The Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union has been in force for more than six years. For Quebec, our exports to our European partners now reach more than $10 billion annually, and our mutual investments between the two continents continue to increase.
It is true that such trade agreements are important for our economy, and bring several benefits and opportunities for companies with export capacity and considering evolving in these strategic markets.
Everything is not white, everything is not black, but new opportunities are emerging for Quebec’s economic sectors, and we must better seize them.
While the European Union works on its reindustrialization and the diversification of its sources of supply of raw materials, Quebec’s aluminum, iron, nickel and copper industries, as well as our emerging niches in the sectors of critical and strategic materials, could be advantaged.
The provisional entry into force this fall of the European “Carbon Border Adjustment Mechanism”, which will apply in particular to aluminum, iron and steel, could also prove advantageous for our industries , whose carbon footprint is already lower than that of their competitors.
The strength of the European aerospace industry and its shift towards carbon neutrality could also benefit our flagships in this niche, which have already succeeded in developing strong commercial links with Europe.
Also, European industrial relocation efforts in microelectronics and green energy (batteries, wind, solar, hydrogen, biofuels) could allow us to kill two birds with one stone. Diversify our own sources of supply in these areas, then open new markets for our emerging sectors and our established industries, from batteries to industrial machinery, including electrical equipment.
We benefit from increased access to European public contracts, and we have retained an appreciable right to preferential local supply for Hydro-Québec or our public transport infrastructure. Customs duties and other technical barriers to trade and labor mobility have been partly eliminated. The cultural industries, as they should, have finally been essentially excluded from the Agreement.
Nevertheless, it must be admitted that CETA is starting to weigh more heavily on Quebec’s trade balance, particularly when we examine Quebec’s agri-food sector more carefully. These important players in our economy simply cannot compete with the biggest European players, now present in our market.
The example of cheese products is a striking one, when we compare the penetration of European products on our market to that of our products on the markets of the Old Continent.
Unfortunately, too many Quebec companies in this sector suffer from the aggressive prices offered by large European producers on Quebec soil. Local cheese producers are no longer able to compete with European producers, among other things in terms of the profit margins generated by these products for our retailers.
On the other side of the Atlantic, our Quebec agri-food companies often struggle to find their place. In addition to more restrictive rules regarding health, the lack of openness of European distribution networks largely explains our difficulty in approaching commercial balance.
This is a great challenge for the Quebec general delegations and our offices abroad. We need to step up our efforts to help these companies establish themselves in European food distribution networks, so that we can all benefit more from CETA.