays for Canadian producers.
|Top 5 Suppliers of Aerospace Products to the EU||% of Import Market Share|
|Source: Eurostat (2016)|
Once CETA is provisionally applied, Canadian exporters of aerospace products will enjoy the advantages created from the agreement over competitors based in countries that do not have a preferential trade agreement in force with the EU.
For more detail on how CETA benefits your company, contact a Trade Commissioner today.
- Date Modified: