CETA evaluation shows strong economic and social benefits

A study published last June 16 has found the EU and Canada Comprehensive Economic and Trade Agreement (CETA) boosted trade exports and diversified supply chains across all EU Member States. The study – carried out by independent experts, as part of the Commission’s commitment to evidence-based policy making – provides solid proof that open, rules-based, predictable and cooperative trade works.

Direct benefits resulting from the CETA since the start of its provisional application 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 a 81% increase in EU services exports to Canada[1]; and an increased the EU’s gross domestic product (GDP), which has become €3.2 billion higher each year (€1.3 billion each year for Canada’s GDP).

Small and medium enterprises (SMEs) have particularly benefitted, with the number of EU SMEs exporting to Canada growing faster (20.3%) than the number of 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 Agreement’s 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 for making the most of the EU’s trading relationship with Canada.

Background

The Commission launched an ex-post evaluation of the provisional application of CETA in 2023, five years after the Agreement’s provisional entry into application. This evaluation is undertaken as part of the Commission’s 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.

More information: European Commission