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CETA promotes green trade between Canada and the EU

Since its provisional application on September 21, 2017, the Canada‑European Union (EU) Comprehensive Economic and Trade Agreement (CETA) has been beneficial for both trading partners. Through the elimination and reduction of trade barriers, CETA has promoted trade and increased opportunities for businesses and consumers in Canada and in the EU. Trade in goods grew steadily from 2016 to 2019, reaching a peak of €66.8 billion ($99.3 billion) in 2019, which was 27.0 percent higher than its level in 2016. Despite the global economic slowdown brought on by the COVID‑19 pandemic, bilateral merchandise trade was still 12.5 percent higher in 2020 than the pre‑CETA level in 2016. Bilateral trade in services also grew steadily between 2016 and 2019, rising 39.0 percent.Footnote 1

The EU is Canada’s second‑largest export market for cleantech products. CETA has created many opportunities for Canadian cleantech companies, over 85 percent of which are exporters. The Agreement puts Canadian exporters on par with their EU competitors and gives them an advantage over many of their non‑EU competitors by eliminating EU tariffs on Canada’s cleantech exports.

Furthermore, the growing concerns of climate change have led to strong growth in trade of environmental goods between Canada and the EU following the enactment of CETA.Footnote 2 Total trade in environmental goods amounted to €7.1 billion ($10.5 billion) in 2019, 17.2 percent higher than its level in 2016, when it was €6.1 billion ($8.9 billion). Canadian exports of environmental goods grew 23.0 percent from €1.3 billion ($1.9 billion) in 2016 to €1.6 billion ($2.4 billion) in 2019, while EU exports reached €5.5 billion ($8.2 billion) in 2019, up 15.8 percent from €4.8 billion ($7.0 billion) in 2016. In particular, trade in pipes and tubes for recycling purposes, prefabricated building structures, energy‑efficient machinery and measuring equipment for pollution levels grew between 2016 and 2019. With the exception of energy‑efficient machinery, trade for all of these goods remained higher in 2020 compared to pre‑CETA levels.

Figure 1: Canada-EU Trade in Environmental Goods, in €million
Figure 1: Canada‑EU Trade in Environmental Goods, in €million
      Pipes and tubes for recycling purposesPrefabricated building structuresEnergy-efficient machineryMeasuring equipment for pollution levels
20164132874,3111,046
20195264424,9401,243
20204863984,1081,128

Source: Eurostat, Statistics Canada


1 A detailed report, “An overview of Canada-EU trade performance under CETA” can be found on the Office of Chief Economist website: https://www.international.gc.ca/trade-commerce/economist-economiste/statistics-statistiques/overview_canada_eu-apercu_canada_ue.aspx?lang=eng

2 As defined by the World Trade Organisation’s (WTO) Environmental Goods Agreement (EGA), environmental goods, also called green goods, are products that can help achieve environmental and climate protection goals. WTO members have been involved in ongoing negotiations which aim to eliminate tariffs on several of these products.

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