EU-Canada Comprehensive Economic and Trade Agreement (CETA)

The European Union and Canada last week unveiled plans for an ambitious new partnership that could eventually give Canada a form of associate EU membership. Yet their existing landmark agreement remains unfinished business.

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The Comprehensive Economic and Trade Agreement (CETA) was signed in 2016 and has applied provisionally since 2017, removing almost all tariffs and helping drive a sharp increase in transatlantic trade. But ten EU countries – Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Italy, Poland and Slovenia – have still not ratified it.

The contrast was underlined last week when European Commission President Ursula von der Leyen invited Canada to deepen its economic and security ties with the bloc.

“We will move from CETA to an Alliance for the Future to create a common prosperity and economic security space,” von der Leyen told MEPs and Canadian Prime Minister Mark Carney in Strasbourg.

Despite not being fully ratified, the deal provisionally entered into force in 2017.

But what is CETA and why is its ratification blocked?

What is in the EU-Canada trade agreement?

CETA was concluded in 2016 after seven years of negotiations and often heated debate across EU member states.

The agreement removed tariffs on 98% of goods traded between the EU and Canada, covering products ranging from wine and cars to chemicals. It also opened up more of the Canadian market to European companies in sectors including financial services, telecommunications and transport.

The Commission says the agreement boosted EU-Canada bilateral trade in goods and services by 80% in 2025 compared to 2016, when CETA was signed, reaching €130 billion, up from €72.1 billion recorded nine years before. The EU has a trade surplus of €16 billion in goods and €9,7 billion in services.

For agricultural products, it allows 143 European products with the status of geographical indications (GIs) to be sold in Canada, protecting them from imitation. The deal also includes quotas for EU cheese exported to Canada (32,000 tonnes per year), Canadian beef (50,000 tonnes) and pork (80,000 tonnes) to the EU. It also bans imports of Canadian products containing prohibited substances, such as growth hormones.

Only 3% of the beef quotas were filled between 2021 and 2023, due to the EU’s Sanitary and Phytosanitary (SPS) rules, which make it costly for Canadian beef producers to export, according to a Commission assessment.

Why is the ratification blocked?

Concerns over food safety and environmental standards are among the reasons CETA has faced resistance in EU countries. European farmers have also raised concerns about unfair competition from Canadian products, arguing that some of Canada’s production rules are less stringent than those in the EU.

CETA opponents also criticised the deal’s Investor-State Dispute Settlement provisions. Those let companies bring a claim against the state before an arbitration tribunal if its government adopts a law that discriminates against a company and harms its profits. The tribunals were ad hoc, composed of private arbitrators.

However, controversies around a system that might favour business lobbies led the Commission to include safeguards and replace the Investor-State Dispute Settlement mechanism with an Investment Court System with permanent judges and an appeal mechanism. The EU and Canada have also introduced provisions to safeguard their right to regulate policies aiming to protect public health and safety, the environment or social protection. But opponents say that the safeguards won’t be enough to protect such policies. It is planned that the courts will only come into force once the deal is ratified by all 27 member states.

When will the EU fully ratify the deal?

There is no clear timetable, not least because the ratification process is effectively blocked in several member states.

For instance, in France, the Senate rejected the deal in 2024, and the government then blocked its submission to the National Assembly, fearing a full rejection.

In Poland, the ratification process is also frozen, as well as in Italy, where it has been blocked since the government rejected it in 2018, considering Italian GIs were not given enough protection. Italian MEP Carlo Fidanza, from the Brothers of Italy party, recently said that there were few chances the deal would be submitted to parliament before the December 2027 elections.

European Commission President Ursula von der Leyen announced on Wednesday that Canada has been invited to become the first “associate member” of the EU.

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She announced the move during her 2026 State of the Union address in Strasbourg, to an audience including not only MEPs but also Canadian Prime Minister Mark Carney, who attended her speech in the midst of a trade war with the US.

Since late August, the Canadians have been pushing hard for the Europeans to build a closer relationship with them, though full EU membership is not an option as Canada is not a European state.

During her speech before the MEPs on Wednesday, von der Leyen invited the country to become “the first associate member of the European Union”.

“We share one ocean, one set of values, one way of seeing the world. And we will now build our shared future as well,” she added.

A new status

Expectations had been high over the last week after Carney spoke about building a “unique alliance” with the EU.

Canada is not a European state geographically, but it shares the same values as the EU – human rights, democracy, rule of law – which are necessary criteria for becoming a member state.

Several options already exist for countries that don’t have full membership. Norway, for instance, is part of the single market, the EU’s borderless area of free movement of goods, persons, services and capital. Oslo and Brussels also collaborate on joint defence initiatives.

Switzerland also has access to the single market through several agreements – and in the years since Brexit, the United Kingdom and the EU have secured the largest and broadest trade and cooperation deal in the bloc’s history, coverering a wide range of sectors. The UK is now taking part in several EU programmes such as Horizon Europe, the EU’s research and innovation programme.

Euronews has learned that Ottawa is already in talks with Brussels to join the Erasmus+ exchange program, Horizon Europe research grants, and mutual recognition of workers’ qualifications.

However, “associate member” is a completely new status, and key questions have not yet been answered – chief among them, whether Canada will have voting rights in EU institutions. Despite their regulatory harmonisation with the bloc, Norway and Switzerland have no say on EU legislation.

A new alliance with Ottawa

German Chancellor Friedrich Merz floated the idea last May of an “associate membership” for Ukraine, which is urgently seeking to enter the EU. In a letter sent to EU leaders, he argued that this status would grant Ukraine access to the decision-making bodies – the European Council, the European Commission and the European Parliament – without voting rights or a dedicated portfolio.

It would also allow the country to tap into certain EU-funded programmes on a “step-by-step” basis.

It’s hard to see Canada in the same category as Ukraine, a country which is at war, but von der Leyen’s announcement on Wednesday nonetheless sent a strong political signal in a volatile world where historical alliances are shifting.

“Europe and Canada believe in democracy. That power does not belong to the strongest, the richest, or the loudest – but to all of us,” she said. “Democracies have the freedom to choose with whom to work.”

She also called for a new alliance with Ottawa, which could include tech, defence, Arctic joint projects, but also energy, critical minerals and artificial intelligence.

“We will move from CETA to an Alliance for the Future to create a common prosperity and economic security space,” she said, referring to the 2016 EU-Canada trade agreement that removed tariff barriers between both sides and has been provisionally applied.

The economic and security cooperation between both partners is set to be pushed further during a summit in Montreal in October.