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Trade & Investment

Canada and the European Union enjoy a vibrant and centuries old economic relationship. In 1976, Canada and the EU signed the Framework Agreement for Commercial and Economic Cooperation. This was the first such agreement for the EU with an industrialized nation. Today the EU, with its 28 Member States, is Canada's second largest trading partner after the United States, its second most important source of Foreign Direct Investment (FDI) and the second most important destination for Canadian Direct Investment Abroad (CDIA). The EU is also Canada's second most important source of new technologies and a key partner in science and technology cooperation.

Highlights of the trade and investment relationship follow:

  • In 2012 Canadian exports amounted to C$38.7 billion, while merchandise imported from the EU stood at C$50.5 billion.
  • Canadian exports to the EU are diverse and include a significant share of value-added products in addition to traditional exports of resource-based products and commodities. Precious stones and metals (C$14.6 billion), machinery and equipment (C$3.1 billion), mineral fuels and oils (C$3.0 billion), mineral ores (C$2.3 billion) and aerospace products (C$2.0 billion) are Canada's top merchandise exports to the EU.
  • In 2012, Canada's top merchandise imports from the EU were: machinery and equipment ($9.5 billion), vehicles ($6.3 billion), pharmaceutical products ($5.5 billion), mineral fuels and oils ($4.7 billion) and electric and electronic machinery ($3.1 billion).
  • Trade in services is significant, with Canada exporting just under C$14.5 billion in services to the EU in 2012, while importing C$16.8 billion from the EU. Canada's services exports to the EU represent 17.4% of its total services exports.
  • The EU is currently Canada’s second largest source of foreign direct investment with an estimated stock valued at $180.9 billion at the end of 2012 or 28.5% of total foreign direct investment stocks in Canada.
  • In 2012, the stock of Canada's direct investment in the EU totalled $183.3 billion. In 2012, Canada was the fourth largest source of foreign direct investment in the EU after the US, Switzerland and Japan.

Although the large EU market offers important commercial opportunities for Canada, it also presents certain challenges. Among these are restrictions by some Member States on mergers and acquisitions, market distortions in agriculture, uneven harmonization of regulations for a single market, and a number of EU-imposed bans and restrictions related to health, environmental and consumer protection concerns.

In an effort to deepen and broaden the Canada-EU commercial relationship, negotiations on a Comprehensive Economic and Trade Agreement (CETA) were launched in May 2009 at the EU-Canada Summit in Prague. For more information on the CETA please see Trade Negotiations and Agreements.

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