Italy-Canada agri-food trade under the Comprehensive Economic Trade Agreement: the case study of Italian Food Canada Inc.

Abstract

The Comprehensive and Economic Trade Agreement (CETA) provided the opportunity to European Union and Canada to benefit from mutual trade. It is based on the idea of creating a market free from barriers and tariffs, facilitating business relationships between the two global actors. The cooperation between Canada and EU is key in order for both to foster their economies. The dissertation aims at introducing CETA and its application in real business case. It defines the Agreement, starting with an overview of the circumstances in which its negotiations were initiated with a brief background of trade relations between Canada and the EU throughout history; It will be focused on its development and implementation, demonstrating how it can be considered a “modern” agreement for the 21st century era. It explores the effects that CETA had on trade of goods, services and foreign investment, providing numbers and graphs aimed at giving a clear overview of the concrete benefits of its implementation. The application of CETA will be exemplified through a more in-depth analysis of the agricultural and agri-food sector, defining the rules regulating it and standards of import and export for both Canadian and EU market. The analysis identifies impacts that CETA had on the agricultural and agri-food industry, while pointing out current challenges and specifications. The agri-food market has been experiencing challenges in the last decade, due to different external and internal pressures. As a consequence, even agri-food trade under an economic agreement has been affected. Harvesting issues along with changes in consumers’ nutritional habits and higher attention on sustainability questioned the current CETA provisions. Worldwide trade of agri-food products is affected by domestic and international issues along the supply chain, impacting production, distribution and consumption of agricultural goods. As a consequence, EU, especially Italy, and Canada agri-food trade is subject to a progressive change towards the implementation of sustainable practice to more efficiently manage the exchange of these products. Hence, there is a growing interest in initiating new negotiations to foster agri-food trade on both sides of CETA involved parties. The text will then introduce the study of the case of Italian Food Canada Inc, a Canadian subsidiary of Coop Italian Food which works as an affiliate of Coop Italia. It highlights the process of doing business in an overseas country and all the difficulties it carries, as well as analyzing the role of CETA in such market. It then provides insights on import and export activities between the two regions concluding with a study on the competitive advantage that the agreement provides. The case study gives a concrete example of the exploitation of the CETA agreement from Coop Italia, the largest food cooperative of Italy, for the creation of a Canadian subsidiary, Italian Food Canada. The brand-new company based in Toronto takes advantage of the benefit provided by the agreement and aims at providing Canadian consumers with authentic Italian food, fulfilling an unmatched need of Italian food products at affordable prices, guaranteeing high-quality standards. Italian Food Canada can count on the well-established supply chain provided by Coop Italia, which translates in a net of producers and manufacturers, agencies for food standards compliance and operations management for shipments. The future of the company is still subject to a marginal level of uncertainty, but IFC has a long way ahead to make improvements. The existence of CETA facilitated the choice of entering a foreign market and it is plausible to think other businesses will follow the same path, even though it is still crucial to take into consideration the challenges that may arise as a consequence of doing business and developing a supply chain overseas.