Italian Chamber of Commerce in Canada West | The advantages of CETA for Italy that no one talks about
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Schermata 2018 06 21 Alle 12.06.29

22 Jun The advantages of CETA for Italy that no one talks about

A return to the previous status quo of CETA would damage the Italian companies. This is demonstrated by the numbers.

Paolo Quattrocchi*

The data for the 1° four month period of 2018, calculated with respect to the same period of the previous year, give the value of the Italian exports direct to Canada with a notable increase with a + 11% corresponding to an increase in the value of exports from $ 2.4 billion CAD to $ 2.7 billion CAD. 

The data is the synthesis of a substantial increase in exports in all sectors, including agri-food which, from September 2017 to February 2018, has registered an increase of 14%. 

What has happened again in the field of trade relations between Italy and Canada since September 2017 is in the public domain and for those who want to deepen it can find an extensive discussion on the site of the Centro Studi Italia-Canadafrom September 21, 2017 CETA is in provisional execution, the free trade agreement signed between Canada and the European Union.

The data on the value achieved by Made in Italy in Canadian imports have been disseminated by the ICE Toronto Agency with an analysis based on the main economic indicators and recent developments due to CETA.

These numbers contradict much of the anti-CETA narrative, which is based on theories not confirmed by any evidence.

THE EXPORTS OF ITALY TO CANADA: A DATA COMPARISON1

The values in the table are expressed in $ mln CAD.

THE TRADE BALANCE FAVORS ITALY 

If we consider instead the imports of Italy from Canada, there is an increase of 24%, it being understood that the trade balance favors Italy, as the economic value of Canada’s exports to Italy is $ 892 million CAD and is extremely lower than the value of Italian exports to Canada reported in the table ($ 2.7 billion CAD). 

THE IMPORTS OF THE CANADIAN WHEAT ARE DIMINISHED

In fact, Canada plays a role as a net importer and the dreaded invasion of Canadian agri-food products (considered by some of dubious quality) has not occurred. Quite the opposite, there is a significant reduction in imports of Canadian wheat by 47% for common wheat and 91% for durum wheat.

In this regard we should mention the EU Regulation/2014, concerning the import duty of wheat from Canada, provided for the resetting of the threshold: what therefore exempt from liability CETA change of regulation.  

The data show that Canada has lost what was historically considered the first and therefore the best buyer of Canadian wheat in other words Italy. In fact, we have to remember that for decades we have been nourishing ourselves with Canadian wheat, but today there is a change, especially if it is good for our farmers’ pockets. So far, so good, then: positive the improvement of the trade balance, positive the obvious and excellent production of domestic wheat that allows us not to buy abroad.

FOOD SAFETY RULES ARE RESPECTED BY CETA

Moreover, it should be recalled that the provisions of CETA do not violate the European Union laws on food safety, but guarantee compliance with the sanitary and phytosanitary measures envisaged. And on this point it is worth mentioning that Canada is reforming the regulatory framework on food safety, a modernization of its food inspection system and traceability in line with what is applied internationally.

Why we still continue to look at CETA as the mother of all misfortunes? All technical data and certificates are the expression of what has actually occurred following the provisional entry into force of CETA.

THANKS TO CETA HAVE BEEN RECOGNIZED 90% OF THE VALUE OF ITALIAN IGs

With the removal of customs duties and the recognition of 41 geographical indications (corresponding to 90% of the total value of Italian IG exported to Canada) has, in fact not only allowed, the increase in exports, but also allowed Italian excellence products, which until September 2017 could not be exported to Canada with the original names, to be fully present and with the dignity they deserve on Canadian shelves.

What would be the consequences of a non-ratification of CETA? Reintroduction of customs duties for Italian exports and non-recognition of Italian IGs.

The non-ratification of the CETA would result before the rebirth of customs duties on all products that we export to Canada and the return to the previous (unfavorable) treatment regime for the traditional Italian excellences for the agri-food sector. The Italian excellences would once again be condemned en bloc, without exception, to the lack of recognition of their respective denominations of origin.

Moreover, the very structure of CETA for how it was conceived and built by the negotiators, far from being an unalterable monolith, actually still provides (albeit through a structured mechanism) the possibility to add to those recognized at the time of signature, other geographic identifications that over time are deemed deserving of the protection recognized by CETA. 

Indeed, one does not take into account that it is precisely the concept of geographical indication to be, legally and maybe completely unknown (already following the TRIPs agreement it had been accepted, not without difficulty, for wines & spirits), a concept traditionally foreign to Canadian legal system that instead follows a protection system based on the protection of the mark for the agri-food sector. It isn’t always easy to combine legal systems derived from different traditions, but the upside lies in having accepted, Canada, the existence of geographical names, albeit with a scope, in the number (and mind you, only in the number, not in the value) reduced compared to the numerous IG acknowledged by EU.

Moreover, it might be worth considering the values (in terms of production and export) that some Italian IGs represent: important for the Italian tradition, but not relevant to their commercial value and especially for exportability in the international markets. 

For the rest, as we said, CETA is still “open” and we therefore hope that we can positively consider this agreement in its best sense of free trade agreement which in just few months from its entry into force has already created benefits for the ‘Italy as the increase in exports and the reduction of imports (at least on a specific and controversial product such as wheat), and that, therefore, we believe it should only be experienced as an opportunity.

*Lawyer International Consultant, Equity Partner at NCTM Law Firm, 

Vice President ICCCW, 

Director Centro Studi Italia Canada


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