You may have heard of the North American Free Trade Agreement (NAFTA) between Canada, the United States, and Mexico. NAFTA is considered a traditional “first generation” free trade agreement (FTA) while CETA is a more sophisticated and complicated “second-generation” agreement.
Look at the table below to see how NAFTA compares to CETA:
| NAFTA | CETA | |
| Came into effect | 1 January 1994 | 21 September 2017 (provisionally) |
| Trade between partners | $1.1 trillion in 2017 | $90 billion in 2017 |
| Phasing out of trade barriers | Yes, over 15 years | Yes, over 7 years |
| Initial tariff elimination | 26% | 99% |
| Nature of agreement | Multilateral (between three countries) | Bilateral (EU treated as one entity) |
| Trade in agricultural goods | Yes, as a result of side deals between the three parties | Yes, included in the original agreement |
| Rules of origin | Favours use of domestic components (domestic content must be 62.5%) | Favours use of foreign components (domestic content must be 45%) |
| FTA beforehand? | Yes, between Canada and the United States | No |
| Labour mobility | Visas allowed for 64 professions to work in a member country for up to three years | Streamlined regulations to allow mobility of professions |
| Investment | Closed dispute settlement mechanism between member countries | Transparent dispute settlement mechanism opened to third parties |
(Source: Livingston, “Comparing CETA and NAFTA is like Comparing Apples to Oranges”)
Use this table to discuss which is better: the traditional first-generation NAFTA, or complex second-generation CETA.
Click HERE to read about how CETA’s rules on geographical indicators affected a Canadian producer.