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

Author

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  • Rahel Aichele
  • Gabriel Felbermayr

Abstract

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.

Suggested Citation

  • Rahel Aichele & Gabriel Felbermayr, 2014. "CETA: What Are the Effects on Germany of the Free Trade Agreement between the EU and Canada?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 67(24), pages 20-30, December.
    • Handle: RePEc:ces:ifosdt:v:67:y:2014:i:24:p:20-30
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    File URL: https://www.ifo.de/DocDL/ifosd_2014_24_2.pdf
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    References listed on IDEAS

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    1. Gopinath, G. & Helpman, . & Rogoff, K. (ed.), 2014. "Handbook of International Economics," Handbook of International Economics, Elsevier, edition 1, volume 4, number 4.
    2. Rahel Aichele & Gabriel Felbermayr & Inga Heiland & Gabriel J. Felbermayr, 2014. "Going Deep: The Trade and Welfare Effects of TTIP," CESifo Working Paper Series 5150, CESifo.
    3. Costinot, Arnaud & Rodríguez-Clare, Andrés, 2014. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 197-261, Elsevier.
    4. Lorenzo Caliendo & Fernando Parro, 2015. "Estimates of the Trade and Welfare Effects of NAFTA," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 1-44.
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    Cited by:

    1. Fritz Breuss, 2017. "A Macroeconomic Model of CETA's Impact on Austria," WIFO Working Papers 532, WIFO.
    2. Breuss, Fritz, 2022. "Who wins from an FTA induced revival of world trade?," Journal of Policy Modeling, Elsevier, vol. 44(3), pages 653-674.
    3. Florian Dorn & Manuela Krause & Niklas Potrafke & Daniel Weishaar, 2016. "TTIP and CETA Free Trade Agreements and Their Impact – What Do Economists Say?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 69(18), pages 41-46, September.
    4. Fritz Breuss, 2020. "Pro-Globalization via FTAs in Times of COVID-19," WIFO Working Papers 617, WIFO.

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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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