On 19 October, Foreign Minister Edgars Rinkēvičs sent a reply to questions from five members of the Saeima (the Latvian Parliament) on the Comprehensive Economic and Trade Agreement (CETA) between the European Union (EU) and Canada explaining Latvia’s position and support for CETA.
“Latvia and Canada are significant partners in security and foreign policy. Therefore, I am truly satisfied that it is with Canada that the European Union has succeeded in completing negotiations on a modern and forward-looking trade agreement, thereby further strengthening trans-Atlantic relations,” says the Foreign Minister in his reply.
The Minister also is drawing attention to the fact that Latvia has been reinforcing links with Canada and supporting negotiations on a comprehensive, ambitious accord ever since the launch of the talks in 2009. In the course of negotiations, Latvia’s national position was supplemented with a proposal to include provisions on investment issues.
The Foreign Minister also recalls in his letter that, with CETA negotiations under way, the Cabinet of Ministers approved and the Saeima European Affairs Committee considered informational reports, in which support for taking the negotiations forward had been reaffirmed already since 2012. Furthermore, support for the strengthening of trans-Atlantic relations was expressed in the annual foreign policy reports (Annual Reports by the Minister of Foreign Affairs on accomplishments and further work with respect to national foreign policy and the European Union for 2014, 2015, 2015) and the government declaration. The strategic part of the Programme of the Latvian Presidency of the Council of the European Union also pledged support for the conclusion of CETA negotiations.
“As concerns foreign trade issues, the Foreign Ministry maintains communication on a daily basis with social partners and non-governmental organisations, business associations, farmers’ organisations, the Employers’ Confederation of Latvia, the Free Trade Union Confederation of Latvia, the Association of Mechanical Engineering and Metalworking Industries of Latvia, the Latvian Information and Communications Technology Association, the Timber Industries Federation, the Latvian Traders Association and other organisations and associations. We have always stressed the importance of raising awareness among the general public on trade talks and have advocated an increasing transparency; the Ministry has also organised public events on the topics of foreign trade providing an opportunity for discussions on trade agreements and Latvia’s position,” says Edgars Rinkēvičs.
Next, Minister Rinkēvičs stresses in his response letter that together with business associations and social partners, national interests were identified in agriculture, information and communication technologies and investment protection. The consultations also outlined the main goals to be achieved by Latvia in the frame of the agreement – tariff reduction, harmonisation of technical standards, avoidance of double-testing, and equal protection of investors and investments in regard to all residents of Latvia.
Upon conclusion of CETA talks, in addition to EU reservations, Latvia is entitled to national treatment concerning the acquisition of agricultural lands, the supply of veterinary services, executive search and placement services, passenger and freight transportation services (an authorisation is required, nationally registered vehicles must be used); in the CETA definition of a physical person, Latvia’s particular interests have been considered in regard to the holders of the non-citizen passports of the Republic of Latvia.
“Latvia’s small and medium-sized companies are competitive on the global scale, and further efforts should be made to create conditions for their easier entrance into international markets. The Latvian Chamber of Commerce and Industry has actively expressed support for the signing of free trade agreements with North American countries – Canada and the United States of America – thereby removing hurdles, including costs, to trade with Canada and the U.S.
Market access provisions under CETA ensure equal competition for Latvian businesses in exports of their goods and services to Canada. In practice, this means that Latvian companies will be exempted from the import duty and other duties that do not apply to local companies, thereby considerably reducing trade-related costs. This is of special importance in the case of Latvia, since the majority of Latvia’s exporters are small and medium-sized enterprises. For instance, the customs duty rate for the imports of the EU’s make-up products into Canada is 6.5%, which will be abolished upon the provisional application of the agreement. The import duty rate for potato starch is 10.5%, which will be gradually removed starting from the date of provisional application.
Companies will not be required to undertake procedures for the double-testing of technical standards, since CETA provides for their mutual recognition. Among other things, CETA contains provisions to ensure customs rules for a speedier and more transparent import, export and transit of goods. These provisions will also take effect upon signing, just like many other rules in the EU’s exclusive competence,” the Minister says.
The Minister also points out that benefits offered by the international trade agreement and the provisional implementations of its parts cannot be underestimated. In the course of negotiations, the so-called sensitive areas were identified, which should ensure that Latvian industries are granted a certain level of protection from free trade. It was achieved at the talks that the EU will not open its market to chicken and turkey meat, eggs and egg products, while allocating quotas on the import of beef (45.8 thousand tonnes) and pork (75 thousand tonnes). A transitional quota of 100 thousand tonnes will be set on wheat for a seven-year period.
“Canada is one of Latvia’s most important partners internationally; however, our trade relations are lagging behind the close political and defence cooperation. Until now, the entry of Latvian businesses into the Canadian market was made difficult by customs procedures and duties, additional costs related to differing standards, the issues of intellectual property rights and other aspects. Latvia supports the conclusion of CETA with the view to the elimination of import duties and reduction of bureaucratic hurdles and other barriers to trade. The trans-Atlantic links are being reinforced through closer cooperation in the trade, security and political sectors,” Edgars Rinkēvičs notes in conclusion of his response letter.
On 13 October 2014, the EU and Canada formally completed negotiations on the agreement. The CETA agreement has been publicly available since 26 September 2014, and a legally revised version of the agreement was made public on 29 February 2016. This has provided an opportunity for everyone interested to read and discuss the agreement, and voice their concerns.