What is CETA, the EU-Canada trade deal, and why is it in limbo?

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.

ADVERTISEMENT

ADVERTISEMENT

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.