Today, 14 free trade agreements (FTAs) give Canadian companies preferential access to 49 foreign markets, 63 percent of the world’s GDP as well as 1.5 billion consumers. Canada’s exports have evolved from fur, fish and lumber to leading‑edge technology, and complex professional services, which are covered by important non‑tariff elements of such agreements. And a dedicated team of the TCS is ramping up efforts to help Canadian companies take advantage of FTAs as well as other programs and services.

A competitive advantage for Canadian companies

SMEs looking to sell their goods and services overseas often find the customs duties prohibitive and the requirements of doing business in new markets convoluted or unpredictable. “They don’t know where to start,” says Turley, noting that FTAs are an “added bonus” to give entrepreneurs a competitive advantage in certain markets.

Turley says that through these agreements, Canadian entrepreneurs have enhanced access to some 1.5 billion consumers. They are in established markets such as the U.S., the EU and Japan, as well as fast‑growing emerging economies in Latin America and Asia. “FTAs give Canadian goods, services, investments and businesspersons an advantage over their competitors by driving costs down and providing a more stable, transparent and predictable environment in which businesses can thrive and reach their full potential,” he comments.

Canada is the only G7 country that has FTAs with all other G7 countries. Agreements currently in force include CUSMA, the Canada–EU Comprehensive Economic and Trade Agreement (CETA), the European Free Trade Association (EFTA) with Iceland, Liechtenstein, Norway and Switzerland as well as agreements involving Chile, Colombia, Costa Rica, Honduras, Israel, Jordan, Korea, Panama, Peru and Ukraine. The Comprehensive and Progressive Agreement for Trans‑Pacific Partnership (CPTPP) is now in force between Canada, Australia, Japan, Mexico, New Zealand, Singapore and Vietnam.

Get the most out of FTAs with the TCS

FTAs make trade more accessible to SMEs, Turley explains. For example, companies that export goods may benefit from a tariff advantage that makes their products more competitive. A free online tool called the Canada Tariff Finder can help businesses determine how each FTA partner is likely to classify its goods, as well as any applicable preferential tariff rate.

Global Affairs Canada has developed pages on how CETA and CTPPP benefit SMEs. These pages provide a wealth of resources and handy guides for businesses. Companies can also contact a trade commissioner to find out how to take advantage of FTAs.

Turley cautions that preferential tariff rates under FTAs do not apply automatically, they must be claimed. The exporter or importer must provide a certification of origin that includes basic information about the product and attests to the fact that it meets the applicable rule of origin.

Canada’s FTAs help to ensure that Canadian businesses are treated in the same predictable and transparent manner as their domestic competitors in foreign countries, Turley says. In the ever‑more integrated global economy, it’s important for businesspeople to be able to cross borders to facilitate trade and investment. The removal of non‑tariff barriers “helps Canadian companies expand and thrive by ensuring seamless cross‑border travel or relocation on a temporary basis,” he points out. For example, certain FTAs facilitate access for specific categories of businesspeople, such as business visitors, intra-corporate transferees, highly skilled professionals and investors.

Many of Canada’s FTAs also include rules on preferential access to government procurement, or commit partners to internationally accepted labour, environment and intellectual property standards.

“Understanding how an FTA can help your business compete abroad may seem daunting, especially for SMEs, but there are many resources available to leverage the opportunities they unlock,” Turley says. The TCS has staff in some 160 cities worldwide, including all markets where Canada has an FTA, who can provide advice and referrals to local qualified contacts. The TCS also has funding programs that support international expansion such as CanExport, which gives Canadian SMEs financial assistance to diversify to new markets.

Read the full article from Canada’s Trade Commissioner Services.