Despite being less discussed than tariff cuts and investor protection, easier movement of workers between Canada and the European Union (EU) could lead to commercial gains under the Comprehensive Economic and Trade Agreement (CETA). A new Conference Board of Canada report suggests that Canadian businesses should begin preparing now in order to take full advantage of the coming opportunities.
"Removing barriers to labour mobility could make it easier for Canadians to tap into the vast EU market and beyond. However, Canadian businesses need to start planning now, even before the deal is completed," said Danielle Goldfarb, Associate Director of The Conference Board's Global Commerce Centre.
HIGHLIGHTS
Moving workers more freely into the European Union under the Comprehensive Economic and Trade Agreement (CETA) could boost Canada's traded goods, services, and investment with the EU and beyond.
Even after the deal is finalized, however, professional associations will have to reach agreements with their European counterparts on mutual recognition of credentials, and will need the support of Canadian governments.
Businesses must keep close tabs on the remaining negotiations to ensure that the final agreement includes important details such as mobility rights for the spouses and families of workers.
Canada and the EU announced that they had reached an agreement in principle in October 2013, but the deal's final terms are still being negotiated. Recent reports, for instance, still suggest that Germany is seeking substantive changes to foreign investor rights.
Tariff barriers are already low between Canada and the EU, and the Canada-EU relationship extends beyond exports to two-way investment. As a result, the biggest gains are likely to come from other parts of the deal, including labour mobility. CETA is expected to remove labour mobility barriers related to gaining temporary entry and permission to work (from 90 days to 3 years), and getting recognition of professional and technical qualifications. Improved labour mobility under the CETA addresses an important barrier to traded services and investment – both which may be less visible than exports of products but represent significant future commercial potential for Canada.
As the deal is being finalized and implemented, businesses must prepare to reap the benefits of freer worker entry into the EU. Federal and provincial governments should take steps to ensure that the deal ends up holding the best promise for success. There is also much that business can do to shape a policy environment conducive to Canada–EU trade.
According to the report, Across the Sea with CETA: What New Labour Mobility Might Mean for Canadian Business, businesses looking to move their workers or provide services under CETA should:
Encourage professional associations to negotiate mutual recognition agreements (MRA) with EU counterparts. Negotiating such agreements will be entirely voluntary, and businesses therefore should convey to professional organizations the importance of credential recognition negotiations.
Encourage governments to support business groups and professional associations. Negotiating MRAs with the EU will be a daunting task. The federal government could play a useful role in helping Canada's professional associations in negotiations.
Keep pressure on the government to get the fine print right. The final agreement should make it easy and predictable for Canadian businesses to send workers to the European Union with their spouses and families. Businesses should actively monitor the remaining negotiations and implementation of the deal.
The report examines the knowns and unknowns of CETA's labour mobility provisions, and how they build on or differ from similar provisions including thoseunder the NAFTA. The report was published by the Conference Board's Global Commerce Centre. The Centre provides evidence-based tools to help companies and governments respond successfully to the trends reshaping the global business environment.
