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Canada-EU : Free Trade Must Be Secure Trade

2015-07-23

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CANADA-EU:FREETRADEMUSTBESECURETRADE

JASONMOSCOVICI*
ROBIC,
LLP
L
AWYERS,PATENTANDTRADE-MARKAGENTS

Aftermanyyearsofnegotiations,itwasannouncedthatthefinaltextoftheCanada-
EuropeanUnionComprehensiveEconomicandTradeAgreement(CETA)hadbeen
completedandwasheadedfortranslationintothe23officiallanguages.

ThefulldocumentwasfinallymadeavailabletothepubliconSeptember26th2014,
inthecontextoftheCanada-EUSummitinOttawa.Whilemanyhavealready
speculatedontheimpactthatthishistoricaltreatywillhave,theagreementwillstill
firstneedtoberatifiedbymemberstates,whichisn’tlikelytohappenbeforetheend
of2015-2016.
Nevertheless,nowisasgoodatimeasevertotakeastepbackandreflectonthe
impactthatCETAwillsurelyhaveonthecurrenttradinglandscape,especiallyinlight
ofthemanytechnicalandregulatoryhurdlesthatCanadianmanufacturershaveto
meetinordertobeabletoselltheirwaresandservicestotheEU.

Anyonewhomanufactures,distributes,importsorexportsproductsforsale
internationallyknowstheheadachesthatcanbecausedbynon-harmonized
regulationsanddifferingindustrystandards.Productclassification,safety
requirements,labelling,certification,marketingandenvironmentalconsiderations
haunteventhemostintrepidentrepreneur,whoissigningdistributiondealsfornew
productsfasterthantheycanbecertifiedforcompliance.Ofcourse,boththeindustry
andthepublicrecognizetheimportanceofhavingtopassthroughtheseregulatory
hulahoopsanditispreciselythis,amongstmanyotherconcerns,thatCETAhasset
itselfouttostreamlineandaddressinthecontextoffreetradebetweenCanadaand
theEuropeanUnion.
CETAinaNutshell

Briefly,CETAistheproductofbilateralnegotiationsbetweentheEuropeanUnionand
Canadathatbeganin2009.CETAisbeingtoutedasabroader,moreambitious
initiativethanNAFTA,andthehopeisthatCETAwillopennewmarketsforthe

©CIPS,2015.*FromROBIC,LLP,amultidisciplinaryfirmofLawyers,andPatentandTrade-markAgents.Publishedin
theWinter2015(Vol.18,no.3)Newsletterofthefirm.Publication068.189E.

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exportationofCanadianproductsandservicesintotheEU;therebycreatingnew
tradeopportunitiesforCanadiandistributors,manufacturersandserviceproviders.

OneoftheguidingprinciplesbehindCETAisthegrantingofpreferentialaccessto
Canadianproductsandservicesbyeliminatingpreviouslyapplicabletariffs.Atits
core,CETAisexpectedtoremoveapproximately99%ofthetariffspresentlyinplace
betweenthetwoeconomies,normallyappliedtoawidevarietyofproductsand
services,suchasnon-agriculturalgoods(industrialandmanufacturedgoods),aswell
asfishandseafood,forestryproducts,biotechnologyandmedicalproducts.

Thisreductionand/oreliminationoftariffsareseenasoneofthedrivingforcesthat
willhopefullyincreasetrade.However,tariffsaren`ttheonlybarrieraffectingthefree
flowofgoodsorservicesacrossborders:aspreviouslystated,technicalbarrierssuch
asregulatorycompliance,certificationtestsandvarioussafetystandardsalsocreate
resistancetoafreeflowingmarket,whicharealsoaddressedbyCETA.

CEMarking,CETAandRegulatoryCooperation

Asanexampleofthemanyregulatoryrequirementsapplicabletoanygivenproduct
orservicedistributedorprovidedintheEU,CEmarkingisrequiredinordertoshowa
product’scompliancewithagroupingofEUdirectives.TherecognizableCEmark
allowsforthecirculationofproductsmarked“CE”throughouttheEuropeanmarket.
Morespecifically,aCEmarksignalsthataproductbearingthemarkcanbesoldin
anymemberstateoftheEuropeanEconomicAreaandsignifiesthatthe
manufactureroftheproducthasverifiedandconfirmedthattheproductinquestion
complieswiththerequirementssetoutbytheapplicabledirectivesrelatingtothat
specificclassofproduct.Whereadirectiverequiresit,theproductmayalsoneedto
beassessedbyathirdpartyregulatorybodytoestablishsuchconformity.For
example,let’ssayamanufacturerwhomakesapopulartoyalreadybeingsoldinAsia
wishestonowsellanddistributethisproductinafewEuropeanstates.Tobeableto
doso,itwouldfirsthavetoverifywiththerelevantauthoritiesifanyspecificCE
directivesexistforthisclassofproduct.Ifitsohappensthatthereisadirectivethatis
specificallyapplicabletotoysafety,thismanufacturerwillhavetofirstmeetthese
requirementstobeabletoaffixtheCEmarkonitsproductanddistributeittothe
Europeanmemberstates.
Thisresponsibilitynaturallyvestswiththemanufacturer/provider,andaCEmarkacts
asasignalthatalllegalrequirementsnecessarytobecompliedwithhavebeenmet.

However,this,aswellasotherregulatoryconsiderations,hasbeenasourceof
confusion;andobtainingaCEmark,oranyotherrequiredformofregulatory
certification,hasbeenknowntocausedelaysandunforeseenexpensesforanyone
lookingtoentertheEUmarketfromabroad.

3
Therefore,inordertofurtherencouragetradeandtotrulybenefitfromthe“0%”tariff,
theconsolidatedCETAtextincludesa“regulatorycooperationchapter”,afirstofits
kindforany“CanadianFreeTrade”typetreaty,whichwasputinplacemainlyto
addresstheregulatoryconcernsthatcanfollowanincreaseintrade.

TheregulatorycooperationchapterofCETAisintendedtocreateaframeworkunder
whichcooperationbetweenCanadianandEUregulatoryauthoritieswouldbe
facilitatedviathecomparisonofdata,analysisofpractices,riskassessments,aswell
asviatheevaluationofoverallregulatoryimpact.Whilethisisnotapushfor
“regulatoryharmonization”perse,suchregulatorycooperationisnevertheless
expectedtodiminishtradebarriersandfacilitateearlierandcheaperaccessto
regulatorydevelopmentprocessesandcomplianceassessments.Thisisnotbeing
“sold”asaguaranteeofequivalentregulatorystandardsbetweenbothmarkets,but
impliesthatamechanismwillbeinplacetoallowbetterguidanceandbetter
communicationbetweenthegoverningregulatorybodiesthatestablishandvalidate
theserequirements.

Tothiseffect,hereareafewnotableexcerptsfromtheconsolidatedCETAText,
Section26onRegulatoryCooperation:
ArticleX.2.4:Principles
4.[…],thePartiescommitthemselvestofurtherdevelopingtheirregulatory
cooperationinlightoftheirmutualinterestinorderto:(a)preventandeliminate
unnecessarybarrierstotradeandinvestment;(b)enhancetheclimatefor
competitivenessandinnovation,includingthroughpursuingregulatorycompatibility,
recognitionofequivalence,andconvergence;and(c)promotetransparent,efficient
andeffectiveregulatoryprocessesthatbettersupportpublicpolicyobjectivesand
fulfilthemandatesofregulatorybodies,includingthroughthepromotionof
informationexchangeandenhanceduseofbestpractices.

ArticleX.5:CompatibilityofRegulations
Withaviewtoenhancingconvergenceandcompatibilitybetweenregulatory
measuresoftheParties,eachPartyshall,whenappropriate,considertheregulatory
measuresorinitiativesoftheotherPartyonthesameorrelatedtopics.This
considerationdoesnotpreventeitherPartyfromadoptingdifferingmeasuresor
pursuingdifferingapproachesforreasonsincludingdifferentinstitutionaland
legislativeapproaches,orcircumstances,valuesorprioritiesparticulartothatParty.”

Withregardstotheassessmentofstandards,CETAalsoseekstoestablisha
protocolthatwillallowforthereciprocalacceptanceoftestresultsandproduct
certificationassessmentsbytherespectiverecognizedregulatorybodiesinCanada
andtheEU.Also,inordertofacilitatetheassessmentandcertificationofaproduct,a

4
Canadiancertificationbodycouldbeenabledtoseekaccreditationfromabody
locatedentirelywithintheEU.Ifsuchaccreditationisobtained,testingand
certificationcouldthereforeberecognizedaspartofonemutualaccreditationforboth
regionsbutoccurringinonlyone,therebyreducingcertificationcostsandavoiding
unnecessaryregulatorydelays(onecanhope).
Assuch,hereareadditionalnotablegeneralexcerptsfromtheconsolidatedCETA
Text,section6,(ChapterXX:TechnicalBarriersToTrade):

Article3:Co-operation
ThePartiesshallstrengthentheirco-operationintheareasoftechnicalregulations,
standards,metrology,conformityassessmentprocedures,marketsurveillanceor
monitoringandenforcementactivitiesinordertofacilitatetheconductoftrade
betweentheParties,aslaiddowninChapterXXX(RegulatoryCo-operation).This
mayincludepromotingandencouragingco-operationbetweentheirrespectivepublic
orprivateorganizationsresponsibleformetrology,standardization,testing,
certificationandaccreditation,marketsurveillanceormonitoringandenforcement
activities;andinparticular,encouragingtheiraccreditationandconformity
assessmentbodiestoparticipateinco-operationarrangementsthatpromotethe
acceptanceofconformityassessmentresults.
Article7:MarkingandLabelling
[…]withrespecttotechnicalregulationsrelatingtolabellingormarkingrequirements,
thePartiesshallensuretheyarenotprepared,adoptedorappliedwithaviewtoor
withtheeffectofcreatingunnecessaryobstaclestointernationaltrade.Forthis
purpose,suchlabellingormarkingrequirementsshallnotbemoretrade-restrictive
thannecessarytofulfillalegitimateobjective,takingaccountoftherisksthatnon-
fulfillmentwouldcreate.”
Itmustbementionedhoweverthatthescopeandeffectofthisundertakingto
cooperateremainstobeseenandwillmostlikelyvaryfromsectortosector.CETA’s
approachwithregardstocooperationinregulatorymattersisneverthelessbeing
marketedascreatingfewerbarrierstotrade,onceregulationsarefinallyputinplace.
CETAalsoprovidesforspecific“sectoral”cooperationregardingthesafetyof
consumergoods.
Inconclusion,itisdifficulttoevaluateallthechangesthatCETAwillhaveonthe
presentCanada-EUtradingenvironment.Itgoeswithoutsayinghoweverthatfor
thosewhoarealreadyexportingproductsandservicestotheEUfromCanada,orare
evaluatingtheopportunitytodoso,itisadvisabletokeepaneyeoutforfurther
updatesregardingCETA,andtoconsultalegalprofessionaltonotgetcaughtinthis
newregulatoryweb.

Pourdesservicesdeconseilsdansledomainedelapropriété
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agroupoflawyersandofpatentandtrademarkagentsdedicatedsince1892to
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industrialdesignsandutilitypatents;trademarks,certificationmarksand
indicationsoforigin;copyrightandentertainmentlaw,artistsandperformers,
neighbouringrights;computer,softwareandintegratedcircuits;
biotechnologies,pharmaceuticalsandplantbreeders;tradesecrets,know-
how,competitionandanti-trust;licensing,franchisingandtechnology
transfers;e-commerce,distributionandbusinesslaw;marketing,publicityand
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TM/MC

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®/MD

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®/MD

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®/MD

PATENTER
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orstylizedR
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orstylizedROBIC++++
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