Question:Use the passage below to answer the attached image below.CETA and Canadian Business The EU Commission negotiated CETA, with oversight from the EU Parliament and the Council, on behalf of its 28 member states. The Canadian federal government together with representatives from the provinces and territories were involved in the negotiations from Canada's side. Following seven years of negotiations, CETA was signed on October 30, 2016, and entered into force provisionally on September 21, 2017. CETA is a landmark agreement meant to boost trade between Canada and the EU; diversify Canada's exports and investments; and promote labour rights, environmental protection, and sustainable development. It represents tremendous opportunities for business on either side of the Atlantic. The following sections discuss what CETA is, what it covers, how it impacts businesses, and what "provisionally in force" means. WhatCETA/s CETA is a trade deal between the EU and Canada that establishes a free trade area in conformity with Article XXIV of GATT 1994 and Article V of the GATS. However, it is more elaborate than a simple agreement to eliminate all tariffs, since it encompasses the majority of economic issues between Canada and the EU. CETA is divided into thirty chapters and two protocols, as well as a number of annexes, and covers issues relating to trade in goods, services, trade remedies, sanitary and phytosanitary measures, investment, e-commerce, mutual recognition of professional qualifications, competition policies, subsidies, intellectual property, labour, the environment, and other matters. What CETA Covers With over 1,500 pages in the agreement and hundreds of pages in annexes and guides, CETA is truly a comprehensive agreement and covers most aspects of Canada- EU economic relations, all of which cannot be reviewed in this text. The aspects of CETA that will be discussed below are ? trade in goods, ? rules of origin, ? customs and trade facilitation, ? trade in services, ? investment protection, and ? government procurement.CETA Chapter 2: Trade in Goods Since the goal of any trade agreement is to spur trade, the existing tariffs and other trade barriers have to be removed. CETA removes 98 percent of duties, taxes, and other import fees on goods traded between the EU and Canada. An additional 1 percent will be phased out over a seven-year period. Prior to CETA, only 25 percent of EU tariff lines on Canadian goods were duty-free. This change will amount to approximately $880 million in saved duties per year once all the tariff reductions are in effect. 24 Since both Canada and the EU member countries are members of the WTO, CETA had to be drafted in conformity with all of the WTO agreements. In other words, the national treatment and MFN as well as other WTO rules are imbedded and expanded on in CETA and the EU, and Canadians can expect to trade in a non-discriminatory market for their goods and services. The EU is an economic and monetary union, and as such the member countries do not retain their own external tariffs. This means that Canadian goods are subject to the same duty-free treatment regardless of the country through which they enter the EU. Duty-free treatment is applied to goods entering the EU based on the type of good and whether it complies with CETA rules-of-origin requirements. The type of good is determined by using the combined nomenclature, which uses the Harmonized Commodity Description and Coding System (HS) along with additional subdivisions that are in use within the EU. The way the CETA rules of origin are implemented in Canadian law and the HS system are discussed in greater detail in Chapter 5. The section below highlights the CETA rules of origin25 and how they apply to goods going from Canada to the EU. Rules of Origin under CETA Complex, globalized supply chains and varied production and assembly locations often make it difficult to establish where a product comes from. Rules of origin are significant because they will determine what tariff rates, if any, will apply to goods being imported into the EU or Canada. The CETA Protocol on Rules of Origin and Origin Procedures (Protocol) sets out how customs officials in the EU and Canada are to assess whether a product is "made in Canada'' or, for example, "made in France:' The Protocol simplifies the rules of origin as compared to other trade agreements. Some of CETA Chapter 6: Customs and Trade Facilitation CETA's customs and trade facilitation chapter26 aims to reduce transaction costs and increase efficiency of customs processes while ensuring national security is not compromised. To this end, the chapter includes provisions on transparency, release of goods, fees and charges, risk management, automation, and review and appeal processes. Pursuant to the transparency articles, the EU and Canada must publish online all regulations governing all customs matters and any changes, making it more accessible to exporters and importers. The release-of-goods process is simplified for low-value and low-risk goods, and all goods can be released at the first point of arrival in the importing country and without prior payment of duties and taxes. With low-risk or no-risk goods, exporters can provide advance electronic submission for cargo reporting, release, and entry and accounting, thus expediting the release and processing of shipments at customs. Pursuant to CETA, the EU and Canada will work toward coordinating their various agencies to centralize import and export data and document requirements and verifications in a single location. Both Canada and the EU ensure that all administrative actions and decisions made regarding the import of goods can be promptly reviewed by judicial, arbitral, or administrative tribunals. CETA Chapter 9: Trade in Services As discussed in Chapter 2, trade in services refers to the production, distribution, marketing, sale, and delivery of a service, including payment for and use of that service by a consumer across borders.28 The exchange is in intangible products, like advice or expertise. The services chapter in CETA reiterates Canada's and the EU's commitments to WTO's national treatment, MFN treatment, and market access rules. The EU is the largest importer of services in the world, and this chapter affords Canadian service providers the same treatment as local EU providers. Mining, energy, environmental, engineering, and other professional Canadian service sectors are likely to benefit greatly from CETA. Not all service sectors are included. The excluded service sectors encompass public services such as health; public education; the collection, purification, and distribution of water; and other social services, as well as cultural policies. This ensures that governments remain free to enact the policies and programs based on their priorities and objectives in these fields. The CETA market access obligation prohibits numerical limits on the number of service suppliers, the total value of services transactions or assets, the total number of service operations or the total quantity of service output, or the total number of natural persons who may be employed in a certain service sector. CETA Chapter 8: Investment Protection Direct investments by Canadian companies in the EU totalled $232 billion in 2016. In the same year, direct investments from European companies in Canada totalled $247 billion, representing 30 percent of total foreign investments in Canada. Although investment is distinct and separate from trade in goods or services, its economic importance to both Canada and the EU cannot be ignored. As such, CETA (like NAFTA) includes a separate, comprehensive chapter on investment protection29 that seeks to facilitate increased investment between Canada and the EU by giving investors greater market access, certainty, stability, transparency, and legal protection for their investments. To achieve these goals, CETA's investment chapter outlines broad market access, national treatment and MFN provisions, and creates a new dispute-resolution tribunal to address disputes arising between foreign investors and the states. The provisions regarding establishment of investments prohibit Canada and the EU from applying unjustified barriers on the entry into their markets of new investments. Specifically, measures may not be adopted or maintained that restrict the number of enterprises that may carry out an economic activity, the total value of transactions or assets, the number of operations or the total quantity of output, or the number of individuals that may be employed in a particular sector. Additionally, the market access article specifies limits to government requirements that restrict the forms of legal entity an enterprise may take, such as a requirement for a joint venture or the participation of foreign equity. The non-discrimination section requires Canada and the EU to treat each other's investors no less favourably than they treat any other investor in their territory. The investment protection section grants investors protection from illegitimate government actions, such as denial of justice or of due process, or illegal expropriation. The reservations and exceptions section codifies the ability of governments to act in the public interest when regulating in areas such as health, safety, and the environment, as well as other sensitive policy areas, such as Indigenous affairs. Additionally, CETA created an independent and transparent institutionalized dispute-settlement tribunal, revised the process for selecting tribunal members, set out additional ethical requirements for tribunal members, and provided for a unique appeal process and a robust enforcement mechanism. The dispute-resolution system affords investors recourse to compensation when there is evidence that an EU host state has breached its obligations, including those prohibiting discrimination or expropriation, and that the investor has suffered losses as a result. CETA Chapter 19: Government Procurement Canadian federal, provincial, and municipal governments and their EU counterparts purchase goods and services domestically and abroad. Goods and services will be sourced, usually through a public tendering process for government projects at any level, whether for the construction of a school or a new highway. The EU's impressive $3.3 trillion per year in government purchasing activity affords significant potential market opportunities to Canadian companies to bid on EU projects. CETA expands on the WTO's Agreement on Government Procurement (GPA)JO rules and opens greater market-access opportunities for Canadian and EU suppliers across all levels of governments. Businesses benefit from rules regarding non-discrimination, impartiality, and transparency in their procurement activities. Canadian and EU businesses can rest assured that they are competing on an equal footing in another party's government procurement markets when they bid on opportunities covered by CETA. It is the first time Canadian businesses have guaranteed and secure access to opportunities to supply their goods and services to EU regional and local governments as well as a wide range of entities operating in the utilities sector. To determine if CETA applies to a particular procurement activity at any level of government, EU and Canadian suppliers must refer to CETA annexes. The applicable contract values at which CETA obligations are triggered are also specified in the annexes and range from $237,700 for goods to $9,221,026 for construction services.31 These procurement thresholds are consistent with those that Canada applies in the WTO GPA. CETA also provides additional provisions on topics including bidding timeframes, the registration process, screening, and supplier eligibility. CETA Provisionally in Force CETA is a comprehensive agreement, and some of its subject matter falls under both EU and member states competencies. As such, it is considered a "mixed agreement"; EU institutions alone cannot sign on behalf of all members on all issues. In order for the agreement to be fully applied, it must be ratified by both the European Parliament and every single EU member state.32 All member states have signed the agreement, allowing it to be provisionally applied and, as at the time of writing, 13 members have completed the ratification process, leaving 15 who still need to do so.33 Approximately 90 percent of the agreement already applies and benefits companies in Canada and the EU. Areas that are not yet in force but will be following full ratification are ? investment protection, ? investment market access for portfolio investment, and ? the investment court system. CETA rules are implemented across the EU. However, they are not the only relevant legal provisions that will govern business transactions between Canadian and EU businesses. The section below explores additional laws that Canadian businesses need to be aware of when doing business within the EU and with EU companies.CETA and Canadian Business The EU Commission negotiated CETA, with oversight from the EU Parliament and the Council, on behalf of its 28 member states. The Canadian federal government together with representatives from the provinces and territories were involved in the negotiations from Canada's side. Following seven years of negotiations, CETA was signed on October 30, 2016, and entered into force provisionally on September 21, 2017. CETA is a landmark agreement meant to boost trade between Canada and the EU; diversify Canada's exports and investments; and promote labour rights, environmental protection, and sustainable development. It represents tremendous opportunities for business on either side of the Atlantic. The following sections discuss what CETA is, what it covers, how it impacts businesses, and what "provisionally in force" means. WhatCETA/s CETA is a trade deal between the EU and Canada that establishes a free trade area in conformity with Article XXIV of GATT 1994 and Article V of the GATS. However, it is more elaborate than a simple agreement to eliminate all tariffs, since it encompasses the majority of economic issues between Canada and the EU. CETA is divided into thirty chapters and two protocols, as well as a number of annexes, and covers issues relating to trade in goods, services, trade remedies, sanitary and phytosanitary measures, investment, e-commerce, mutual recognition of professional qualifications, competition policies, subsidies, intellectual property, labour, the environment, and other matters. What CETA Covers With over 1,500 pages in the agreement and hundreds of pages in annexes and guides, CETA is truly a comprehensive agreement and covers most aspects of Canada- EU economic relations, all of which cannot be reviewed in this text. The aspects of CETA that will be discussed below are ? trade in goods, ? rules of origin, ? customs and trade facilitation, ? trade in services, ? investment protection, and ? government procurement.CETA Chapter 2: Trade in Goods Since the goal of any trade agreement is to spur trade, the existing tariffs and other trade barriers have to be removed. CETA removes 98 percent of duties, taxes, and other import fees on goods traded between the EU and Canada. An additional 1 percent will be phased out over a seven-year period. Prior to CETA, only 25 percent of EU tariff lines on Canadian goods were duty-free. This change will amount to approximately $880 million in saved duties per year once all the tariff reductions are in effect. 24 Since both Canada and the EU member countries are members of the WTO, CETA had to be drafted in conformity with all of the WTO agreements. In other words, the national treatment and MFN as well as other WTO rules are imbedded and expanded on in CETA and the EU, and Canadians can expect to trade in a non-discriminatory market for their goods and services. The EU is an economic and monetary union, and as such the member countries do not retain their own external tariffs. This means that Canadian goods are subject to the same duty-free treatment regardless of the country through which they enter the EU. Duty-free treatment is applied to goods entering the EU based on the type of good and whether it complies with CETA rules-of-origin requirements. The type of good is deterby using the combined nomenclature, which uses the Harmonized Commodity Description and Coding System (HS) along with additional subdivisions that are in use within the EU. The way the CETA rules of origin are implemented in Canadian law and the HS system are discussed in greater detail in Chapter 5. The section below highlights the CETA rules of origin25 and how they apply to goods going from Canada to the EU. Rules of Origin under CETA Complex, globalized supply chains and varied production and assembly locations often make it difficult to establish where a product comes from. Rules of origin are significant because they will determine what tariff rates, if any, will apply to goods being imported into the EU or Canada. The CETA Protocol on Rules of Origin and Origin Procedures (Protocol) sets out how customs officials in the EU and Canada are to assess whether a product is "made in Canada'' or, for example, "made in France:' The Protocol simplifies the rules of origin as compared to other trade agreements. Some of CETA's more salient rules of origin are summarized in Box 4.4. CETA Chapter 6: Customs and Trade Facilitation CETA's customs and trade facilitation chapter26 aims to reduce transaction costs and increase efficiency of customs processes while ensuring national security is not compromised. To this end, the chapter includes provisions on transparency, release of goods, fees and charges, risk management, automation, and review and appeal processes. Pursuant to the transparency articles, the EU and Canada must publish online all regulations governing all customs matters and any changes, making it more accessible to exporters and importers. BOX 4.4 CETA Rules of Origin The release-of-goods process is simplified for low-value and low-risk goods, and all goods can be released at the first point of arrival in the importing country and without prior payment of duties and taxes. With low-risk or no-risk goods, exporters can provide advance electronic sub mission for cargo reporting, release, and entry and accounting, thus expediting the release and processing of shipments at customs. Pursuant to CETA, the EU and Canada will work toward coordinating their various agencies to centralize import and export data and document requirements and verifications in a single location. Both Canada and the EU ensure that all administrative actions and decisions made regarding the import of goods can be promptly reviewed by judicial, arbitral, or administrative tribunals. CETA Chapter 9: Trade in Services As discussed in Chapter 2, trade in services refers to the production, distribution, marketing, sale, and delivery of a service, including payment for and use of that service by a consumer across borders.28 The exchange is in intangible products, like advice or expertise. The services chapter in CETA reiterates Canada's and the EU's commitments to WTO's national treatment, MFN treatment, and market access rules. The EU is the largest importer of services in the world, and this chapter affords Canadian service providers the same treatment as local EU providers. Mining, energy, environmental, engineering, and other professional Canadian service sectors are likely to benefit greatly from CETA. Not all service sectors are included. The excluded service sectors encompass public services such as health; public education; the collection, purification, and distribution of water; and other social services, as well as cultural policies. This ensures that governments remain free to enact the policies and programs based on their priorities and objectives in these fields. The CETA market access obligation prohibits numerical limits on the number of service suppliers, the total value of services transactions or assets, the total number of service operations or the total quantity of service output, or the total number of natural persons who may be employed in a certain service sector. CETA Chapter 8: Investment Protection Direct investments by Canadian companies in the EU totalled $232 billion in 2016. In the same year, direct investments from European companies in Canada totalled $247 billion, representing 30 percent of total foreign investments in Canada. Although investment is distinct and separate from trade in goods or services, its economic importance to both Canada and the EU cannot be ignored. As such, CETA (like NAFTA) includes a separate, comprehensive chapter on investment protection29 that seeks to facilitate increased investment between Canada and the EU by giving investors greater market access, certainty, stability, transparency, and legal protection for their. Investments.To achieve these goals, CETA's investment chapter outlines broad market access, national treatment and MFN provisions, and creates a new dispute-resolution tribunal to address disputes arising between foreign investors and the states. The provisions regarding establishment of investments prohibit Canada and the EU from applying unjustified barriers on the entry into their markets of new investments. Specifically, measures may not be adopted or maintained that restrict the number of enterprises that may carry out an economic activity, the total value of transactions or assets, the number of operations or the total quantity of output, or the number of individuals that may be employed in a particular sector. Additionally, the market access article specifies limits to government requirements that restrict the forms of legal entity an enterprise may take, such as a requirement for a joint venture or the participation of foreign equity. The non-discrimination section requires Canada and the EU to treat each other's investors no less favourably than they treat any other investor in their territory. The investment protection section grants investors protection from illegitimate government actions, such as denial of jus tice or of due process, or illegal expropriation. The reservations and exceptions section codifies the ability of governments to act in the public interest when regulating in areas such as health, safety, and the environment, as well as other sensitive policy areas, such as Indigenous affairs. Additionally, CETA created an independent and transparent institutionalized dispute-settlement tribunal, revised the process for selecting tribunal members, set out additional ethical requirements for tribunal members, and provided for a unique appeal process and a robust enforcement mechanism. The dispute-resolution system affords investors recourse to compensation when there is evidence that an EU host state has breached its obligations, including those prohibiting discrimination or expropriation, and that the investor has suffered losses as a result. CETA Chapter 19: Government Procurement Canadian federal, provincial, and municipal governments and their EU counterparts purchase goods and services domestically and abroad. Goods and services will be sourced, usually through a public tendering process for government projects at any level, whether for the construction of a school or a new highway. The EU's impressive $3.3 trillion per year in government purchasing activity affords significant potential market opportunities to Canadian companies to bid on EU projects. CETA expands on the WTO's Agreement on Government Procurement (GPA)JO rules and opens greater market-access opportunities for Canadian and EU suppliers across all levels of governments. Businesses benefit from rules regarding non-discrimination, impartiality, and transparency in their procurement activities. Canadian and EU businesses can rest assured that they are competing on an equal footing in another party's government procurement markets when they bid on opportunities covered by CETA. It is the first time Canadian businesses have guaranteed and secure access to opportunities to supply their goods and services to EU regional and local governments as well as a wide range of entities operating in the utilities sector. To determine if CETA applies to a particular procurement activity at any level of government, EU and Canadian suppliers must refer to CETA annexes. The applicable contract values at which CETA obligations are triggered are also specified in the annexes and range from $237,700 for goods to $9,221,026 for construction services.31 These procurement thresholds are consistent with those that Canada applies in the WTO GPA. CETA also provides additional provisions on topics including bidding timeframes, the registration process, screening, and supplier eligibility. CETA Provisionally in Force CETA is a comprehensive agreement, and some of its subject matter falls under both EU and member states competencies. As such, it is considered a "mixed agreement"; EU institutions alone cannot sign on behalf of all members on all issues. In order for the agreement to be fully applied, it must be ratified by both the European Parliament and every single EU member state.32 All member states have signed the agreement, allowing it to be provisionally applied and, as at the time of writing, 13 members have completed the ratification process, leaving 15 who still need to do so.33 Approximately 90 percent of the agreement already applies and benefits companies in Canada and the EU. Areas that are not yet in force but will be following full ratification are ? investment protection, ? investment market access for portfolio investment, and ? the investment court system. CETA rules are implemented across the EU. However, they are not the only relevant legal provisions that will govern business transactions between Canadian and EU businesses. The section below explores additional laws that Canadian businesses need to be aware of when doing business within the EU and with EU companies.

What are the main criticisms of investor-state arbitration? Have these criticisms been adequately dealt with under the Comprehensive Economic and Trade Agreement (CETA) and its investment Court System