The CETA trade deal is supposed to involve only the EU and Canada, but Canada has already a trade deal with the USA and Mexico : I don't understand how this is possible. For example, if I own one company in Paris, one company in Toronto and one company in New York, I can sell my product to myself from Europe to Canada and then from Canada to the US (or all in reverse). How could any tariff apply in such a case ? (my product never crossed a "trade border", yet it moved freely from EU to USA )
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Similar question: http://economics.stackexchange.com/questions/14083/eu-canada-comprehensive-economic-and-trade-agreement – Matthias dirickx Nov 03 '16 at 23:27
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1An interesting topic is how rules of origin are cheated. http://belarusdigest.com/story/belarus-and-russian-food-embargo-success-story-23073 – snoram Nov 04 '16 at 17:24
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"Rules of origin" cover this. Try
- Wikipedia https://en.wikipedia.org/wiki/Rules_of_origin or
- WTO: https://www.wto.org/English/tratop_e/roi_e/roi_info_e.htm or
- EU: https://ec.europa.eu/taxation_customs/business/calculation-customs-duties/rules-origin_en or
- USA: http://2016.export.gov/FTA/nafta/eg_main_017791.asp
Essentially the rules tell someone trading between two places with a free trade agreement in which circumstances something partly originally imported from a third country (whether under another free trade agreement or having paid an original tariff) can be freely traded under the agreement
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