With CETA, the EU and Canada have increased bilateral trade by more than 70 per cent

Brussels – Between the two sides of the Atlantic, not everything goes wrong. From Brussels, just look a thousand kilometres north of Washington, in Ottawa. According to a study published today (16 June) by the European Commission, eight years after the start of the provisional application of the Comprehensive Economic and Trade Agreement (CETA), bilateral trade in goods and services between the EU and Canada has increased by 71 per cent.

From €72.2 billion in 2016 to €123 billion in 2023. To the benefit of both, but with the EU boasting a trade surplus of € 20 billion in goods and € 6 billion in services. In particular, the export of services—especially travel, transport, telecommunications, IT, and information—from the EU to Canada skyrocketed, registering an increase of 81 per cent. Exports of goods from the EU bloc increased by 64 per cent in parallel.

Trade volumes between the two partners, it must be said, were already on the rise before the then-controversial negotiations led by the European Commission were concluded. At the time, one of the main concerns was that the removal of customs barriers would put small European companies, especially those in the agricultural sector, at risk of being wiped out. Instead, the Brussels study would show that SMEs have “particularly benefited” from CETA in these early years. The number of European SMEs exporting to Canada has increased by about 20 per cent.

In total, the specific weight of CETA on the EU’s gross domestic product is €3.2 billion per year. Conversely, Canada increases its GDP by €1.3 billion per year through the implementation of the agreement. Not least because CETA is the precursor to a series of other agreements aimed at strengthening cooperation, including the partnership on critical materials signed in 2021, the Green Alliance, and the digital partnership in 2023. The study also estimated the social impact of CETA to be positive: it would have increased real wages by 0.02 per cent in the Old Continent and by 0.1 per cent in Canada.

Yet, “more could be done”. Ten member states—Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Italy, Poland, and Slovenia—have not yet ratified the agreement, whose application therefore remains only partial. “This hampers, for example, investments in the extraction of raw materials, for which investment protection really makes a difference,” the European Commission points out. The legal and contractual measures to protect investors in the agreement will not take effect until all 27 national parliaments have given their approval.

A scenario that could play out again with another trade agreement, at least as contested, that the EU has just concluded a few thousand kilometres south of Ottawa. The agreement with the Mercosur countries—Brazil, Argentina, Uruguay, and Paraguay—would open the door to a market of over 700 million consumers. But against which a group of member states, led by France, are threatening to fight back. The European Commission has not yet revealed the legal basis of the text, on which the ratification process depends. A mixed agreement, such as the one between the EU and Canada, requires the approval of both the EU Council, which must be unanimous, and the European Parliament, as well as ratifications in all national parliaments.

In light of the delays in ratifying CETA, the European Commission could draw its own conclusions and try to pass the new maxi-agreement off as a mere trade agreement, which would only require a qualified majority of EU capitals in favour.