Saturday 24 June 2017

Irish firms will warm to new EU-Canada trade deal in the Great White North

Neil Cooney is Enterprise Ireland country manager, Canada
Neil Cooney is Enterprise Ireland country manager, Canada

Neil Cooney

In 2017 a number of milestones will be celebrated in Canada - among them the 150th anniversary of confederation in Canada and the 375th anniversary of the founding of the city of Montreal.

The recently adopted Comprehensive Economic and Trade Agreement (Ceta) between the EU and Canada is another milestone being celebrated here. It is anticipated it will provisionally come into force (pending European Parliament approval) in March - perhaps in time for St Patrick's Day.

Among the key features of Ceta are the elimination of customs duties across 98pc of product categories, a decrease in the cost of business, with less bureaucracy for SMEs in particular, and an easing of market-entry requirements.

In addition to the historical, cultural and familial ties that bind us, Canada is already an important trade partner for Ireland. Enterprise Ireland clients grew exports by 7pc in 2015, to more than €280m (in excess of C$400m).

This positions Canada as the tenth most important market globally for Irish products and services. Put another way, it's the largest export market outside the EU, China and the USA.

More than 400 Enterprise Ireland client companies are doing business in Canada, with a significant number having local presences, employing some 6,000 people. Leading sectors include financial services and fintech, education, software, digital media and animation, engineering and food.

Ceta will remove 98pc of tariffs between the EU and Canada, leading to estimated savings of €500m a year for EU exporters. In addition, a range of goods will have fewer administrative hurdles to clear due to the mutual recognition of certification and quality standards. This will benefit smaller companies in particular, which may currently need to carry out expensive testing in multiple markets.

"The removal of tariffs will allow us to be more competitive, and co-ordination of quality standards means we will no longer have to engage in costly testing procedures on both sides of the Atlantic," said Derek O'Sullivan, chief executive of Crua Outdoors, the Kerry-based manufacturer of the world's first thermally- and acoustically-insulated tents.

The opening of public procurement will make it easier for companies to operate in sectors such as healthcare, education, and public infrastructure. Greater flexibility in work visas will also allow companies to send employees on assignment in Canada for longer periods, thus improving their ability to service their client base here.

Another company that hopes to benefit from Ceta is Leading Edge Group, an Irish management and training company with a growing Canadian operation. John Whelton, vice-president of North American Operations, told me that "making it easier to service our customers here and access new procurement opportunities will be a real advantage for us going forward".

Leaving aside Ceta for a moment, it is important to appreciate the sheer size of opportunity this market represents. Canada has 36 million people; and a $2 trillion economy, forecast to grow at more than 2pc a year in 2017 and 2018.

This acceleration in economic activity is based on strong economic foundations, plans to invest more than $180bn in infrastructure - including transport and green technology - and growing strength in new sectors and technologies, complementing a more favourable outlook for the important natural resources sector.

Of course, there are challenges in addressing the opportunity - including its sheer scale as the second-largest country in the world.

There is also a need to demonstrate strong commitment, via local presences, regular visits and partnering with recognised players in the market. However, the increased availability of direct flights from Ireland makes access easy.

Ceta is yet another reason for Irish businesses to consider "the Great White North" as part of their global market plans.

Neil Cooney is Enterprise Ireland country manager, Canada

Sunday Indo Business

Promoted articles

Also in Business