While many companies are doing their best to increase their procurement, production and logistical security, two major world economies have recently pledged to do the same. The European Union and Canada reached an agreement that will ensure supply chain security and protect trade between both parties and companies relying on partners across the Atlantic for materials or manufacturing processes.
The EU and Canada already cooperate to ensure trade between the two runs as smoothly as possible for corporations procuring, manufacturing or shipping their products overseas and have had a customs agreement to aid international trade in place since 1998. However, the new proposal will take this existing policy a step further and increase the partnership between the two areas.
The recently reached agreement will enhance current regulations and serve to better protect all parties involved in the trade. The proposal will ensure commercial information requirements across the EU and Canada are in line with one another and work to guarantee the EU member states and Canada work together to employ better risk mitigation strategies and security practices. It will also help both areas begin to recognize the other's trade membership programs, including the EU Authorized Economic Operator (AEO) and Canada's Partners in Protection (PIP).
"In a globalized world with globalized trade, no country can ensure their security of their supply chain in isolation," said Algirdas Šemeta, EU commissioner responsible for customs. "International cooperation is essential to protect citizen' security while allowing the smooth flow of trade. This agreement with Canada will give us the tools to improve customs controls while cutting red tape for safe traders in both our territories."
The agreement's ratification process is expected to occur within several months.