A study published today found that the EU-Canada Comprehensive Economic and Trade Agreement (CETA) has boosted trade exports and diversified supply chains across all EU Member States. The study – conducted by independent experts, as part of the Commissions commitment to evidence-based policy making – provides solid proof that open, rules-based, predictable, and cooperative trade works.
Direct benefits from CETA since its provisional application began in 2017 include a 71% increase in bilateral trade in goods and services between the EU and Canada (from €72.2 billion in 2016 to €123 billion in 2023); a 64% increase in EU goods exports and an 81% increase in EU services exports to Canada[1]; and an increase in the EUs gross domestic product (GDP), which has grown €3.2 billion higher each year (€1.3 billion each year for Canadas GDP).
Small and medium-sized enterprises (SMEs) have particularly benefitted, with the number of EU SMEs exporting to Canada growing faster (20.3%) than larger companies (13.8%).
CETA has also encouraged EU-Canadian cooperation on critical raw materials, according to the study, enhancing the security of critical materials supply for both partners. Moreover, because of the Agreements ambitious opening of the Canadian procurement market to EU bidders, the value of procurement, meaning the value of government contracts available to EU companies in Canada, is 8.4% higher with CETA.
The social impacts of CETA have also been positive: it has increased real wages by 0.02% in the EU and 0.1% in Canada. CETA has also boosted trade in environmental goods (+12%) and services (+46%), reflecting increased demand for green technologies.
Room for Growth
The study identifies areas where more could be done to further strengthen the trade relationship between the EU and Canada. With CETA ratification ongoing in the EU, provisions on investment protection are not yet in place. The study finds that this hampers, for example, investment in the extraction of raw materials, for which investment protection makes a real difference. Furthermore, the study highlights the need to enhance the e-commerce provisions in CETA to better reflect the rapid evolution of the digital economy and unlock its full potential.
Next Steps
The Commission will now examine the study in detail. Its own conclusions will then be presented in the form of a Staff Working Document, including proposals for next steps to maximize the EUs trading relationship with Canada.
Background
The Commission launched an ex-post evaluation of the provisional application of CETA in 2023, five years after the Agreements provisional entry into application. This evaluation is undertaken as part of the Commissions commitment to evidence-based policy making under the Better Regulation policy. As part of the evaluation, the Commission requested a study from independent experts to assess the implementation and impact of CETA.
The study published today examines the economic, social, environmental, and human rights effects of the agreement on both parties. It also includes an institutional analysis and an evaluation of stakeholder concerns. Extensive stakeholder consultations were therefore conducted across the EU and Canada.
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