CETA: What Are the Effects on Germany of the Free Trade Agreement between the EU and Canada?

The Comprehensive Economic and Trade Agreement (CETA) provides for the abolition of customs duties, regulatory cooperation and the protection of investments between the EU and Canada. According to simulation calculations by the Ifo Institute, the agreement could triple Germany’s exports to Canada in the long-term and double its imports. CETA could enable a long-term increase in Germany’s real per capita income of 0.2%; but Canada would benefit to a far larger extent. The greatest beneficiaries in Germany would be automotive manufacturers. Mining and parts of the agri-food area, on the other hand, would stand to lose from the agreement. Controversial investor-state arbitration courts are not required to achieve CETA’s positive effects. Investment capital, however, should be limited to foreign direct investment and should not lead to any socialization of political risks in the EU.