Sejm passed a resolution on CETA

Sejm, the lower chamber of Polish parliament, passed a resolution concerning a trade agreement with Canada (CETA). The MPs accepted adding the provision saying that Sejm will ratify CETA with a 2/3 majority vote. 326 MPs voted in favour of the resolution. 90 were against, 11 abstained.

CETA (Comprehensive Economic and Trade Agreement) proposes the removal of almost all customs duties and non-tariff barriers as well as liberalisation of trade in services between the European Union and Canada. The agreement is to be concluded in October during an EU-Canada summit.

According to the supporters of the agreement, it will provide EU entrepreneurs with more solutions for conducting business activity in Canada, lead to the removal of customs duties, affect job creation in Europe. It will also allow to eliminate of the restrictions in access to public tenders and open up the services market.

EU negotiators ensure that the agreement entails full preservation of high EU standards in the areas such as food safety, labour rights and environment protection. Polish government counts on economic and business benefit as well, referring to the research ordered by the Ministry of Development. Still, the details are not known.

The opponents of the agreement with Canada warn that the deal is beneficial only for corporations on the both sides of the Atlantic and refer both to the analyses ordered by NGOs and the experiences related to NAFTA (USA-Canada-Mexico). They warn against the negative consequences for the labour market, especially in such countries as Poland.

They draw attention to the dangers for agricultural market and consumer market (lowering of standards) as well as job losses and the risk of falling benchmarks when it comes to environment protection. Among the arguments there is also the one regarding the presence of ICS mechanism (investor-state, previously ISDS) and absence of whatever debate on the agreement, which, as the European Commission finally agreed, is not only a trade agreement.

The critics say the acceptance of CETA by the Polish government is a purely political decision, not based on concrete economic arguments. And they remind that the agreement with Canada will push Europe into the sphere of influence of American corporations without the need to introduce TTIP, through the NAFTA agreement.

At the beginning of July, the European Commission formally proposed signing the agreement to the member states. Once this happens, and the agreement is passed by the European Parliament, it will be allowed to temporarily come into effect. Still, the final decision will depend on the national parliaments. Presumably, the ratification process in all EU states will take 2-3 years.

Temporary implementation of the agreement will apply only to trade relations. The investor part of the CETA agreement will be suspended until all member states accept it.

Canada is EU’s twelfth biggest trade partner. EU is Canada’s second biggest trade partner, after the United States. The trade of goods between EU and Canada is worth almost 60 billion euro a year, and between Poland and Canada around 1.1 billion euro.

Investment Outlook and Business Perspective

Poland remains one of the most attractive investment destinations in the European Union. With GDP exceeding EUR 650 billion, Poland is the sixth largest economy in the EU and the largest in Central and Eastern Europe. The country has maintained positive economic growth for over three decades, including through multiple global crises.

Foreign direct investment in Poland continues to grow, driven by the country’s strategic location, skilled workforce, EU membership, competitive costs, and improving infrastructure. Key sectors attracting investment include manufacturing, technology, business services, logistics, and financial services.

For investors considering entry into the Polish market, proper structuring of the investment vehicle is crucial. The choice between a sp. z o.o. (LLC), S.A. (joint-stock company), branch office, or joint venture depends on the investment size, sector, tax considerations, and long-term strategic objectives. Professional advisory can help optimize the structure from both operational and tax perspectives.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our VAT and tax advisory, or contact us for a free consultation.