OTTAWA—Canada’s goods exports are expected to grow by $1.4 billion by 2022 due to reduced tariffs through the Canada-European Union Comprehensive Economic and Trade Agreement, according to new Conference Board of Canada report. And the benefits are unlikely to end there.

“While the elimination of tariffs on goods is usually the most visible feature of any free trade agreement, it is only one part of CETA. Canadian industries and firms will get only modest benefits from the deal if they sit back and wait for lower tariffs to boost their sales,” said Danielle Goldfarb, associate director of the Global Commerce Centre, which produced the research for the report.

“The greater gains from CETA are likely to come from the reduction of non-tariff barriers and liberalization of services trade. Those companies that proactively innovate and adapt their offerings for the huge EU market will get much more out of the deal,” she added.

The report pointed to the fact that despite its recent economic troubles, including the deepening financial crisis in Greece, the EU is a more than $17-trillion market with high-income customers.

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Though Canadian companies already pay relatively low tariffs on exports to the EU, according to the Conference Board of Canada, tariffs remain high in sectors such as food, beverages and tobacco, motor vehicles and parts, agriculture, chemicals, rubber, as well as plastics. Not surprisingly, these sectors are expected to benefit the most from CETA.

Report Projections: