The expected economic impacts of the EU-Canada Comprehensive Economic and Trade Agreement in Finland

The CETA agreement aims to remove especially various non-tariff measures (NTMs) on trade and investment stemming from regulatory practices, in addition to the nearly full elimination of tariffs between the EU and Canada. This report analyses the expected impacts of the agreement to the Finnish economy with a GTAP CGE model and microdata analyses on the current trade structures. The expected GDP impact of 0.04 percent to Finland is slightly higher than the EU average (0.03 percent). In terms of value added, most sectors in Finland grow minimally as a result of the CETA. The highest bilateral trade effects are found for motor vehicles and transport equipment industries where both bilateral exports and imports are expected to increase by over 100 percent. Further, the extensive liberalisation of services trade is likely to have some positive effects for Finland as some 30-50 percent of the current domestic value added from Finnish exports to Canada originated from service exports. Even nearly total opening of public procurement markets to EU exporters in Canada is not, again, likely to result in very large benefits for EU firms in absolute terms, while some increases are possible. The reduction of fixed and marginal costs of exporting in the CETA agreement is likely to open the Canadian market to Finnish SME exporters, which have not entered the Canadian market as well as other export markets until now.