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Comprehensive Economic and Trade Agreement between the EU and Canada (CETA)

© fotolia. Possible overperfomers in stock market (stoxx600 index) derived from patent activities of the companies.

CETA in general

CETA will bring opportunities to different branches in Canada and to the European Union. Studies[1] expect for Canada a boost in the field of raw materials like ore mining (Gold, Silver, non-ferrous, copper, nickel, lead etc.), in the food market (beef, pork, soybean, fish, seafood, corn, wheat etc.) while for Europe manufacturers of pharmaceuticals, medicine, engines, vehicles, machineries will receive benefits from CETA.

Canada is a strong trade and investment partner for the European Union, a fact which is reflected throughout the agreement. CETA should unleash opportunities for both sides by liberalising markets and enhancing cooperation while reducing the costs of business transactions. Since small and medium-sized enterprises (SMEs) are more sensitive to transaction costs, CETA should be of particular benefit for this business group[2].

All products traded between the EU and Canada will profit from CETA, as customs tariffs on nearly 99% of all tariff lines on both sides will ultimately be liberalised.

Therefore it is uncertain, which companies will have higher benefits due CETA.

The branches which will have in general higher benefits due CETA can be defined by those which have the highest value on imported goods to Canada[3]:

Description of the basic idea - Methodology

The basic idea of this study is to identify companies from EU which have a high relative innovation strength and prepare themselves for increasing their business in Canada.

This will be expressed in 2 ways:

  1. The amount on patents is increasing disproportionate in Canada (compared to amount in their home market which is Europe)

  2. The IP value shows a significant increase (applications and grants) in Canada (compared to the IP value in their home market which is Europe)

Both indicators are expressing a self assessment of the companies and their expectations for the Canadian market. This means that they have either a relevant a market share for their products in Canada and expect to increase their business or they are still increasing their activities.

The IP value is determined by an innovative approach of InTraCoM which is based on a pattern recognition algorithm on bibliometric data from patents. The methodology is temper proof in over 100 patent valuation projects with commercial clients as well as legal authorities and has a pending patent[4] in Europe and USA.

Samples of the rating – Healthcare companies

From Stoxx600 index the life science companies were analysed regarding the change of patent applications and grants for Europe and for Canada, and the change of the value of those patents in Europe and for Canada.

Further the change of the total IP value divided through the total assets was determined in order to identify an increasing or decreasing patent activity.

The analysis was performed for the years 2010 to 2016.

The results of the most beneficiary European companies are shown in the graph at the next page.

Analysis of European companies:

From the 33 stocks in total only 7 have clear advantages for the Canadian market:









They are clear overperforming in the amount on patents for Canada compared with the activities in their home market which is Europe, and the IP value is as well overperforming. Further the total IP value divided through the total assets is rising, this means that the overall patent activities of the company are increasing.

The clear underperformers derived from their own IP statement (patent activity in CA) for the Canadian market are: