This paper introduces the Comprehensive Economic and Trade Agreement (CETA), which is a free trade agreement between the European Union and Canada. The agreement is currently undergoing the ratification process in both jurisdictions. The CETA is aimed at the removal of trade and non-trade barriers and regulatory issues among other things. Some of the topics are highly controversial mainly due to differing standards and norms of both partners. After a thorough introduction of the background of CETA as well as its content, the paper discusses possible impacts of the agreement on the market entry of German SMEs (Small and medium-sized enterprises) in Canada. Opportunities are evaluated for German SMEs. By reading this paper, the reader has the opportunity to inform himself/herself about CETA and to additionally form an opinion on the CETA based on the repercussions that affect German SMEs in the automotive industry presented in this paper. The paper finishes with a conclusion of the most important aspects of CETA
Table of Contents
1. Introduction
1.1 Definition of the Problem
1.2 Objective of the Thesis
1.3 Methodology
2. Small and Medium-Sized Enterprises
2.1 Definition
2.1.1 Quantitative Criteria
2.1.2 Qualitative Criteria
2.2 Strengths and weaknesses of SMEs
2.3 The macroeconomic relevance of SMEs
3. Internationalization of small and medium-sized Enterprises
3.1 The Trends towards internationalization
3.2 Motives and Objectives of internationalization
3.3 Barriers of internationalization
3.4 International Market Entry Modes
3.5 International activities of German SMEs
4. The comprehensive Economic and Trade Agreement
4.1 Structure of the Canada's Economy
4.1.1 Canada‘s Economy at Glance
4.1.2 German-Canadian Trade
4.1.3 Canada's foreign trade policy and agreements
4.2 Chronology of events and key milestones
4.3 Contents of the Agreement
5. Analysis of Impacts of CETA on the Market Entry in Canada for German SMEs
5.1 Exports
5.2 Contractual Agreements
5.3 Foreign Direct Investments
6. Conclusion
Objectives and Research Themes
This master thesis analyzes the Comprehensive Economic and Trade Agreement (CETA) and evaluates its implications for the market entry of German Small and Medium-Sized Enterprises (SMEs) into Canada, with a specific focus on the automotive industry.
- Macroeconomic significance of SMEs in the German economy.
- Barriers and drivers for the internationalization of SMEs.
- Strategic market entry modes for German SMEs in foreign markets.
- Analysis of CETA provisions regarding trade in goods, tariffs, and investments.
- Impact assessment of CETA on German SME competitiveness in Canada.
Excerpt from the Book
1.1 Definition of the Problem
Internationalization activities have a positive impact on companies’ development as well as on economic and employment growth. This phenomenon has shown a dynamic development in the last 20 years, the main drivers of which are the geo-political changes. This political breakthrough has led to a disproportionate growth in world trade. These changes have also presented challenges to Small and medium-sized enterprises, reflecting the close connection between the concept of SME and foreign trade. The globalization of the economy puts pressure on Small and medium-sized enterprises to rethink their business processes and value chains.
Small and medium-sized enterprises play a decisive role in international competition. They represent an important economic factor in Germany, as well as in Europe and therefore constitute drivers of economic growth, innovation and employment. They contribute significantly to the creation of jobs, encourage the entrepreneurial spirit and innovation in the EU, and thereby are essential triggers in the development of competitiveness and employment. For instance, in 2009, SMEs accounted for over 60% of the employment share in Germany. Moreover, nearly 36% of attained sales (which represented almost 45% of gross investments and over half of the generated gross value added of all enterprises in Germany) have been achieved by SMEs.
The current situation of SMEs in Germany has been a central concern of the public’s as well as an interest of the state authorities and scientists for years. This growing interest is justified by the significant economic importance of SMEs. This interest is also reflected in the increasing number of empirical studies dealing with SMEs issues.
Summary of Chapters
1. Introduction: Outlines the problem definition, the research objective regarding CETA's impact on German SMEs, and the methodological approach.
2. Small and Medium-Sized Enterprises: Defines SMEs using quantitative and qualitative criteria and discusses their strengths, weaknesses, and macroeconomic importance.
3. Internationalization of small and medium-sized Enterprises: Examines trends, motives, barriers, and various market entry modes utilized by German SMEs in their international expansion.
4. The comprehensive Economic and Trade Agreement: Provides an overview of Canada's economy, the history of CETA negotiations, and the core contents of the trade agreement.
5. Analysis of Impacts of CETA on the Market Entry in Canada for German SMEs: Evaluates how CETA's provisions on trade and investment specifically influence market access and strategy for German SMEs in Canada.
6. Conclusion: Summarizes the key findings and evaluates the benefits of CETA for German SMEs.
Keywords
CETA, German SMEs, Internationalization, Market Entry, Canada, European Union, Trade Agreement, Automotive Industry, Foreign Direct Investment, Tariffs, Customs, Economic Growth, Competitiveness, Business Strategy, Export.
Frequently Asked Questions
What is the fundamental focus of this thesis?
The thesis investigates the Comprehensive Economic and Trade Agreement (CETA) and assesses its specific impacts on German Small and Medium-Sized Enterprises (SMEs) entering the Canadian market.
What are the central thematic areas covered?
The work covers SME definitions, internationalization strategies, the structure of the Canadian economy, the specifics of CETA, and the practical implications for German automotive SMEs.
What is the primary research goal?
The goal is to determine the extent to which CETA enhances the market entry for German SMEs and to evaluate which market entry modes are best suited for these companies under the new agreement.
Which research methodology is applied?
The thesis utilizes a qualitative analytical approach, organizing the research into six sections that move from general SME theory to a detailed analysis of CETA provisions and their real-world application.
What is covered in the main body of the work?
The main body focuses on the characteristics of SMEs, the trends and barriers of internationalization, a detailed breakdown of CETA components (tariffs, rules of origin, investment protection), and an impact analysis on exports and investments.
Which keywords best characterize this work?
Key terms include CETA, SME internationalization, German-Canadian trade, foreign market entry, and automotive industry trade policies.
How does the Investment Canada Act interact with CETA for German SMEs?
CETA raises the threshold for investment review under the Investment Canada Act, reducing administrative hurdles for German SMEs and facilitating easier market access for foreign investments.
How does the "rules of origin" provision affect automotive parts exporters?
The rules of origin require a specific percentage of domestic content; CETA provides cumulative provisions that allow German SMEs to count components from other EU countries towards this threshold, favoring European-made products.
What role does the "Loser-pays-principle" play in the ISDS mechanism?
The principle provides greater security to investors and states by allocating procedural costs in arbitration cases, which is particularly beneficial for SMEs with limited financial resources.
- Quote paper
- Olivier Samo (Author), 2016, The comprehensive Economic and Trade Agreement (CETA), Munich, GRIN Verlag, https://www.grin.com/document/966870
