The trade agreement between Europe and Canada, which could be effective in 2017, offers opportunities for French SMES. It is still necessary to explore thoroughly the opportunities offered by the text… and the local market.

Olivier Tourrette’s not cold in the eyes. A month after a first exploration trip to Canada, the head of the company alsatian has already created a subsidiary in Montreal and planned its installation across the Atlantic for July 2016! A week, last April, in the framework of a mission organized by Business France, the patron of the Bell at Cheese, an SME forty employees specializing in the valuation of the cheese’s terroir, has continued nearly twenty appointments, and put the basket to his false ideas of the local market.

“The Canadians are seekers of fine cheeses and original, and, contrary to what you might believe, they are not opposed to the raw milk. They are open, they travel a lot and they like to eat.We export our products and our know-how!” says he, enthusiastically. Back in France, Olivier Tourrette has not been very long to make his decision; the realization has been even more rapid: two emails, a phone call, and $ 2000 in lawyer fees, and the canadian subsidiary was in place!

An adventure to try

This is a family business, born out there is a little more than twenty years in Strasbourg, ready to try in Canada the adventure he has succeeded in France: from a restaurant of cheeses, René Tourrette and his son, Olivier, has developed shops, a cellar refining, and even training courses for professionals. Their ambition? Promote a culture of cheese making, from production to consumption. The proposed canadian Olivier was not a whim: the young patron intends to take advantage of the future free trade agreement between the European Union and Canada, which will, in particular, to increase the volume of export quotas exempt from customs duties in the dairy products. “Some of these quotas will be reserved for newcomers,” he says. A condition to justify an existing presence on site.”

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Malignant, Olivier Tourrette had researched the details of the agreement on the website of the embassy of France… in Washington! Not easy indeed to see clear on this text of 1500 pages, curly in the summer of 2014 by the negotiators of the european Union and Canada. Baptized CETA (comprehensive economic and trade Agreement) or AACC English (Comprehensive economic and trade agreement), it should not enter into force before 2017 at best. But it will change radically in the exchanges between the Old Continent and Canada, including to our businesses: the european Union is the 2nd largest exporter in Canada, after the United States.

As for France, it is the third european commercial partner of Canada, with € 5.5 billion of exports and $ 5.1 billion of imports of goods and services in 2013. “Beyond the liberalization of tariffs, which could sometimes reach up to 20% of the value of the products, this agreement includes two major advances, recalls Pierre-Marc Johnson, chief negotiator for Quebec. It relaxes the rules of acquisition in Canada for european companies and it opens up very widely to access our public markets, which account for approximately 120 billion dollars of business volume per year.”

“Never a free-trade agreement did not go as far, confirms a great patron of the canadian, a little anxious to see the debates around the future treaty between Europe and the United States disrupt the finalization of the CETA. It was pretty obvious to us: the Europeans have built Canada, our values are your values.” With this agreement new generation, far more ambitious than the Nafta entered into twenty-year time between Canada and its neighbors, the u.s. and mexican companies should benefit from a higher degree of legal security.

Pierre-Marc Johnson, former Premier of Quebec, became counsel to the firm of Lavery, to Montreal, the race is on: “european SMES need to be prepared in upstream, find local partners to export their products, their services and their know-how.” They have two years in front of them. The agreement should be in effect before any benefit small and medium-sized enterprises. The heavy weight of the Paris Areva, Air Liquide, L’oréal, Sanofi, Sodexo,Vinci, etc – are all already well established in Canada. Family-owned companies such as Bel, Bonduelle, and FleuryMichon in the food or Servier in the pharmacy have not waited for the treaty to invest in the country of the maple leaf.

the arrival of The SMES, on the other hand, is more recent. The prospect of the liberalization of trade is not foreign. “Last year, my office has created a thirty subsidiaries of French companies in Canada, tells the story of the Norman Royal, a lawyer with Miller Thomson. In the first quarter of this year, we have already mounted the four. In the past few months, we are seeing more industrial companies to be made manifest.” The many missions organized by Business France, for SMES of different sectors – food, aerospace, energy, new technologies facilitate the awareness… and contacts. And not only in Quebec, the destination of “natural” entrepreneurs traffic in search of a local presence.

A market full

“For the past eighteen months, I see more French investments in Ontario, note Christophe Gautier, associate&comte; at PWC Canada. Tax incentives are a facilitator but this is not the trigger.” If Canada appears as a natural gateway to the United States, it is also beginning to be perceived as an interesting market by itself: “It is a set of 35 million people, who are big consumers,” stresses Constance Nervet at Amaris Consulting in Toronto. “The French have the know-how that the Canadians do not have,” says Norman Royal. For example, in the environment and public works. The key to success is to have a product that does not exist on the local market. Often, the French have!”

Spirits, cosmetics, textiles, water treatment, software, areas in which the French excel is sought. For the moment, it is mainly the SMES of the agri-food industry which is most active. “We are seeing a real thrill, writes Christophe Gautier. More partnership projects or acquisitions are in discussion.” Thus, the group marseille Marbour, specialized in the agri-food, has just offered the main producer of canadian rice, MRRM, a family-owned company listed on the Toronto stock exchange, of which he has taken over 100% of the shares. On his side, Alsace Milk comes to enter the capital of quebec society, Chalifoux. “The CETA, it is an important signal for companies: there will be more fluidity in the movement of goods, capital, and labor,” says Gregory Larroque, counsel in the firm McCarthy Tétrault, in which work Jean Charest, former Premier of Quebec who had a wet shirt to convince Canadians and Europeans embarking on the negotiation of a free trade agreement.

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To prepare for the best, the experts are unanimous: it is necessary to come on-site, understand the market, and then seek partners, prior to getting started. The most difficult is to decode the mores of local. Because for this which is to create a subsidiary, nothing more simple as recalled by Norman Royal: “We talk today, tomorrow you have your tax numbers, and the day after tomorrow, you’re in business!” Like Olivier Tourrette, already looking for a local in Montreal, to its future boutique cheese tasting.